How To Deal With A Voluntary Resignation
Employees are entitled to resign from their position by giving their employer notice, this is referred to as a voluntary resignation. Many owners of small businesses that I talk to are caught off guard when an employee resigns and take the resignation personally. I always encourage them to remain professional, neutral and supportive of the employee.
Immediate Steps To Follow After Receiving A Voluntary Resignation
- Request Written Notice
Most employment contracts require employees to give written notice of their resignation. Therefore if your employee tells you verbally that they are resigning, check the wording of the contract first and if it does require the employee to give written notice, ask the employee to do so. The notice period will not begin to run until the employee has provided you with the written notice.
- Discuss The Resignation With The Employee
This will allow you to determine the reason(s) that have prompted the employee to consider resigning and could also reveal underlying issues that have caused dissatisfaction with the role or the business, these are important messages that you can resolve to prevent future resignations for the same reason, and to benefit the long-term health of your business.
Take the time to listen to the employee without interrupting and don’t make assumptions about why the employee is leaving. Remember, the reason for the resignation could be a sensitive issue for the employee so exercise caution and always hold the conversation in private.
Common reasons for resignation include:
- a job offer with a better salary, benefits or prospects for career progression, or more challenging or diverse work;
- a job offer that will enable the employee to achieve better work-life balance;
- to take care of a child or dependent adult;
- to set up a business;
- to take time out of work to study;
- health problems that prevent the employee from being able to carry out their role;
- relocation; and
- bullying or harassment by a colleague or unhappiness in the workplace for some other reason.
You will also want to know about the employee’s current workload, particularly the status of any projects they are working on that will be outstanding when they leave.
Finally you will need to explain what will happen during the employee’s notice period, including the requirement for them to continue working and who they will need to hand over their work to.
If the employee is a valuable member your team you may want to try and retain them as it is usually more beneficial and cost effective to retain a skilled and trained employee than to recruit and train a new one. When this is the case ask if there is anything that would encourage them to reconsider their decision. For example, if the employee is leaving because they have been offered a higher salary you may be able to increase your rate of pay, even if any pay rise offered does not match the figure offered by the new employer, it might encourage the employee to stay.
- Confirm The Resignation
Once you have agreed a leaving date with the individual you need to confirm the notice period. The letter should explain:-
- the date you received the employee’s written notice;
- the length of the employee’s notice period and the date of the employee’s final day at work;
- the contract of employment termination date, which might be different from the employee’s final day at work if they are taking annual leave or are being placed on garden leave;
- the number of days’ annual leave that the employee is entitled to take during the notice period, or, if the employee has taken annual leave in excess of their pro rata entitlement, details of repayment to the employer;
- the arrangements for garden leave, if applicable;
- the arrangements for managing the employee’s work and handing over their work during the notice period;
- the post-termination restrictive covenants in the contract of employment, if applicable;
- the arrangements for the employee to return company property; and
- details of the employee’s final pay; and
- ask the employee to confirm whether they consent to you providing references to prospective employers or third parties.
When Is A Resignation Binding?
A resignation must be clear and unequivocal. It must objectively look like the person intends to resign or has resigned.
Using contract law principles, when an employee’s offer to resign has been accepted by the employer a binding contract is created. The employee can not then decide to not hold up their end of the bargain and withdraw their resignation.
Relevant Tribunal Decisions
Previous decisions have held that an employee can rescind their notice of resignation as long as the employer has not relied upon it to their detriment. In English v. Manulife Financial Corporation, 2018 ONSC 5135 (English) this approach was rejected, instead relying on contract law principles. Once an offer has been accepted, a contract is formed and it is not open to the employee to rescind his or her notice of resignation once it had been accepted.
If an employee resigns confirm that their resignation is accepted IN WRITING! This will protect you if the employee later decides that they want to take it back.
At the bottom of this page you will find a link to download my template letter that you can use to confirm you have received and are accepting an employee’s resignation
Compliance With General Data Protection Regulation
Under the General Data Protection Regulation (GDPR) you are prevented from providing a reference for a current or previous employee unless you have their consent to do so. Therefore when an employee leaves your employment you must now ask them to clarify their wishes with regards to references for prospective employers and third parties. The easiest way to do this is to add it into your resignation acceptance letter and include a signature box with yes and no tick boxes, the employee should also be given the right to withdraw their consent at any time.
Steps To Follow Once The Resignation Is Agreed
- Inform Your Payroll Team/Provider
When you have received and accepted your employees resignation you will need to inform your payroll team/provider so that they can process the employee's final pay and prepare the P45.
- Consider Replacing The Employee
Although it is tempting to fill any vacancy without delay, recruitment is both costly and time consuming so before you do anything take some time to review your existing staffing arrangements and take stock of present or future demands on the business/department. By considering options now, opportunities may be provided for other members of staff, or for different ways of working.
Ask the departing employee if they have any suggestions for improving the role, also ask other departments within the business if they have any suggestions for improving the way the role interacts with them.
- Announce The Employee's Departure To Stakeholders
It is particularly important that the employee's colleagues are informed of their departure when it is not an amicable parting of the ways. For example, if an employee is leaving to set up in competition with the employer or has been poached by a competitor, it would be advisable to inform the employee's colleagues that they should not discuss work-related issues with the employee if they get in touch after they have left.
The team who provide an input to, or benefit from the outputs of their work will also be concerned about the impact that the change will have on their work.
If the employee is in a customer facing role it will also be important to make an external announcement so that customers understand how their work will be managed during and after the change of staff.
Planning how you will communicate with relevant stakeholders can minimise disruption for yourself and pave the way for a smooth transition as the new employee settles in to their role.
Key stakeholders might include immediate team members, second line managers and key customers. The employer usually makes a preliminary announcement of the employee's departure with the employee themselves sending a follow up communication, or there could be a joint communication from the employer and the employee.
Confirmation of Resignation Letter
My Confirmation of Resignation Letter is designed for you to confirm receipt and acceptance of an employee's resignation.
To download the Confirmation of Resignation Letter complete your details below and an email containing the document will find it’s way to your inbox: