Boris Johnson’s decision on Thursday afternoon to resign as Conservative party leader, but stay on as Prime Minister until a new leader is appointed, has been met with scepticism from much of the public and a growing revolt from a number of Tory MPs. With questions being asked about what types of decisions he should be allowed to make if he stays on as PM, and whether and how he can be forced to leave early, it’s not a great example of how resignation notices work.
As an employer, and particularly in the current climate of the ‘Great resignation’ where many employees are looking for new opportunities, it’s likely you’ll face difficult decisions when staff members resign. You’ll need to consider how long you’ll have to find their replacement, what to do if you don’t want them to work during their notice period, and how to best protect your business’s confidential information.
We’ve set out below a quick guide to how resignation notices work, including how much notice a staff member must give, and what happens if a staff member doesn’t want to work out their notice or you want to put them on garden leave.
How resignation notices work
The length of a staff member’s notice period
In contrast to the recent Cabinet resignations, where multiple ministers resigned with immediate effect, your employees need to give you:
- the amount of notice set out in their employment contract; or
- if they have been continuously employed by you for one month or more, at least one weeks’ notice, even if their contract doesn’t say anything about a notice period. If the employee is senior, specialist or has been with you for a long time, they should give you reasonable notice which may be more than the one week minimum.
Casual workers should also comply with any notice requirements set out in their contracts, and if no notice period is specified they should give you reasonable notice. What is reasonable notice will depend on the circumstances (such as the length of the contract, how formal the arrangements are between you and any standard market practice). For example, reasonable notice for a casual worker who has been regularly working for you over a period of some years will be longer than for one who started a few months ago and only occasionally works a shift.
However, in practice there is a limited amount you can do if your employee or casual worker fails to give the correct amount of notice. We discuss this further below.
How resignation notices should be provided
Even if your worker’s contract does not require it, it’s good practice to ask the staff member for written notice of their resignation, so there’s no confusion about whether they have handed in their notice.
Staff refusing to work their notice
What to do if a staff member refuses to work out their notice period
Unlike the Prime Minister, who appears to be hanging on to his job at all costs, some staff members may refuse to work out their notice period. In this case, your options are limited. If an employee resigns and wants to leave straight away or refuses to work their full notice period, you can’t force them to come to work. It’s possible to sue an employee for costs you incur due to their sudden departure, but this is unlikely to be worthwhile given the time and cost involved in going to court.
If a casual worker doesn’t give you reasonable notice, there is little you can do about it. In reality, casual workers are usually free to reject work you offer them anyway, so it is unlikely to matter whether they give you proper notice or not.
Withholding a staff member’s pay to cover your costs
You don’t have to pay an employee for their notice period if they refuse to work it, but you usually can’t withhold any money they are owed up to the point they leave (eg to cover your costs of paying other staff overtime or bringing in a short term contractor). The only circumstances where you can withhold money that is owed to a staff member to cover your costs are if their employment contract specifically allows you to do this, or they expressly agree in writing.
If you withhold money an employee is owed without their consent, the employee might be able to sue you for the unpaid amounts. In addition, you are unlikely to be able to rely on any restrictions you have included in the employment contract to protect your business, such as non-compete clauses.
Asking staff to leave early
If you don’t want a staff member to work out their notice
You may not want a staff member to come into work after they have resigned. For example, you may be concerned about them having access to sensitive or confidential data which they may use after they have left, you may worry that their presence will affect the morale of remaining staff, or you may be concerned that their standards will slip in the knowledge that they are leaving.
You may simply be able to agree with your staff member that they will leave on a certain date (which may be sooner than the expiry of their notice period), as they may want to start their new job promptly or make use of time off between engagements. It is always worth checking with the staff member what they wish to do. Otherwise, in some circumstances, you can do the following:
- make a payment in lieu of notice (which means an employee is free to take up other employment straight away). Their employment contract will need to specifically allow you to do this, otherwise your employee must agree to it; or
- put them on garden leave. See below for further guidance.
You can’t simply demote a staff member or reduce their pay because they’ve resigned, as this can count as unfair dismissal in some circumstances. It’s also likely to be a breach of their employment contract, which can mean you won’t be able to rely on restrictions in their employment contract to protect your business (such as non-compete clauses).
Putting staff on garden leave
Garden leave is only applicable to employees. It is effectively a paid leave of absence during which the employee continues to be paid and to receive any benefits due under their contract, but they are not required or permitted to attend work, or have access to your records, business systems or customers. Garden leave might be suitable if you think an employee might leak confidential information or try to poach your clients.
Unlike when a payment in lieu of notice is made, an employee who is on garden leave still has an ongoing duty of confidentiality to your business until their garden leave ends. The downside is that you will usually still have to give them full pay and benefits for the duration of the garden leave period which can be expensive, particularly if you have to employ somebody else to actually do their job at the same time.
For further guidance on how resignation notices work and when you’re allowed to place an employee who resigns on garden leave, see our Q&A. You can also find guidance on practical steps to take to minimise the risk of your employee retaining confidential information or business contacts after they’ve left your business.
Our template employment contracts and casual worker contracts help you to meet your legal obligations and to protect your business as far as possible after staff have resigned.
The content in this article is up to date at the date of publishing. The information provided is intended only for information purposes, and is not for the purpose of providing legal advice. Sparqa Legal’s Terms of Use apply.
Marion joined Sparqa Legal as a Senior Legal Editor in 2018. She previously worked as a corporate/commercial lawyer for five years at one of New Zealand’s leading law firms, Kensington Swan (now Dentons Kensington Swan), and as an in-house legal consultant for a UK tech company. Marion regularly writes for Sparqa’s blog, contributing across its commercial, IP and health and safety law content.