How to deal with a tactical resignation in gross misconduct cases

When an employee is dismissed for gross misconduct, they are generally dismissed without notice or payment in lieu of notice.

Their employment therefore ends immediately. Tactical resignations can pose a dilemma for HR where an employee resigns mid-investigation or during a disciplinary process for gross misconduct. Here are five key points:

1.      You can’t refuse to accept a resignation

An employee has the right to resign at any time - even if disciplinary proceedings are ongoing. While frustrating, employers cannot reject a resignation simply because misconduct is being investigated. Resignations can only be rejected where they are viewed as having been given ‘in the heat of the moment’. However, if, following reflection, the employee still wishes to resign then the resignation will be valid.

2.      You can choose to continue the process

If the allegations are serious, and especially if they might need to be reported to a regulator or if the employee is in a position of trust, it may be appropriate to complete the disciplinary process even after resignation. This is especially important where a reference may be requested in the future.

3.      Continuing might save costs

Where an employee is serving a long notice period but would have been dismissed summarily if the process had concluded, it might be financially beneficial to complete proceedings. If dismissal for gross misconduct occurs before the notice period ends, you would not need to pay the remainder.

4.      Impact on good leaver/bad leaver

A finding of gross misconduct, even if made after resignation has been validly tendered, might impact on the amount that the employer would otherwise have to pay on exit in relation to benefits such as shares, accrued bonuses and long-term incentive plans. HR should check the wording of each applicable benefit in detail when weighing up whether to continue with an open process.

5.      Impact on future reference requests

Be careful how you handle reference requests following a tactical resignation. If you discontinue any disciplinary process, then the allegation cannot usually be referred to in response to any reference request – it has not been subjected to an open process and the employee has not had the opportunity to respond to it. Check your policy on references. You should restrict yourself to a factual reference if you can.