What do you need to do when you receive a resignation.

An employee resigns by giving you notice. This will usually be in writing but may sometimes be done verbally. If the employee resigns verbally, you should request that they put their resignation in writing. If written notice is not provided, you should write to them and record their verbal resignation.

Your employee must provide you with notice in line with the notice period in their employment agreements. Be aware that if your employment agreements include a longer notice period and the employee resigns and leaves without agreed notice your financial remedies can be difficult and expensive to enforce. Also, if the relationship has deteriorated to the extent that you would prefer not to have the employee remain in the practice during their notice period after resignation you are required to pay the full notice period in lieu. You may only take this approach if it is stipulated in their contract.

In some cases, employees give you much longer periods of notice. For instance, they advise you that they will be leaving in six months’ time. This does not enable you to impose the notice period in the employment agreement and require the employee to go in say a month’s time. In essence, the employee is simply giving you advanced warning of their resignation. This is a further reason to have a defined notice period in your employment agreements. It is important not to confuse an employee giving you advance notice of an intention to resign with their advice constituting their ‘resignation’.

Once an employee has given notice, they cannot withdraw it. However, your duty of good faith may, in certain circumstances, prevent you enforcing a resignation, (e.g. the employee tells you that they are leaving because their partner has got a job in another centre, but comes back the next day and says the job has fallen through). In those circumstances, it is unlikely you would try to enforce the resignation. Your duty of good faith probably prevents you from doing so unless you had, as an example, hired someone else in the meantime.

When an employee resigns, you need to decide whether you want:

• the employee to work out their notice period;

(e.g. to get everything in order/hand it over to another employee before they leave)

• to pay the employee salary in lieu of notice;

(i.e. The employee leaves immediately and is paid one lump sum for their notice period. It is preferable that your employment agreement provides that you can pay in lieu of notice).

Generally, if an employee requests a shorter notice period and this is agreed by the employer, then the employment ends on the date agreed. Payment of salary in lieu of notice is provided only where the employer decides to require that they finish at an earlier date than the documented or previously agreed notice period.

If an employee does not provide notice as required in their employment agreement, an employer can take steps under the Employment Relations Act to require that they work out their notice. However, enforcing someone to work and be productive when they do not want to be there can be a difficult challenge.

For further information see calculating final pay .

Restraints of trade and confidentiality

If the employment agreement of the person resigning contains a restraint of trade clause, they should be reminded of the requirements of this clause, and the restrictions that it imposes on them. This can be done in a conversation and should also be acknowledged in writing in your letter accepting the resignation. You can ask the employee where they are intending to work, to make sure you can protect your interests.

Confidentiality provisions regarding the disclosure of confidential practice information continue to apply after the employment relationship has ended and you may wish to remind the exiting employee of this, especially if you have some concerns around their departure.

Unexpected resignations - or when there are unresolved workplace issues

Quickly accepting resignations, received in the heat of the moment comes with risk, particularly if seen to be a solution to end unresolved workplace issues. Claims can result that employer obligations have not been met, possibly alleging lack of good faith or that constructive dismissal has occurred.

If you receive such a resignation, do not accept it immediately. Ask the employee to seek advice, encourage them to take 24 hours to reconsider and get back to you in writing.

However, there will be occasions where this type of resignation occurs, is in place for a few days or more and where you will be well within your rights to say to your employee that their resignation stands. If you find yourself in this situation it would be wise to obtain some guidance from a third party/lawyer.

Other issues

If there has been an overpayment of leave or wages, you can’t automatically deduct these amounts from the employee’s final pay, you need to consult with the employee before taking any action. If there is owing due to other reasons you will also need to consult and agree to a repayment process.

Sometimes an employee may present a medical certificate that covers their notice period, or uses annual leave.  This doesn’t mean that their employment ends earlier, they are still employed while they are taking this leave.

Read our content on resignations and final pay.