Employment law- resignation
What is a resignation?
A resignation can be either verbal or in writing, and is a clear statement by you to your employer that you are going to leave your job. Threatening to leave, or saying that you are looking for another job, isn’t the same as formally resigning.
What notice period do I have to give?
This is usually set out in your contract of employment. An average notice period is between 1-3 months, but for senior employees, if could be 6 or 12 months.
If there is no notice clause, or you do not have a written contract of employment, then the statutory minimum period of notice will apply. The statutory minimum period of notice where you have been employed one month or more is 1 week. If you have been employed less than a month, then you do not need to provide any notice.
A much longer notice period may, however, may be implied if it is reasonable in all the circumstances (i.e. what is normal for a person of that seniority and in the industry).
Where you are resigning based on a constructive dismissal situation, you would not usually be expected to work your notice as this would form part of your claim.
Can I resign “with immediate effect”? Is it a good idea to do so?
If you have less than 1 months’ service, and no notice provisions in your contract of employment, then you can resign with immediate effect. You otherwise need to give 1 week’s statutory notice (or longer if your contract provides for this).
If you resign with immediate effect unwittingly, your employer may accept this, and you would then forgo your notice payments that you were otherwise expecting under your contract. This could represent a valuable loss, so you need to make sure you really intend to resign with immediate effect, rather than making it clear that you are providing the appropriate notice under your contract of employment.
In any event, a resignation with immediate effect could put you in breach of your contract. Your employer may then decide to make a claim against you for losses suffered as a result of your breach. This is a worse case scenario, and you would expect a sensible dialogue to take place during any resignation process. The point is that you do need to be careful.
How do I resign? Will a verbal resignation be enough?
Most employment contracts require employees to give written notice of their resignation. If you chose not to do so in these circumstances, the notice period will not begin to run until you give your employer written notice (unless they are prepared to accept a verbal notification). If you don’t have a contract, or the contract is silent on how to give notice, you may give verbal or written notice.
What do I write in my letter of resignation?
In your letter of resignation you should set out the fact that you are resigning, together with how much notice you are giving and when your last day will be.
If you are resigning following unfair treatment by your employer (such as bullying or allegations of poor performance), and are considering bringing a claim for constructive dismissal, then what you write in your letter of resignation is very important. You should make sure that you set out the full circumstances of why you have resigned so that you have the necessary evidence to formulate a claim at a later date if needed.
We have seen many examples of unhappy departing employees who want to make a claim, but who then send a resignation letter stating how much they have enjoyed working with their employer- and thanking them for the opportunity. This is not a sensible move. Even ending your resignation letter with “kind regards” or “my very best wishes”, is perhaps taking it too far. This could adversely affect your credibility when you are later trying to argue that the relationship had fundamentally broken down.
Do I need to resign to claim constructive dismissal?
Yes, if you are leaving your employer because of a serious breakdown in the relationship, and therefore intend to make a claim for “constructive dismissal“, then you will need to resign first.
What are my rights to still receive salary and benefits during the notice period?
You are entitled to receive your normal pay during your notice period, as set out in your contract of employment. This includes any time that you are off sick (assuming you are entitled to sick pay), or on holiday or maternity, paternity or adoption leave. You should also be paid during your notice period if you are available for work, but your employer does not actually provide the opportunity for you to do so.
What about stock options, restricted stock and deferred compensation?
Your employment contract should set out how long you need to have to stay with your employer to realise your stock options. If you have already exercised the options, these cannot usually be taken away from you. If you have not exercised them, it may be possible to negotiate whether you can still realise any of the value of your options.
If you leave your employer prior to the date your Restricted Stock Units vest or are fully distributed, it can be quite usual that you forfeit your units. You need to check your employer’s plan for details.
You should also check what the position is regarding any deferred bonus, especially in relation to the unvested value, when it will vest and when the deferred payments will be made.
What if I wish to give less notice than what my contract provides for?
The most obvious reason for you to do this is because you have found a new employment opportunity and the start date is before your notice period expires. Practically you can do this, however technically you would be acting in breach of contract, as you would not be giving the correct notice. It is always best to discuss this with your employer and try to reach an agreement.
This could be met by a number of different responses:
- your employer could accept your resignation with an early termination date, which might actually suit them;
- they could insist that you work your full notice period. If you nevertheless refuse to do so, your employer could try to pursue a claim for breach of contract against you. In practice, it is rare for employers to pursue such legal action, and they are only likely to do so if they suffer loss as a result of your early departure. For example, your employer may incur an increase in salary costs to replace you during your notice period or may suffer some other financial loss (especially if you hold a senior position);
- your employer could refuse to accept your immediate resignation, and seek an injunction from the courts to enforce the employment relationship as continuing for the duration of the notice period. Whilst most employers are unlikely to be willing to go to these lengths, this is a useful tactic for them to take, especially in relation to senior employees who have the potential to cause significant disruption. Often, the mere threat of an injunction may be enough to persuade a departing employee from breaching his contract.
Can I be put on garden leave or paid in lieu of notice once I have resigned?
Yes, once you have resigned, your employer could decide to either put you on garden leave or insist that you leave straight away by “paying you in lieu of notice” if your written contract provides for any of these options. If there are no such provisions in your contract, your employer will be in breach if they go down this route, although it doesn’t mean you have necessarily incurred much in the way of losses.
Can I resign before or during a disciplinary process?
Yes, you can. In fact, it is not uncommon to consider resigning when you are facing disciplinary allegations, but this is a very tactical situation and one that ideally you should take legal advice on before you make any decision. The benefits of resigning on the face of it are clear. You would be able to avoid having a gross misconduct dismissal on your record, because you resigned first. However,such a knee jerk reaction could be seen to be evidence of your guilt. At the same time, it could weaken any subsequent employment tribunal claim you wish to make, and could also negatively affect your job reference.
You also need to consider that even if you do resign, your employer could continue the disciplinary process during your notice period, and ultimately still dismiss you for gross misconduct. This would supersede your resignation, with the effect that the balance of your notice period is cut short.
The above having been said, if the allegations against you are totally unfounded or unsubstantiated, you may be able to argue that your employer has made your position untenable whatever the outcome of the disciplinary process. In this scenario, you would be claiming that you have been “constructively dismissed”, and you would be resigning with immediate effect. You would then have a right to make a claim for constructive dismissal (if you wished).
If you decided to ride out the disciplinary process which resulted in a gross misconduct, this could seriously hamper your ability to find new employment. This is why it is far better to see if a negotiated settlement can be found with your employer, which allows you to leave with your reputation and integrity intact- and which provides you with a job reference to take to your new employers. This is why a negotiated exit with your employer is by far the best route to take.
Can I withdraw my resignation?
Generally no, as once you have given notice, it can only be withdrawn if your employer agrees (and there is no obligation for an employer to agree to the withdrawal).
If, however, you resigned in the heat of the moment, for example in anger following an altercation or under significant pressure, a retraction may be possible if you withdraw the resignation very quickly. Indeed, employers are expected to give an employee a reasonable period of time to calm down and reconsider whether he or she really does want to go ahead with the resignation. The better chances of success in winning the argument is where you communicate the retraction to your employer within a very short space of time- certainly no longer than a few days and in most cases, either the same or following day.
If your employer fails to do this, it could result in a finding of unfair dismissal. The rationale behind this is that if you were entitled to withdraw your resignation, then you are still technically employed, and your employer’s unreasonable refusal to accept this amounts to a “dismissal”. A tribunal would look at the facts and ask what a reasonable employer would have understood the actual words to mean. A more prudent employer would seek a clarification of your intentions where the words used were not clear, or made in haste.
Can my employer refuse to accept my resignation?
Your employer cannot refuse to accept a resignation which is clearly and validly given. You should though, check your contract of employment to see if provides for your resignation to be submitted in a certain way, for example, in writing, and if so you should follow this, otherwise it may not be valid.
Can I take holiday during my notice period once I have resigned?
Yes, you can if you have accrued but unused holiday, however your employer is entitled to refuse the holiday request, which might be necessary if, for example, you are required to complete a project before your departure. If you booked annual leave prior to resigning, and the holiday falls during the notice period, your employer should permit you to take the holiday unless there are compelling reasons for you not to do so.
Can my employer insist that I take my holiday during my notice period?
Your employer may insist that you take your unused annual leave during your notice period, if your contract of employment allows this. Even if your contract does not include such a clause, your employer may still ask you to take accrued holiday if you have not already requested holiday yourself. In these circumstances, you would need to be given sufficient notice by your employer. The notice should be equal to twice the length of the holiday period, unless there is a contractual provision to the contrary. For example, if you have 5 days’ accrued holiday remaining, you should be given a minimum of 10 days’ notice.
Can I be off sick during my notice period?
Yes, you can be off sick and you will be entitled to receive your normal rate of pay, contractual sick pay or SSP, unless you have exhausted this already prior to your notice period commencing.
Will I receive my full notice pay if I resign during a period of being off work due to sickness?
If you hand your notice in during a period of sickness where you are already on reduced pay, whether you should receive your full pay for your notice period will depend on the length of notice.
The basic position is you would not be entitled to full pay for your notice period, only the balance of any contractual sick pay or Statutory Sick Pay for the duration of your notice period if you remain on sick leave.
If however, your contractual notice period is less than one week more than your statutory notice entitlement, your employer should pay you your statutory entitlement to notice on termination. Your statutory entitlement to notice in a resignation scenario is 1 week (unlike in a dismissal scenario when this is 1 week for every year worked). For example, if your contractual entitlement to notice is 1 month, and you have been with the company for 4 complete years, your contractual entitlement to notice (1 month) is less than 1 week more than your statutory entitlement to notice (4 weeks) in the event you were to be dismissed. If you were to be dismissed, you would then be entitled to 4 weeks’ pay, although if you were to resign, you would be entitled to 1 week’s pay.
Will I lose my right to a redundancy payment if I resign before the process has completed or before selection has been made?
Yes. If you have not yet been made redundant and you resign beforehand, then you would not be entitled to receive your redundancy payment unless your employer otherwise agrees.
What other important matters do I need to consider once I have decided to hand my notice in?
- Restrictive covenants– many contracts of employment will contain post-termination restrictions which may hamper where you can work, including what clients you can or cannot take with you. Ideally, you would check your contract of employment to see what it says in this regard.
- Bonuses– once you have resigned, make sure you understand the bonus provisions in your contract of employment, as many will state that you are not entitled to a bonus unless you are still employed at the “bonus payment date”.
- Copying your employer’s files and data to your personal email– we have seen this so many times, and it can lead to an unsavoury end to your employment. You may think that it is harmless to transfer files that you are working on during your notice period (such as client lists), but employers don’t like it. They may well be monitoring your activity and there is often a degree of suspicion towards departing employees. We have seen many people being disciplined during their notice period for breaching email and/or confidentiality provisions in their contract of employment at this time, which had led to gross misconduct proceedings.
- Make sure you have removed or transferred any personal data from your work PC or laptop. You may otherwise find that you have lost the opportunity to do so, especially if you have been asked to leave the premises after you have resigned, or are frozen out of your work systems.
It is never a good idea to resign where you believe you have a claim against your employer, without first taking legal advice. This is a very tactical situation, and could negatively impact on settlement discussions and any future legal proceedings.