Employee exits are always emotional whether positive or negatively. It often plays out to whether the employee will be missed or not.
Some get lavish send of parties from colleagues or the entire organisation while others are escorted by security to the gates like irritants to be gotten rid off.
However, the protocols of managing employee exists for HR people can be quite complex. The plethora of legal process boxes to be ticked off the emotional relationships to be managed for the one leaving and the others remaining behind.
Employee exits come in different forms and have specific and distinctive legal processes for handing each.
Types of Employee Exits: A Comprehensive Guide
Employee exits occur for various reasons, and organizations must manage them effectively to maintain compliance, protect company interests, and ensure smooth transitions. Below are the different types of employee exits, along with explanations for each.
The first type are Voluntary Exits (Resignation) during which the employee initiates the exit by submitting a formal resignation, usually with a notice period. Common reasons given for voluntary exits such as resignation are for career advancement elsewhere, dissatisfaction with job role, pay, or culture, personal reasons (relocation, family, health). Voluntary Exits are often mutually agreed at the point of exit.
Then there is Involuntary Exits (Termination) during which the employer ends the employment due to prior agreed end-of-contract, non-performance, misconduct, or policy violations. Tyoes of such terminations will include Performance-Based Termination which can occur when an employee fails to meet job expectations despite warnings. A Misconduct Termination or termination for misconduct occurs in violation(s) of company policies (theft, harassment, insubordination and the like).
Compulsory Resignations often occur in executive employment where trust, confidence and mutual respect breaks down between a shareholder(s) and the board or the board and some management persons for which the affected employee is required or encouraged to resign, failing which more dire consequences may apply.
This often plays out where the employee offends in a way that needs to be PR-Managed outside the public space to protect brand credibility. ’At-Will’ Termination(s) occur in jurisdictions like the US where no reason is required. However, there are express and elaborate regulations to protect indiscriminate and process abuse.
Layoffs or Redundancy or Downsizing or Reduction-in-force (RIF)’ occurs during job elimination due to restructuring, financial difficulties, or automation. RIFs are not performance-related, often includes severance packages and require strict legal compliance.
Last but not the least is Retirement where Employee exits the workforce permanently, typically after a set age of 60 years or as regulations and laws require. This article will be limited to employee exits by resignation and explores the key conditions under which an employer should accept an employee’s resignation, the legal implications, best practices, and how to mitigate potential risks.
.Employee resignation is an inevitable aspect of workforce management, and should be handled professionally to maintain positive employer-employee relationships, ensure smooth transitions, and to protect business interests.
Accepting an employee’s resignation should not be a mere formality, it should involve assessing legal, contractual, and operational considerations.
This is because risks such as employee turnover is a significant challenge for organizations, impacting productivity, morale, and operational costs. Understanding the key factors that trigger resignations allows employers to address underlying issues and improve retention. Research indicates that employees leave jobs for a variety of reasons, ranging from dissatisfaction with management to lack of career growth.
One of the most frequently cited reasons for employee resignations is ineffective leadership. Employees often leave managers, not companies. Poor management practices, such as micromanagement, lack of communication, favoritism, and unfair treatment, contribute to dissatisfaction.
A Gallup (2023) study found that 50% of employees who quit their jobs cited their manager as a primary reason. When leaders fail to provide support, recognition, or clear direction, employees feel undervalued and disengaged, prompting them to seek opportunities elsewhere.
Employees are more likely to stay with an organization that offers career advancement opportunities. When workers feel stagnant, without promotions, skill development, or new challenges, they become disengaged.
LinkedIn’s Workplace Learning Report (2023) revealed that 94% of employees would stay longer at a company if it invested in their career development. Organizations that do not provide training programs, mentorship, or clear career paths risk losing ambitious employees to competitors who offer better growth prospects.
While salary is not the only factor in job satisfaction, it remains a critical consideration. Employees expect fair and competitive compensation that aligns with industry standards and their experience. If they perceive their pay as insufficient, especially compared to market rates, they may seek better-paying roles.
Additionally, a lack of benefits (such as health insurance, retirement plans, or flexible work options) can drive resignations. According to a Payscale (2023) survey, 25% of employees who left their jobs did so due to dissatisfaction with pay and benefits.
A toxic work environment, characterized by harassment, discrimination, excessive office politics, or lack of work-life balance, drives employees away. A Harvard Business Review (2023) study found that workplace incivility (such as bullying or disrespect) increases turnover by 47%. Employees who experience hostility or feel unsafe are more likely to resign, even without another job lined up. Companies that fail to foster an inclusive, respectful, and supportive culture risk high attrition rates.
Chronic stress and burnout are also leading causes of employee turnover. When employees face unrealistic deadlines, long hours, and unsustainable workloads without adequate support, their mental and physical health suffers. The World Health Organization (WHO) recognizes burnout as an occupational phenomenon, linking it to decreased productivity and higher resignation rates.
A Deloitte (2023) survey found that 77% of professionals have experienced burnout, with many leaving their jobs as a result. Employers who ignore work-life balance and employee well-being contribute to this exodus.
A Gallup (2023) study found that 50% of employees who quit their jobs cited their manager as a primary reason.
________________________________________________________________________________
Not all resignations are work-related. Some employees may leave due to personal circumstances such as relocation, family responsibilities, health issues, or pursuing further education. While employers cannot always prevent these resignations, offering support (such as remote work options or extended leave) can sometimes retain valuable employees.
Legal and Contractual Obligations for Resignation
Before accepting an employee’s resignation, employers must review the terms outlined in the employment contract and labor laws. Many jurisdictions require employees to provide a notice period, typically ranging from two weeks to one month, unless otherwise agreed upon. Senior Management roles can have up to three month months notice arrangements. Failure to adhere to contractual obligations could result in legal disputes or financial penalties.
Employers should also verify whether the resignation is voluntary and not coerced. If an employee claims they were forced to resign, it could be construed as constructive termination/dismissal, leading to legal repercussions. Constructive termination/dismissal occurs when an employee resigns due to unbearable working conditions, such as harassment, discrimination, or unilateral changes to employment terms (ACAS, 2023). Employers must ensure that resignations are genuine and not the result of workplace misconduct or pressure.
A resignation should be formally submitted in writing to avoid ambiguity. While verbal resignations may sometimes be accepted, written documentation provides clarity and serves as evidence in case of disputes. The resignation letter should include the employee’s intention to leave, the last working day, and a brief reason (if applicable). Employers may request a formal exit interview to understand the reasons behind the resignation and address any concerns (SHRM, 2023).
If an employee submits a resignation in the heat of the moment (e.g., during an emotional outburst), employers may allow a cooling-off period before finalizing the decision. Some organizations have policies that permit employees to retract resignations within a specified timeframe, provided the request is made before the notice period expires (CIPD, 2023).
Accepting a resignation also involves ensuring that the employee fulfils notice-period obligations. The notice period allows employers to find a replacement, transfer knowledge, and minimize disruptions. If an employee requests an early release, employers may agree under mutual consent but should document the agreement to prevent future claims.
In some cases, employers may place an employee on “garden leave,” where they are relieved of duties but remain on payroll during the notice period. This practice is common in roles involving sensitive information or competitive industries, preventing employees from joining rivals immediately (IRS, 2023). Alternatively, employers may negotiate a pay-in-lieu-of-notice (PILON) arrangement, where the employee is compensated for the notice period but leaves immediately.
Before accepting a resignation, employers should ensure that the departing employee completes all exit formalities, including handover of responsibilities where the employee should document pending tasks, provide access to necessary files, and train successors if possible. Emploeyr’s property such as laptops, access cards, and confidential materials in the possession of the employee must be retrieved to prevent data breaches.
Employers must process pending salaries, bonuses, and benefits, including unused leave encashment (if applicable). Finally, Non-disclosure agreements (NDAs) and restrictive covenants made should remind resigning employees of any post-employment confidentiality or non-compete clauses. Failure to enforce these conditions could lead to operational disruptions or legal risks, particularly if the employee joins a competitor with proprietary information.
If a key employee resigns, employers may consider counteroffers, but this approach should be used cautiously. While counteroffers may retain talent temporarily, they can create salary disparities and set a precedent where employees threaten resignation for raises (Harvard Business Review, 2023). A more sustainable approach involves proactive engagement, career development programs, and competitive compensation structures.
Accepting an employee’s resignation involves more than acknowledging their departure. Employers must consider legal compliance, contractual terms, transition planning, and risk mitigation.
By enforcing structured resignation protocols, conducting thorough exit processes, and analyzing turnover causes, organizations can maintain operational stability and foster a positive work environment. Resignations, when managed professionally, can also serve as opportunities for organizational growth and improved employee relations.
