Resignation from work – a quick guide
If you’ve submitted your notice of resignation to your employer (or you are thinking about resigning from your job) then there are certain things that you may wish to consider – our specialist employment lawyers have therefore prepared a brief guide on some questions you may have in these circumstances
- What is resignation?
- What do I have to do to resign?
- How long will my notice period be?
- Why might you want to resign from your job?
- Is there any other way to solve your problem other than resignation?
- Do I still receive my salary and benefits during my notice period?
- Can my employer terminate my employment after I’ve given my notice?
- Can my employer put me on garden leave during my notice period?
- How do I write my letter of resignation?
- Can I withdraw my notice of resignation once submitted?
- What happens to my stock options, restricted stock, and deferred compensation if I resign from my employment?
- Can I bring a claim for constructive dismissal after I’ve resigned from my employment?
- What happens if I want to give less notice than I have to under my contract of employment?
- What happens if I want to resign from my employment without serving any notice period?
- Can I take holiday during my notice period once I’ve resigned?
- Can I go on sickness absence during my period of notice?
- Will I receive my full notice pay if I resign from my employment during a period of sickness?
- Will I lose my right to a redundancy payment if I resign from my employment before the redundancy process has been completed?
- What do I do if my employer says that I owe them money after I’ve resigned?
- What other things might I need to consider once I’ve decided to resign from my employment?
- Some other things to think about before you decide to resign
You resign from your employment when you terminate your employment – you will normally be supposed to give a certain period of notice to your employer (how long will be determined by statute or your contract of employment) but there are certain circumstances in which you may wish to resign from your employment without giving notice.
In order to resign from your employment you should normally provide written notice to your employer of your wish to resign (i.e. send a letter to your employer stating that you are leaving your job and the date on which your employment will end), as most contracts of employment require employees to give written notice of their resignation. If you don’t have a contract of employment, or the contract doesn’t contain a term stating that you have to give written notice of termination, then you have the choice of either giving notice of resignation verbally or in writing.
The minimum period of notice of resignation that you have to give to your employer is normally one week (if you have been employed by your employer for one month or more). You will, however, need to check your contract of employment in order to see whether there’s a clause stating what period of notice you need to give – if there is such a clause then you should normally give the period of notice that is specified in the contract.
There are many circumstances in which you may wish to resign from your job – you may have received a new job offer, you could have been demoted, you may be being discriminated against, harassed or bullied at work, or you could be unhappy for another reason (among others). If you’ve been treated badly in the workplace there may be certain circumstances in which you can bring an Employment Tribunal claim for constructive dismissal.
If you wish to receive legal advice on a potential constructive dismissal claim then call our specialist employment solicitors
Resigning from your job should normally be a ‘last resort’ if you’re unhappy at work – before you decide you have no other option than to resign from your job you should normally see if you can resolve your problems through one or more of the following means:
- Talking to your line manager to see if you can resolve your problem informally (or, if your line manager is the source of the problem, an appropriate third party in management);
- Submitting a formal complaint (also known as a ‘grievance’) to your employer detailing why you’re unhappy and what can be done to resolve your situation;
- Engaging in workplace mediation to see whether an independent third party mediator can make recommendations to solve your problem at work;
- You can, in certain circumstances (for example, if you’ve been discriminated against, harassed or victimised) submit an Employment Tribunal claim – it’s recommended that you obtain legal advice before taking such steps
It is also normally a good idea, prior to resignation, to see whether your employer is willing to agree an exit package (through a settlement agreement).
If you work your notice period out (or are placed on garden leave) then you should normally be entitled to receive to the date of termination any salary and benefits that you would normally have received during the course of your employment.
If you are being paid in lieu of notice (also known as “PILON”) then you should check your contract of employment to see what you’re entitled to as part of the PILON – the contract may say that you’re only entitled to salary for your PILON, it may say that you’re entitled to salary as well as all other benefits for your period of notice, or it may be silent as to what you’re entitled to (if it’s silent then the default position is normally that you’re entitled to both salary and benefits for the period of notice).
If your employer fails to pay you sums that you’re entitled to in respect of your notice period then you may have a claim for unlawful deduction from wages and/or a claim for breach of contract.[SPEAK TO ONE OF OUR SOLICITORS]
There are generally three circumstances in which your employer could terminate your employment after you’ve given notice of termination:
- Counter-notice by your employer: there is no statutory provision for the employer to give counter–notice following receipt of notice from the employee. However, there are certain circumstances in which they may do so;
- Termination by your employer and paying you in lieu of notice: if your contract allows it then your employer may terminate your employment immediately and pay you a sum of money in lieu of the sums you are entitled to during your notice period;
- Summary termination by your employer: there are circumstances in which your employer could terminate your employment without notice – for example, if, during your period of notice, your employer finds you guilty of gross misconduct then it could elect to terminate your employment summarily. You may have a claim for unfair dismissal in such circumstances
‘Garden leave’ is when your employer asks you to, essentially, go home and not do any work during your period of garden leave.
You should check your contract of employment in order to see whether your employer is entitled to place you on garden leave. If your employer has an express contractual right to place you on garden leave for your period of notice then it is at your employer’s discretion whether they put you on garden leave or not; if your employer does not have an express contractual right to place you on garden leave then whether your employer can place you on garden leave or not depends upon whether you have an implied contractual right to be given work to do.
If your employer places you on garden leave without an express contractual right to do so and you object to this, it is probably a good idea to complain to your employer in writing about this and, further, to seek legal advice from a specialist employment solicitor.
Writing your letter of resignation should normally be reasonably simple – you should state that you’re intending to resign from your employment and when your last day will be. You may also, in certain circumstances, wish to state why you’re leaving your job – this can be useful if, for example, if you’re thinking about bringing an Employment Tribunal claim against your employer after you leave your job (for example, this could be useful if you’re looking to bring a claim for constructive dismissal or discrimination). If you’re not looking to bring a claim against your employer after you leave your employment then it’s normally a good idea to be as polite as reasonably possible in your letter of resignation – you don’t want to ‘burn bridges’ with your employer if you can help it (as you may go back and work for the employer again at a later date or you may prejudice your chances of getting a reference).
For more advice on writing your letter of resignation, see our article on how to write a letter of resignation and review the advice on the following websites:
Once a valid notice of resignation has been submitted you can’t generally withdraw your notice of resignation unless you have your employer’s consent to withdraw it. If you have submitted your notice of resignation and you wish to withdraw it then you should contact the person to see if your employer is willing to allow you to withdraw your notice of resignation.
What happens to my stock options, restricted stock, and deferred compensation if I resign from my employment?
You should check your contract of employment, as well as other contractual policies/plans (such as, for example, the bonus plan, stock option plan, restricted stock plan, and deferred compensation plan) in order to determine what your contractual rights are to stock options, restricted stock, deferred compensation, and bonus upon the termination of your employment.
Your contract of employment (or the stock option plan) should set out how long you need to have to be in continuous employment with your employer in order to be awarded your stock options. If the stock options have ‘vested’ then your right to the options cannot usually be rescinded by your employer. If the options have not vested then you may be able to negotiate with your employer whether you’ll be able to ‘accelerate’ the vesting of the options – this will be a commercial negotiation between you and your employer.
A restricted stock is an employment-related stock which is subject to a restriction that reduces its market value.
If you leave your employer prior to the date your restricted stock units vest or are fully distributed then the normal circumstance is that you would forfeit your right to receive the units. However, you should check your employer’s restricted stock plan for more details of your entitlements.
You should also check what the terms of your employer’s deferred bonus/compensation plan in order to determine what you’re entitled to upon termination of your employment, as well as any letters confirming your entitlements for particular financial years – the plan will state what the legal position is in relation to your deferred bonus/compensation upon termination, when the unvested portion of the bonus/compensation will normally vest, and when any deferred payment will be made to you.
You should check your contract of employment and/or your employer’s bonus plan in order to determine what your entitlement to a bonus is if you leave your employment part-way through the ‘bonus year’.
In order to bring a claim for constructive dismissal against your (previous) employer then you may do so if you were an ’employee’ of your employer (rather than a ‘worker’ or self-employed) and you had at least two years’ continuous employment with the business. In order to succeed in a claim for constructive dismissal you must generally succeed in showing to an Employment Tribunal that:
- Your employer was in “repudiatory breach” of the employment contract;
- You resigned in response to that breach; and
- You did not delay too long before resigning in response to your employer’s breach.
If you continue working for any length of time without leaving (after the breach has occurred) then you may lose your right to treat the contract as breached, and you may be regarded as having chosen to “affirm” the contract.
It is important to note that it may not be just one incident that amounts to “repudiatory” conduct by your employer; sometimes it is a series of incidents or pattern of behaviour which, taken as a whole, amounts to such conduct.
If you wish to serve less notice than you have to under your contract of employment then you should generally obtain your employer’s consent to this – you can’t ‘unilaterally’ vary the length of notice that you are contractually obliged to serve (i.e. change it yourself) and, further, refusing to serve the correct period of notice could sour relations between yourself and your employer (this could potentially cause problems for you in the nature of the reference that your employer later chooses to give). If you wish to leave your employment without giving the correct amount of notice then it is always best to discuss this with your employer and try to reach an agreement.
The request to ‘shorten’ your notice period could be met with a number of potential responses
- Your employer could agree with your request and give you an early termination date – in some circumstances this outcome could actually suit them;
- Your employer could, alternatively, reject your request and insist that you work your full notice period. If your employer insists that you work your full notice period and you refuse to do so then your employer could potentially issue a claim for breach of contract against you. In practice such a circumstances is rare and employers do not generally pursue legal action unless you cause them a loss of profits as a result of your conduct. 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 reject your request and insist that make an application to the courts for an injunction against you (to force you to stay in your employment for the duration of your period of notice). Again, in practice such an action by an employer is rare, although your employer may seek to threaten you with this action as a tactic in order to prevent disruption to the business. Often, even the threat of an injunction may be enough to persuade a departing employee from breaching his contract
There are certain circumstances in which you may wish to resign from your employment without serving any period of notice – these include (but are not limited to):
- If you have been treated poorly by your employer during the course of your employment and wish to bring a claim for constructive dismissal – resigning without notice can be an important tactical step in such a circumstance;
- If you obtain your employer’s consent for you to leave early without serving any notice
The short answer to this question is ‘yes’: if you have accrued but not taken holiday then you are entitled to take that accrued but untaken holiday during your notice period. However, in certain circumstances your employer is within their rights to refuse to allow you to take a period of holiday during your notice – for example, if you are required to undertake a full handover or complete a certain piece of work before the termination of your employment then your employer could refuse a request for annual leave. If you’ve already booked leave that would have fallen during your notice period then your employer should allow you to take this period of annual leave unless there are strong (and reasonable) reasons for forcing you not to take it.
If you have given notice of resignation then your employer has the right to insist that you take any accrued but untaken holiday during your notice period, but they can generally only do this if there is a clause in your contract of employment which gives them the right to do so. Even if there is not such a clause in your contract of employment then your employer can still ask you to take any accrued but untaken annual leave during your notice period (and such a request may be incorporated into the terms of a settlement agreement with your employer).
Yes, you can go on sickness absence during your period of notice.[READ MORE ABOUT SICKNESS AT WORK]
Will I lose my right to a redundancy payment if I resign from my employment before the redundancy process has been completed?
The answer to this question is generally ‘yes’ – if you resign from your employment prior to the redundancy process concluding then you will generally not be entitled to any redundancy payment (whether statutory or enhanced). You could, however, reach an agreement with your employer that you receive your redundancy payments even if you resign (it’s important to note, however, that your employer’s consent is required in these circumstances).
If you’ve left your job and your employer makes deductions from your wages then you may have a claim against your employer for unlawful deduction from wages. If you want to learn more about the law in this area then please read our quick guide on the law relating to unlawful deduction from wages.
If you’ve decided to resign from your employment then it’s probably a good idea to think about the following:
- Negotiating an exit package with your employer: you may wish to approach your employer to see whether they’re willing to agree an exit package with you – you could potentially negotiate the payment of a sum of money on an ex-gratia, tax-free basis
- Bonus: you may wish to check your contract of employment to see what your entitlement to a bonus is upon termination
- Reference: you will probably want to approach your employer to see whether you can agree what form of reference you’ll receive after you leave
- Announcement: you can agree with your employer what form of announcement will be made externally and internally upon the termination of your employment