HR GUIDE | What to do when an employee walks out

What do employers do if an employee gives you their letter of resignation and doesn’t come into work the next day?

From an employer’s perspective, there are many considerations, risks and costs to consider when deciding the best course of action.  

Notice

If an employee resigns, they need to provide notice to you.  For employees, the statutory minimum notice period for any employee who has worked for at least one month is one week. However, in most cases, the employee’s contract of employment will set out a longer notice period.

Longer notice periods will make particular sense for those employees performing specialised or senior roles. This is becasue a longer notice period will give you more time to find a replacement or train someone internally to do the job. 

Therefore, if an employee just walks out and gives no notice at all despite the fact that their contract clearly states that they must provide, for example, one month, they are in breach of contract. As such, you would not be required to pay for any part of their notice period they did not work. These actions will also have an impact on the business in trying to cover that role at short notice.

The problem is that in many cases, especially in relation to junior employees, it’s not worth pursuing them for breach of contract. It takes time and expense and the actual losses suffered by the organisation are small. You should seek advice from your EW Employment Law Adviser to see whether it is in your organisation’s best interests to pursue this or not.  

As an example, you could seek compensation if, for example, you had to hire someone else (who earned more than the employee due to the short notice) or use agency workers as they did not work their notice period. But again, you do need to think about whether the expense is worth it.

Working for competitors

Having clear and robust post-termination covenants in employee Contracts of Employment should protect you if an employee resigns and goes to work for a competitor. You can remind them of their contractual obligations and what can happen if they don’t adhere to them.

You can apply for an injunction to prevent the employee working for a competitor during their notice period or in breach of their restrictions.

Deducting from remuneration

You can look at the employee’s Contract of Employment and see whether you can make any deductions to the employee’s remuneration.

It may be in the contract, you have reserved the right to deduct from the employee’s remuneration any monies owed to the employer including any loss or damage suffered by the employer as a result of the employee ending the employment without giving or working the required period of notice.

If you do not have such a clause and go ahead and make a deduction, you leave yourself exposed to claims for unlawful deductions of wages.

Beware of constructive dismissal

You need to think whether there is any risk of constructive dismissal.  Constructive dismissal is when an employee is forced to resign because an employer has done something that seriously breaches their Contract of Employment.  In these cases, the employee is entitled to resign without providing notice.

Employees need to be able to demonstrate the following to make a claim for constructive dismissal:

  1. There must be a fundamental breach of contract by the employer. This means it must be serious enough that it justifies why the employee has been left with no choice but to leave.
  2. The resignation must be as a result of a breach that has already occurred (an actual breach). Or a breach the employer intends to do at a later date (an anticipatory breach).
  3. The employee should leave their job in response to the breach. If they stay too long after the breach, it may be considered that the employee has accepted the conduct and ‘affirmed’ the contract.

In general, employees will need to have worked for you for at least two years to make a claim.

Recover company property

Upon termination of employment, employees will need to give back their company property.

You should have a clause in the employee’s Contract of Employment which ensures that they return:

  • Documents
  • Records
  • Correspondence
  • Information
  • Company credit cards
  • Keys

And delete any information related to the business. It is also useful to ask them to provide a signed statement that they have complied with this obligation.

References

There is no general duty imposed on employers to provide a reference to a former or current employee. There are some exceptions, for example, in some highly regulated sectors where a reference will be required for a person to conduct certain functions. 

If you do provide a reference, you should take reasonable care when writing it. You need to ensure that the information you supply is fair, truthful and accurate.

Final thoughts

If an employee has left without providing notice, you need to think carefully about your best options, including whether to negotiate with your employee to find the best solution. Get in touch with your EW Employment Law Adviser who can guide you and advise you on how best to handle this type of challenge.

Director of Legal Services

James Tamm

Whether you’re facing an immediate challenge or just want the reassurance of an expert second opinion, we’re here to offer clear, commercial advice so that you can focus on what you do best.

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We combine the service quality of a law firm with the certainty of fixed-fee services to provide expert, solutions-focused Employment LawHR and Health & Safety support tailored to employers.

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We combine the service quality of a law firm with the certainty of fixed-fee services to provide expert, solutions-focused Employment LawHR and Health & Safety support tailored to employers.

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