With year-end fast approaching, many employers may find themselves in a difficult position, faced with a surge of resignations. This trend can disrupt business operations, especially during a critical time when companies are wrapping up annual projects, entering peak business season or planning for the new year.

Many employers mistakenly believe that they have the right to refuse to accept resignations. In reality, once an employee indicates an unequivocal intention to terminate the employment relationship by giving notice of his or her resignation, the employer cannot prevent the employee from leaving its employ by rejecting the resignation. Resignation is a voluntary and unilateral act that terminates the employment relationship once communicated to the employer. The employer’s control is limited to when the resignation will take effect and what will happen in the interim. Additionally, the employer may have contracted for certain restrictions to apply to the employee post-termination.

First and foremost, employers need to verify whether the employee has given notice in accordance with their employment contract, or the prescribed minimum notice periods in the Basic Conditions of Employment Act if the employment contract does not state a notice period. Employers should also check whether the employee is subject to any restraint of trade clauses.

If a restraint of trade is in place, the employer needs to weigh their options carefully. This includes considering the prospects of successfully enforcing the restraint, its significance to the business, the potential consequences of not enforcing it and whether it is worth the financial cost and management time associated with pursuing enforcement. When it comes to enforcing a restraint, time is of the essence. Employers must decide promptly on their approach and communicate it to the employee clearly and unequivocally.

Employers also need to determine their preferred timing for the employee’s termination. Would it be more beneficial to facilitate an immediate departure, retain the employee for as long as possible, or neutralise their influence during the notice period? This will require a careful consideration of the employee's role, the potential impact on the team, and the overall business needs.

By clearly defining the desired result, employers can choose the most appropriate strategy and ensure clear communication with the employee. Ideally, all of these considerations should be taken into account and decisions should be made before the employer responds to the employee’s resignation letter.

Employers may choose to compensate the employee for the notice period instead of requiring them to work through it, a practice often referred to as "payment in lieu of notice". This effectively waives the employee’s notice period and the employer pays them for this period instead. As a result, employment terminates sooner than it would have if the employee had been required to serve their notice period (whether being sent home or not). Where this route is taken, the employment relationship comes to an immediate end and the terms of the employment contract are no longer binding, save for duties of confidentiality and the like which survive the termination of the employment relationship.

Employers often elect to pay employees in lieu of notice where there are concerns that an employee's continued presence in the workplace might be disruptive and/or if the employer wants to expedite the transition process and move forward with finding a replacement. However, it is important to bear in mind that the effect of this is that the employee is immediately free to take up employment elsewhere, possibly with a competitor (if they are not bound by an enforceable restraint) and this may not be in the best interests of the business.

A preferred option may therefore be to hold an employee to their notice period (i.e. requiring that they serve their full notice and therefore continuing to pay them their ordinary remuneration as the employer still employs them for the notice period) but place them on gardening leave. This practice involves instructing the employee to stay away from the workplace during the notice period while still being on the employer’s payroll. This has the effect that they remain in the employer’s employ for the notice period but are still sterilised from the business and removed from the workplace (to protect the employer’s confidential information and proprietary interests). This option may be advantageous where the employee has access to sensitive information or strong customer or business connections, which could be at risk if they remain in the workplace.

In addition, where gardening leave is implemented and an employee is bound by a restraint of trade, the restraint period only commences after the notice period has expired. This provides the employer with additional protection (on top of the full restraint period) from during the notice period, as the employee remains isolated. Gardening leave thus delays the restraint period and allows an employer to obtain this added layer of protection, something that would not be available if the employer opted for payment in lieu of notice.

That being said, employers need to carefully consider whether the restraint of trade is likely to be enforced by a court having regard to the particular circumstances of the employee, including the length of any gardening leave period. Ultimately, this is a question of whether any period of enforced commercial inactivity, whether by way of garden leave or a more conventional restraint of trade, or both, is reasonable given the proprietary interests the employer seeks to protect.

A third option would be to ask the employee to work their notice period. While this option may not always be appropriate when dealing with a senior and/or disgruntled employee, it can ensure that the employee continues to contribute to the company until their departure, allowing for a smoother handover of responsibilities. It also provides time for the employer to find a replacement or redistribute the workload among existing staff.

In some cases, employers may even try to negotiate a later departure date with the resigning employee. This can be particularly useful if the employee holds a critical role or if their departure coincides with a busy period for the company. Negotiating a later date can provide additional time for the employer to find a suitable replacement and ensure a more seamless transition. However, this option depends on the employee's willingness to extend their notice period because resignation is, after all, a unilateral act.

Employers must carefully implications of each approach — whether it is payment in lieu of notice, gardening leave, working the notice period, or negotiating a later departure date, as well as whether or not to hold an employee to any restraint. Given the complexities involved, it is advisable to seek professional legal advice to make informed decisions that protect your business interests.

Audrey Johnson

Executive Employment

[email protected]

Rachel Weisz

Candidate Legal Practitioner Employment

[email protected]