“I quit!” What to do when a key employee resigns

2018 saw lots of high profile resignations. Theresa May’s government saw 19 of these, with Dominic Raab, Boris Johnson and David Davis topping the list.

It can be a huge shock if one of your key employees unexpectedly resigns. There will no doubt be two huge costs to consider;

  • Firstly, the monetary cost of recruiting an equally talented replacement; and
  • Secondly, the time you will lose during this process and whilst carrying out necessary exit interviews.

Before going into panic mode, it is always worth spending time to fully understand the reasons why one of your best employees wants to move onto new horizons. For example, if there is an issue with unclear management expectations or perhaps the dissatisfaction simply stems from pay, then these may all be matters you can look to resolve.

Sometimes it isn’t possible to persuade your best employees to stay, particularly if their reason for leaving is connected to a personal or family matter.

Following a clear process when handling a resignation is key to preventing any arguments further down the line and ensuring you part ways on good terms.

Here are some points you need to consider when dealing with an employee resignation.

Acknowledge the Resignation

It may come as a shock. It may not be the right time for someone to leave. It may be your best employee. But it’s essential to maintain your composure and deal with the situation in hand.

You should ask the employee to confirm their resignation in writing as this can avoid any arguments at a later date over when exactly they resigned and when the notice period started.

Resignations in the heat of the moment

In heat of the moment, one of your employees may snap and say “I’ve had enough and want to quit!” However, once they have calmed down and removed themselves from the situation, they may change their mind.

It might be reasonable to give the employee a reasonable amount of time to cool down and think about whether they actually do want to resign. If the resignation was in the heat of the moment and you refuse to allow the person to return once they have calmed down, you may face an unfair dismissal claim.  An Employment Tribunal may decide that there was no valid resignation and by not allowing the resignation to be withdrawn, your actions constitute a dismissal. 

This is another reason why you should always ask for the employee to confirm their resignation in writing.

Notice Period

The employee must give you the required amount of notice, which should be stated in the Contract of Employment. If there is no provision in the contract, it should at least respect the statutory minimum of a week.

Depending on the terms of the contract, employers have certain rights:

  • You may ask the employee to work their notice period.
  • You may place the employee on garden leave. This means you may ask them not to come into the office during their notice period in order to keep the employee away from the business, sensitive information and from clients or suppliers.
  • You can ask them to leave immediately, but you will need to make them a payment in lieu.

Whatever you decide, you will need to confirm to the employee when their last day is and how the notice period will be handled.

Post-Termination Restrictions

You will need to check the employee’s contract to see whether there are post-termination restrictions. For example, the employee’s contract may have:

  • non-poaching covenant, which will stop an employee from poaching former colleagues to their new place of work.
  • a non-solicitation covenant, which means they cannot take your customers.
  • non-compete covenant, whereby the employee cannot go and work for a competitor.

You should remind the employee of these covenants. If they breach these covenants, you can take legal action.

Exit Interview

An exit interview is a good opportunity to understand why someone is leaving. It may be the case they feel like they need a new challenge, that they have to leave for family or personal reasons, they have been given a bigger and better role at one of your competitors or there is a workplace issue that is making them want to leave. 

If it is a workplace issue, it is useful to chat through it and see if it can be resolved before they leave.

Cover off all essentials

You will also need to discuss how to handover any projects; how, and if, you are going to let colleagues and clients know about their departure; the procedures for returning any equipment and security passes and their final pay.

You may also need to think about getting a replacement, whether that is someone internally or externally.

recruitment questions and employment law

Part Ways on Good Terms

Parting on bad terms can be damaging.

Nowadays, with some people giving a running online commentary about their lives, you could find yourself at the end of disparaging and offensive comments on the internet. 

As these are in the public domain and easily found by clients, colleagues and third parties, these types of comments can cause reputational damage that can ultimately hamper your bottom line.

You also never know if and when you will need to cross paths with the employee again in the future.

They may become your client. They may be part of any joint projects you do.

So, it is best not to part on bad terms and have to face the consequences in the future.

Your Ellis Whittam Employment Adviser is just a phone call away if you are facing a resignation and need some assistance.