As an employer, there may be a situation where one of your staff members resigns. You can minimise the impact of resignation by preparing your business and having firm policies in place.
In this comprehensive guide for employers, we explain the resignation process, things for employers to remember, and the key components of a resignation letter.
Things for employers to remember
An employee can resign at any time, normally beginning the resignation process by declaring their intention to stop work with a resignation letter.
Once an employer has received notice from an employee that they wish to resign, they should:
- Confirm the notice period in the employment agreement,
- Formally accept the resignation,
- Use the employment agreement and any legal guidance to calculate the final pay of the employee,
- Ensure any company property is returned by the employee,
It is important to remember that there may be provisions in the employment agreement or additional policies which set out the resignation process for employees. For example, many employment agreements will make it clear that for is to be in writing and that there is a specific period of notice required. Whether it is outlined or not, a written resignation is the best way to avoid any misunderstandings.
Resignation process
- An employee offers their resignation verbally.
- If they resign verbally first, they are recommended to confirm their intentions in a resignation letter.
- The employee must give you the necessary notice period outlined. Check the notice period in the employment agreement.
- Formally accept their resignation verbally and confirm this with a letter.
- Prepare for a handover.
- Assign their ongoing tasks to another employee.
- Conduct an exit interview.
Notice period
The notice period is a prescribed time where the employer can organise a handover, cover or prepare for any adjustments needed in the transition phase before the employee leaves the business. It is best practice to outline the required notice period in the employment agreement. The length of the notice period will depend on the industry, the role and level of seniority.
If an employee resigns, the employer can take steps to clarify the employee’s intention regarding the notice period if they have not indicated their final day or the employee does not provide the correct amount of notice as outlined in their employment agreement. If the incorrect amount of notice has been given, then in some circumstances the employer may be able to deduct the unworked notice period from the employee's final pay if a loss has been suffered as a result of finding cover.
Both parties can agree that the employee does not have to work out their full notice period. The employee will be paid wages up to the end of the newly agreed notice period.
In some cases, the employer and employee may agree to:
- Waive all or some of their notice period. This might happen if the employee is leaving for a new job and needs to start their new employment soon. In this situation, the employee will not be paid for the portion of notice period they do not work.
- Put the employee on garden leave if this is outlined in the employment agreement.
It is best practice to document any agreed changes to the notice period and the employee’s final day of work.
Resignation letter template
Most employees may resign verbally first or send an official letter. Whatever the sequence, it is best practice to have a written resignation letter stating their role and last day of work to avoid any misunderstandings.
For example:
Please accept this letter as formal notification of my resignation from (company name). My last day of employment will be (effective date). Before my last day I will make sure that all my current projects are as complete as possible, and I am happy to assist my other team members to ensure a smooth transition of my responsibilities.
Unintended resignation and cooling-off period
In some circumstances, such as a heated discussion or argument, an employee can tell their manager that they quit, which many employers can easily interpret as a formal resignation. In these situations, it is important to be clear about whether the employee has resigned.
Depending on the issue, employers are usually advised to allow at least 24 hours for the employee to cool off before attempting to confirm in a professional manner whether the verbal resignation was genuine or not.
With the employee in a clearer frame of mind, they can withdraw their resignation or simply reiterate their formal notice of resignation. If your employee does restate their intention to resign, this is a perfect opportunity to request a resignation letter to confirm the matter in writing.
Incorrectly assuming an employee has resigned without confirming this via a formal resignation letter can be an expensive mistake, potentially leading to a claim of constructive dismissal.
Resignation withdrawal
There are some cases of employees submitting resignation letters and later withdrawing their requests. Employers must decide whether to allow the resignation to be withdrawn and let the employee continue working as normal. Depending on the timing and reason, an employer can refuse the withdrawal and proceed with the resignation.
Regardless of which choice is made by an employer, the outcome should be communicated in writing to ensure complete clarity.
Exit interview
As well as collecting any company property from the employee, many employers will decide to conduct an exit interview. This helps the employer collect valuable information about how the company can be improved so they can increase staff retention.
Consider who would be the best person to conduct the exit interview as the employee may be reluctant to raise issues related to their team and seniors. You may collect more honest answers if the employee’s anonymity is protected.
The exit interview can ask questions related to the following:
- Reason for resignation.
- Relationship with supervisors and workmates.
- Satisfaction with pay, training, and development opportunities.
- Working environment and culture.
- Workplace policies and processes.
- Suggested improvements.
Remember – there is no point in doing exit interviews unless you follow up on the information you collect. Make sure you have processes in place to review exit interviews and action any workable changes.
Optimise the employee lifecycle with Peninsula
The end of an employee’s employment at the business needs to be handled with care. The offboarding process will leave departing employees with long-lasting final impression. With Peninsula’s help, you can handle resignations confidently and start your offboarding process smoothly. We are with you at every step of your journey, and we know just what you need to take your business to the next level.