Employee Resignation

When an employee resigns, there are several steps you should follow to ensure a smooth transition and compliance with legal requirements. Here’s a general guide on what to do:

Receive and Acknowledge the Resignation:

• Ask the employee to provide their resignation in writing (email or letter) for your records.
• Check and make sure the amount of notice is correct according to their contract or award.
• An Employee is also permitted to resign whilst they are on leave.
• An employer doesn’t have the choice to accept or reject an employee’s resignation. 
• Usually Employers will acknowledge receipt of the resignation, ideally in writing, stating that you have accepted their notice and confirming their last day of work according to their notice period or employment contract.

Review Employment Contract and Company Policies:

• Check the employee’s contract and any relevant company policies to confirm details like required notice periods and any terms related to resignation.
• Ensure that any conditions about resignation, such as the return of company property or confidentiality agreements, are clearly communicated and understood.

When the employer doesn’t want the employee to work through the notice period

• As an employer you may want the Employee to finish up immediately rather than work out their notice period.
• This is known as Payment in lieu of notice. It is critical, the employee must still be paid all their entitlements and their normal wages up to their original resignation date.  

For example, an employee who has given 3 weeks’ notice will get 3 weeks’ pay at their full rate for their usual hours. They will also still receive all their leave entitlements calculated to their notice date.

Conduct an Exit Interview:

• Schedule an exit interview to discuss the reasons for the employee’s departure and gather feedback about their experience in your organization.
• Use this opportunity to identify any areas for improvement in your organization.

Manage Final Pay:

• Calculate the final pay, including any outstanding salary, accrued leave entitlements like annual leave, and any other entitlements or deductions.
• Provide a detailed payslip and ensure that all payments are made within the required timeframe according to their award. For most awards this is within 7 days of their employment ending.
• Payments must be made in FULL with the appropriate amount of tax deducted and cannot be split over multiple pay periods.

Leave – resignation

• An employee is still able to take leave after they have resigned, so long as they comply with the companies leave policy and provide any required supporting documents.
• For employee’s that resign while on leave, the employee notice period can run at the same time as paid or unpaid leave (or other absences, such as on public holidays).
• The employment only ends at the end of the notice period. During the notice period, employees get paid in the same way as if they hadn’t given notice.

Update Records:

• Update your payroll and human resources records to reflect the employee’s departure.
• Notify your IT department to manage access rights, such as revoking email accounts, access to company databases, and retrieval of any company-owned equipment or assets.

Communicate the Departure:

• Inform your team and relevant departments about the employee’s departure to manage any operational impacts.
• Plan for a handover of the employee’s responsibilities to other team members or a replacement, if applicable.

Review and Reassign Workloads:

• Assess and rearrange workloads or responsibilities among existing staff until a replacement is hired.
• Consider whether you need to recruit a new employee to fill the vacancy.

Conduct a Security Check:

• Ensure all company property is returned, including keys, badges, equipment, and any other assets before the employee’s last day.
• Conduct a final security check to ensure that there are no outstanding issues.

Issue Documentation:

• Prepare and provide any required documents such as an employment separation certificate and references if requested.

Support and Closure:

• Offer support during the transition and thank the employee for their service to the organization.
• Keep communication open and professional to maintain a positive relationship, which can be beneficial for future networking and industry reputation.

By following these steps, you can manage an employee’s resignation effectively and maintain a positive and professional environment, ensuring compliance with legal obligations and minimizing disruption to your business.