When an employee resigns

When an employee wants to resign, you can try to persuade them to change their mind but you can’t refuse to accept their resignation.

If they later withdraw their resignation, generally you don’t have to agree to them continuing to work for you. You should act carefully though if the employee has handed in their notice in controversial circumstances, eg after an argument.

This guide sets out what you should do when a staff member resigns. It also gives advice on how to carry out an exit interview and deal with resignations in difficult situations.

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Finding out why an employee wants to resign

If an employee tells you that they are resigning or intend to resign, the first thing you need to do is find out why.

If the resignation is unexpected, find out why they want to resign. Is there anything you can do to make them change their mind?

Sometimes employees resign because they fall out with someone, eg their line manager. For advice on handling such situations, see the page in this guide on resignations in the heat of the moment.

The resignation may be due to family commitments that mean the employee is unable to continue working the same hours for you. Are there changes you can make to working arrangements to accommodate this? See our guide on flexible working – the law and best practice.

If the employee is resigning to work for one of your competitors, consider whether it would be worth improving their remuneration/benefits package, working environment or looking into their promotion prospects.

Notice periods

It is also important that you refer to the employment contract, written statement or any other agreement you have with the employee to check what period of notice they are required to give.

If there is nothing on notice periods in any written agreement, the statutory notice period will apply, which, for employees with at least one month’s service, is a minimum of one week. For more information, see our guide on how to issue the correct periods of notice.

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Checklist: what to do when an employee resigns

If you accept an employee’s resignation, there are several things you need to do to make their departure as smooth as possible. Make sure you:

• Get written confirmation of the resignation, and the date of resignation. This will help you avoid disputes over the exact date of the resignation and the start of any notice period.
• Decide whether you wish the employee to work out their full notice period. You may find it more appropriate to pay the employee in lieu of all or part of the notice period if your contract provides for it or the employee agrees. However, if you do so, be sure that you have another employee who is able to immediately take on the job.
• Confirm the employee’s notice period, usually part of their contract of employment. If it is not, statutory notice will apply. See our guide on how to issue the correct periods of notice.
• Agree with the employee the terms of an announcement to other staff concerning their departure, if appropriate.
• Organise a handover period. This allows for a smooth handover to existing staff or the employee’s replacement of key tasks and responsibilities.
• Arrange an exit interview – see the page in this guide on conducting exit interviews.
• Retrieve security passes and all other property of your business, eg tools, uniforms, computers and company cars.
• Organise their final payment including all money owing, eg pay in lieu of working a notice period, money for unused holidays, overtime and bonus payments. See our page on calculating final pay in our guide on pay – an overview of obligations.
• Part on good terms. The person leaving may become a client or may be able to refer business to you. Equally, a disgruntled ex-employee can damage the reputation of your business if they leave on poor terms, eg by writing about their experiences as your employee on a social networking website or blog.
• Organise a farewell gift or party, if appropriate.
• Make a point of saying goodbye on the actual day the person leaves and thank them again for all their hard work.
• Be careful about references – see our guide on workers leaving: the basics.

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Conducting exit interviews

When employees leave, it is a good idea to arrange an exit interview. You can then use their response to determine whether there are any underlying issues to be addressed.

However, getting employees to reveal the real reason they’re leaving can be difficult.

For example, if they say that they have been offered more money with another employer, this doesn’t actually explain why they started looking for a new job in the first place. It may in fact be that the employee didn’t get on with their manager or a team colleague, or that they think they were unfairly overlooked for promotion.

If, during the interview, the employee starts making accusations against a colleague, don’t act too hastily. You must ensure there is a fair investigation.

Some useful questions include:

• What have you enjoyed the most/least about working for the business/the role?
• What sorts of problems have you found?
• How well did you understand your role?
• How effective is the communication/consultation?
• How easy was it to get on with your boss/colleagues?
• To what extent do you feel your work was valued?
• To what extent were your skills and talents used effectively?
• To what extent did you feel your role was secure?
• How satisfied were you with money, terms and conditions, facilities, equipment?
• How does your current role compare to your new job?
• When did you begin looking for another job?

The employee’s answers may be influenced by their need for a reference.

Ideally, someone other than the leaver’s manager should try to find out why they’re leaving. They may have difficulty telling their manager about problems with their job or department.

You should also look out for reasons that might lead to employees claiming constructive dismissal or discrimination. These wrongs could be corrected before the employee leaves but beware not to suggest any reasons or say anything that could later be used against you. See our guides on dismissal and how to prevent discrimination and value diversity.

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Resignations in the heat of the moment

Sometimes an employee may say that they are resigning after an argument with their manager or another colleague. In such situations they might not really have meant to resign.

If this is the case, it is dangerous to act as though the contract has ended because the employee could later claim unfair dismissal. See our guide on dismissal.

If an employee seems to have resigned or has walked out after an argument:

• Don’t immediately assume they have resigned.
• Give the employee a ‘cooling off‘ period.
• Take action to find out whether they really meant to resign.
• If you can’t contact them, wait a reasonable time before starting termination procedures.
• Investigate further if you receive additional information relating to the situation, eg that they may have been bullied by a colleague/their manager. See our guide on bullying and harassment.

You should also be careful not to say things in the heat of the moment that could be misinterpreted as a dismissal.

It is a good idea to train managers in handling conflict. This can help to resolve any workplace problems straight away, rather than allowing them to escalate to the point where formal procedures need to be applied. See our guide on managing conflict.

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Resignations where the employee may claim constructive dismissal

An employee may be entitled to resign if you breach a fundamental term of their employment contract. This is known as constructive dismissal.

Breaches of contract that may give rise to unfair constructive dismissal claims might include anything which makes it impossible or intolerable for the employee to continue doing the job.

Examples include:

• cutting – or trying to cut – an employee’s wages or salary or other contractual benefits without their agreement
• transferring an employee to a different job or location in the absence of any stated or implied contractual right to do so
• failing to provide a safe place of work
• breach of your obligation of mutual trust and confidence, a term that is implied in every employment contract

For this reason you should always seek the employee’s prior written agreement when you propose to change their employment contract. For more details, see our guide on how to change an employee’s terms of employment.

If you don’t get the employee’s agreement, they could raise a grievance with you. When dealing with such a grievance, you should follow a fair and reasonable procedure. Ideally your procedure should follow the good practice principles set out in the Acas code of practice on disciplinary and grievance procedures.

Find out about the Acas code of practice on disciplinary and grievance procedures on the Acas website [opens in a new window].

If you unreasonably fail to follow the code and the issue ends up at an employment tribunal, the tribunal could increase any compensation it awards to the employee by up to 25 per cent.

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Resignations connected with a business transfer

Under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), if a business – or a part of a business – is transferred to another business, in most cases the employees of the old employer will automatically transfer to the new employer on their existing terms and conditions.

However, an employee can’t be transferred to a new employer against their will and may object to the transfer before it takes place.

In this case, if they refuse to have their contract transferred to the new employer, the employee is regarded as having resigned with effect from the transfer date. As a result there is generally:

• no dismissal
• no redundancy and therefore no right to statutory redundancy pay
• no obligation for the new employer to take them on

However, if the transfer results in a significant and unfavourable change to an employee’s working conditions – eg their new place of work is hundreds of miles away from their old one – they could resign and claim unfair constructive dismissal.

For more information on business transfers, see our guide on your responsibilities to employees if you buy or sell a business.