Spotlight on... Resignation

An employee resigning seems like a simple enough concept, but there are some common misconceptions that we’re addressing in this spotlight to help employers avoid getting caught out.

Do I need to accept an employee’s resignation?

No. Resignation is a one-way act and is at the sole decision of the employee. The employer doesn’t need to accept the resignation to make it valid, and neither can the employer reject a resignation.

Can I reject an employee’s resignation?

No. Employers can’t force an employee to stay employed, even if you think they are making the wrong decision or acting in breach of their contract. 

You should however consider whether a resignation has been made in the heat of the moment. For example, has an employee been faced with a stressful situation and, as a knee jerk reaction, said they’ve had enough and they’re leaving! If so, and the employee has at least 2 years’ service, you should let the dust settle then ask the employee, usually the next day, to consider whether they still feel the same way. If they do, fine, but if they have reflected and changed their mind, it could be worth leaving it at that otherwise, depending on the circumstances, the employer could end up facing an unfair dismissal claim.

If you think the employee is acting in breach of contract, for example, they are intending to work for a competitor in breach of post termination restrictions, or failing to serve their contractual notice, then you would need to take formal legal action. It might be possible to obtain damages, and/or prevent them from working for a competitor, but the Courts won’t force an individual to remain employed by a particular employer if they don’t want to be.

What should an employer do when an employee resigns?

Acknowledge the resignation, and confirm in writing the arrangements that will apply, for example, what the termination date is, how accrued holiday will be treated, any handover required and obligations that will continue to apply post termination.

What if we don’t want the employee to leave?

If an employee resigns but you want to encourage them to stay then of course there is nothing stopping you from trying. It won’t however stop the clock on the notice period running, so don’t put all your eggs in one basket.

What if the employee alleges that their resignation is constructive dismissal?

An employee with at least 2 years’ service has the right not to be unfairly dismissed, which includes constructive dismissal. Constructive dismissal occurs when the employer commits a fundamental breach of the employment contract, such that the employee can treat the contract as having been brought to an end. In other words, the employee’s continued employment has been made untenable as a result of the employer’s actions.

In such circumstances, the employee can choose whether to leave immediately, or to give notice (although giving notice may later undermine any claim of constructive dismissal they seek to bring).

If an employee does make these allegations in their resignation, the employer should seek advice about how to best protect their position. However, the general mechanics of how to deal with the resignation remain the same.

Can an employee retract their resignation?

Generally no, if an employee changes their mind and wants to retract their resignation, it is up to the employer whether or not to allow them to. There is no obligation on an employer to permit a retraction, but you should always consider whether the resignation was in the heat of the moment. If so, it might be in your interests to permit the retraction (see above).

When can a resignation be deemed?

Never. There are no circumstances in which an employer can, or should, “assume” that an employee has resigned. 

Sometimes it may seem as though the actions of an employee are such that you should be able to treat the relationship as having come to an end – sort of like a constructive dismissal in reverse. However, there is no such thing as a constructive resignation.

Resignation needs to be clear and unequivocal – so an employee making a comment that, for example, they’ve “had enough” or perhaps just going AWOL, isn’t enough to constitute a resignation.

What about when an employee objects to a TUPE transfer?

The Transfer of Undertakings (Protection of Employment) Regulations 2006 contains a provision that enables an affected employee to object to the transfer. If they do so, their employment comes to an end on the transfer date, and some employers refer to this as a resignation.

However, even in these circumstances, an employee objecting to transferring under TUPE doesn’t mean they are resigning. Their employment instead terminates automatically on the transfer date by operation of law. Regulation 4(8) states that where an employee objects, the transfer “shall operate so as to terminate his contract of employment with the transferor but he shall not be treated for any purpose as having been dismissed by the employer”. So, definitely no dismissal, but clearly not a resignation either.