End of Employment - A Guide for Employers & Managers

Considerations

• A verbal resignation is as valid as a written one, although it can be harder to provide evidence. The employee should confirm the resignation in writing
• The employee is normally bound by the Contract of Employment to work a period of notice
• The employer should always accept a resignation and confirm that acceptance in writing, specifying the last day of work and final payment details

Garden Leave

• Normally involves sending the employee home and excluding them from the premises and/or from having any contact with other employees, customers or suppliers
• During garden leave employees are still bound by the terms & conditions of employment. Garden leave is generally given to senior executives or sales staff
• The employer needs to ensure that the employee does not suffer a detriment as a direct result of being placed on garden leave, for instance long notice periods can negatively affect the employee’s ability to carry out a job in the future and/or the employee may lose money especially if the role is commission or bonus based. In both instances the employee may be able to make a successful claim for compensation

Pay in lieu of notice (PILON)

• A PILON is a payment made to an employee in place of working notice. In other words the employee’s finishing day will be brought forward and payment made in lieu of the notice period
• It is highly recommended that the employer should seek the agreement of the employee before paying PILON, as there may be a breach in the contract of employment if PILON is forced through without the employee’s consent

Other Considerations

• Calculating final payment taking into account overtime, commission, outstanding holiday pay, outstanding loans, share option and bonus schemes
• Checking the rules of the pension scheme, particularly if the employee is retiring early by mutual agreement
• Conducting an exit interview
• Recovering company property including computer, mobile phone, car, security passes
• Arranging a leaving gift or social event
• Planning for the pending vacant position or division of duties

Policy and Procedure

• Set out a standard process and details action required by the Employer and Employee

Letters and Forms

• Provide end of employment letters and exit forms