In the constantly changing compliance environment it is important, even in established, sophisticated businesses, to take some time out occasionally to review the business systems and approaches to ensure that they reflect best practice and are appropriate for the business size, style and operation. It is staggering how quickly a business can outgrow a process that used to work for them, or how quickly a small change that is missed can lead to large issues later on. This Employment 101 Series is all about going Back to Basics – ensuring that the simple systems and requirements are understood and operational, so that we can build on them and focus on the growth of the business.

Resignation is a common way for the employment relationship to end. It can be clean and simple, but it is also sometimes very very messy. It is commonly thought by businesses that when an employee gives their resignation, verbally or in writing that resignation is considered final and the employer is not required to take any further action or to take the employee back on if there is a change of mind.  What is less well understood is that this is not always the case, there are exceptions to the rule that ‘all resignations are final and binding’, the chief exception is when an employee resigns in the “heat of the moment” and the secondary exception is when the resignation was under duress and amounts to an ‘effective dismissal’.

The requirement to document

It is important for all businesses to understand that when an employment relationship is ended there are requirements for documentation and communication that are equivalent to the beginning of an employment relationship.  When the employee is resigning this is just as true as when the employee is terminated.

When an employee tenders their resignation the business should seek such resignation in writing and should endeavour to capture within that documentation process the reasons for the employees resignation.  In most cases this is not a problem, as employees will often tender resignation in writing and will provide, as a matter of course, a reason for their resignation within that document;  “I have secured employment elsewhere”,  “”I am moving out of the area”, “I am going to care for a family member” etc.

Upon receiving a resignation the business should confirm receipt of the resignation, confirm the process for final payments, entitlements and the return of property and other business matters and should do so in writing.  This communication should also reflect back to the employee the businesses understanding of the reasons for resignation; “it is understood that you have secured other employment, the business thanks you for your service and wishes you well in your future endeavours”.

However, when the resignation is tendered verbally, and the employee resists polite requests to tender the resignation in writing, the business should still undertake to document the resignation, it should be noted in that acceptance of resignation letter, the method of resignation, the reasons that were given at the time and the fact that a request for written resignation has not been forthcoming but respecting the employees right to withdraw their labour the business has accepted the verbal resignation.

In most cases this process of accepting the resignation of an employee will end here, final payments will be processed and the business will move on with focusing on engaging staff to fill the gap left by the departing employee.  However, in some cases the employee may seek to retract their resignation.  The question for businesses then is often, is that allowed.

I take it back

The short answer is, sometimes.  It has been demonstrated in many cases before the courts that resignations made in the “heat of the moment” can be taken back in some circumstances and that businesses should be certain to provide a process to ensure that positions are not filled too hastily, as a retraction could be issued.

Some circumstances will result in a resignation not being considered valid, creating a situation where the employer must take the employee back on.  This is most common with verbal resignations, communicated after a performance counselling session, or an incident at work.

When an employee resigns under pressure of a situation there is reason for employers to ensure they are following due process before closing the employment file or recruiting for additional staff.

Final is Final

To ensure that the business can satisfy its staffing needs employers need to treat all resignations as tentative until:

  • Resignation has been received in writing;
  • A final date of work has been nominated or negotiated; and
  • Resignation has been acknowledged by the businesses in writing and delivered to employee.

Only after these thing have happened can the business put together final payments with any entitlements and begin recruiting for a replacement.

It is important that businesses tick all of these boxes before closing the employment file. As demonstrated in a recent case (Minato v Palmer Corp) an employee told their supervisor to “shove the f**ing job up you’re a***”, and due to the lack of written confirmation on either part the employee then brought an unfair dismissal case.

Effective Dismissal

A similar situation can occur, where an employee who is subject to performance management within the business, resigns rather than accepting the performance management process.  In these circumstances, when an employee resigns, even if the resignation is in writing and states a reason other than the performance management, it is important for the business to acknowledge the fact that the employee had been subject to reasonable performance management activity at the time; “the business acknowledges your right to withdraw your labour and notes that you have indicated that you are resigning due to family pressures, however it also notes that this resignation has been received while you were subject to formal performance management activity aimed at explaining breaches in policy/performance and providing clarification of expectations of the business.”

More From This Series So Far

Employing Staff 101:

Here to Help

ACAPMA members are reminded that ACAPMA has a series of resources from Quick Reference Guides to template letters and investigation and reporting checklists that can assist with ensuring compliant and consistent responses in this area, and can call on the advice and support of the ACAPMA Employment Professionals via employment@acapma.com.au .

HR Highlights are things to consider, implement and watch out for in your business.

They are provided as general advice and you should seek further advice on your situation by emailing employment@acapma.com.au it’s free for members.

ACAPMA Membership is affordable at only $810 per year for a single site and valuable with sites gaining HR advice support and representation as well as a raft of other benefits and discounts.  Click here to learn more about ACAPMA Membership.

Elisha Radwanowski BCom(HRM &IR)
Executive Manager Employment and Training
ACAPMA

SHARE THIS ARTICLE: