Processing a resignation

On receipt of a resignation, check the employee’s contract to determine the length of notice required, the existence of any restrictive covenants and the contractual rights of both parties during and after the notice period.
Has the employee given at least the minimum period of notice? If not will you attempt to hold the employee to the correct period of notice or, at your discretion, waive the notice period?
Do not deduct a sum from the final salary for any period of notice not served. This will be an unlawful deduction of wages, even if you have a contractual right to do so, as it amounts to a penalty clause which is unenforceable. However, you can recover any actual losses as a result of the breach of contract provided you have a contractual right to do so, otherwise you must bring a claim for damages for breach of contract.
Does the employee present a risk to the business? If so, it may be preferable to pay the employee in lieu of notice. You can pay in lieu of notice, whether or not you have a contractual right to do so, but in the absence of a pay in lieu of notice (PILON) clause the payment may be made tax free, as damages for breach of contract, and it will render any restrictive covenants unenforceable.
Do you have a right to place the employee on a period of garden leave? If you want to rely on restrictive covenants in the absence of a PILON clause you could exercise this right. Either way, garden leave may be more beneficial as it stops the employee taking up employment immediately with a competitor as, although they are not required to attend work, they remain employed with you.
Calculate the employee’s holiday entitlement from the beginning of the current leave year to the effective date of termination, according to whether or not the employee will be paid in lieu of notice, and compare this to the amount of leave which has been taken.
If the employee has outstanding holiday, is he eligible to take leave during the notice period or do you have a right to require him to take the accrued holiday? Any leave which is not taken should be paid in lieu. If the employee has taken holiday in excess of his entitlement you can recover the overpayment from the final pay but make sure you have a contractual right to deduct this where the paid holiday is more than the statutory minimum.
Check if the employee owes any other sums to the company, for example, season ticket loans, relocation fees or training costs. Make sure that the employee was been advised in writing of the requirement to repay a certain amount in these circumstances and has consented for the employer to recover the money by way of a deduction from salary.
Notify payroll of the effective date of termination and confirm any additional payments or deductions to be made to the final salary. Confirm the employee’s forwarding address to where the P45 will be sent.
Make arrangements to terminate all benefits at the effective date of termination. Make sure to terminate any discretionary and/or voluntary benefits as well as those normally awarded under the contract, such as gym membership or subscriptions to other products/services.
Identify any property that the employee has in his possession and make arrangements for these to be returned. This may include company car, mobile phone and other IT equipment but remember to collect sundry items such as keys, security passes or credit cards.
Write to the employee accepting the resignation and confirm the date employment will end and how the notice period is to be treated. Set out the arrangements in respect of holiday and return of company property and, if applicable, remind the employee of any post termination obligations.
If it is your company policy to do so, invite the employee to attend an exit interview or include a leavers’ questionnaire for completion.
Notify the IT Department to make sure that access is revoked to the company’s computer systems and other programs once employment has ended.