First published on Friday, Jan 28, 2022

Last updated on Wednesday, Jul 10, 2024

As an employer, staff come and go all the time. How you deal with employment resigning is crucial, you must ensure you act correctly.

Failure to provide the correct notice period or the correct pay may lead to a claim being made against you. It’s vital the employee gives you notice when resigning.

In this guide, we'll discuss what a resignation is, what to do when you receive a resignation, and your legal obligations.

What Does Resignation Mean?

Resignation is when someone tells their employer they wish to stop working for them. It's also known as ‘handing in your notice’ or ‘quitting your job’.

As an employer, it's important to understand the reasons why someone may choose to submit their resignation.

There are a few reasons why people resign from their jobs. For example:

  • Job unhappiness.
  • Found a new job or career path.
  • A change in individual circumstances, such as caring for a family member.
  • Conflict with a colleague or manager.

How Should an Employee Resign from Their Job?

As an employer, you should make it clear to your employees what the process is for resigning. Make your staff aware it's good practice to hand in their resignation in writing.

Encourage your employees to write to you if they want to leave their job.

A written resignation letter is more formal, creates a record, and helps to assure there's no confusion on when their resignation needs to be handed in.

What Should Be Included in a Resignation Letter?

Employees need to make sure they add all relevant details within a resignation letter. Include this in their employee handbook so you and your employees know what needs to be provided in writing.

For example, the letter should:

  • Clearly state their decision to resign.
  • How much notice they are giving. You must highlight this in your contracts.
  • When their last day at work will be.

Receiving a resignation in writing will ensure you know the last date in which they must be paid. Getting it wrong can cause issues in the future, such as not paying them correctly.

How Should an Employer Respond to a Resignation?

Once a resignation letter has been submitted, set up a meeting. This allows you to discuss their reasons for going - ensuring no hard feelings between both parties.You may need their support in transferring their work over to a colleague when they leave.

During the discussion, explain to the employee that you expect them to work with full dedication up until their last day of work.

Don't argue with them. It's not up to you to decide if their reason for leaving is a good reason or not.

Can an Employee Take Back Their Resignation?

Once a letter has been handed in, it cannot be taken back. The only way it can be retracted is if the employer agrees or the employment contract makes it possible.

When an employee resigns, you should have a conversation with them to see if they may change their mind.

What is the Notice Period for Resignations?

As an employer, you may wonder how much notice there is for staff resignations. You should make it clear in your employment contract the notice period for when someone wants to leave their job, for example you may require one month’s notice to hire a replacement.

But if you don't, the following are the basic legal statutory legal amounts.

  • If the employee has worked for less than a month: no notice.
  • If the employee has worked for one month or more: one week's notice.

So, if you have employees who want to leave, they must check their notice period before handing in their resignation.

It's important to remember that you must pay your staff in the usual way, whilst they're working their notice.

Does an Employee Have to Work Their Notice Period?

Following a member of staff handing in their notice and resigning, you may want to end their employment contract immediately. In order to do this, you must pay them payment in lieu of notice (PILON). This must be included within their employment contract.

Payment in lieu of notice is a financial cost calculated from:

  1. Salary.
  2. Any other contractual benefits, for example accrued holiday pay.

As an employer, you may choose to send a member of staff on garden leave during their notice period. You must include a garden leave clause in their contract to do this. And in this case, leaving the workplace doesn't mean they will be offered only one week's notice.

Read our guide to gardening leave for more detailed advice.

What Should Be Included in an Employee's Final Pay?

When it reaches the last day of their notice period, you should provide your employees final pay requirements outlined in their contract.

Make sure employees are paid:

  • Wages and salary.
  • Any bonuses or overtime payments.
  • Payment for any annual leave or holiday accrued.

An employee's final paid amount is also affected by how much holiday has been taken throughout the year before the resignation. If they have gone over their statutory holiday entitlement, this may be deducted from their final pay. You need a contractual right with or written agreement with the employee in advance.

You may also deduct money from the final pay for loans or training courses.. It's also advised to have written details of every financial benefit provided on their last day or leading weeks.

What Happens if You Force Someone to Resign?

Resignation should never be forced. It is completely against employment law to make employees feel like they were forced to resign.

If this is the case, they may file a constructive dismissal claim against you.

Get Expert Advice on Resignations with BrightHR

Employees will leave your company from time to time, but how you deal with someone resigning is vitally important.

As an employer, you must meet legal contract requirements, like their notice period or official last day or weeks. Failure to act lawfully during this process may lead to a claim being made against you.

BrightHR can help you manage your resignation process with ease. If you need any assistance on how to respond to a resignation, don’t hesitate to get in touch with one of our experts.

Book in a free demo today to see how easy it is. Give us a call on 0800 783 2806

Jenny Marsden

Associate Director of Service

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