The Great Resignation – how to minimise disruption across your business

One of the most widely publicised phenomena caused by the pandemic is what has now become known as The Great Resignation.

According to a poll undertaken by recruiter Randstad UK in November of last year, almost 7 in every 10 employees (69%) said they felt confident to move to a new job within just a couple of months.

Flexible working, higher salaries and better IT equipment are all cited as motivating factors, with many people re-evaluating what matters most to them after what has been a tough two years.

The turnover of staff is likely to have a significant impact on many businesses from an operational perspective, while managers look to recruit, induct and train new team members as quickly and efficiently as possible, while also managing the exit of others.

Here, Banner Jones’ head of employment law, Katie Ash, offers some advice on how to make sure that the process goes as smoothly as possible, as well as what business owners might want to consider in terms of updating contracts and policies before welcoming new starters.

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When someone hands their notice in at work it inevitably invokes a whole range of emotions, especially if that person has been with the company for a long time, or if they have been a particularly good worker.

Employers will no doubt feel anxious about what recruitment challenges lie ahead, and how best to manage the exit of the current employee.

The number of enquiries we have managed in relation to such matters has really escalated over the last six months or so, as many workers look to refresh, or indeed totally change, their career paths. And some of the most common questions are around notice periods, garden leave and unused holidays.

Notice Periods

In the vast majority of cases, when an employee hands their notice in they are keen to move on as quickly as possible. It’s not uncommon for conversations to take place around exit dates that are sooner than their contract stipulates.

Where that can be accommodated, great. It’s always good to end the relationship on a positive.

However, from a legal perspective, employers do have a right to enforce the full notice period. This might be necessary in cases where the role is vital in the continued running of the business.

If the exiting employee still chooses to leave before their notice period expires, it is possible to sue them for breach of contract, and to claim the difference in the cost of appointing someone to do the role on a temporary basis.

This can prove costly and time consuming, however, so negotiating an exit date that works for both parties is usually the best option. An employment lawyer can help you with this if needed, which might be helpful if tensions are running high.

Garden Leave

If the employee is moving to another company which is a direct competitor, you may choose to place them on what is known as ‘Garden leave’ so that they are not privy to any potentially commercially sensitive information during their notice period.

During this time, you may ask the member of staff not to come into work, or to work at home or from another location.

However, there are a couple of ‘watch outs’ with enforcing Garden Leave on an employee. Firstly, check your contracts allow you to use this option. If it does not, you could find that you cannot hold the employee to account on other matters such as confidentiality and post termination restrictive covenants.

Equally, it’s important to note that they are still entitled to the same pay and contractual benefits while on Garden Leave. A failure to honour these obligations could land you in hot water.

Holiday Pay

Holiday pay is also often a hot topic. For most workers, it’s a case of calculating what holiday is owed based on what the employee has accrued and is yet to take. However, if your staff work shifts, or regular overtime, those calculations might prove a little trickier.

As time consuming as it may be, there is no “one size fits all” when it comes to holiday pay and you should work out how much each member of staff is entitled to on an individual basis. Essentially, they are entitled to a week’s pay for a week’s holiday and shouldn’t be disadvantaged for taking holiday.

Holiday pay for those who work shifts should be calculated as the average number of weekly fixed hours they have worked, ideally over the previous 52 weeks, at their hourly rate.

If your staff have no fixed hours because they are casual or hold a zero-hours contract, then their holiday pay will be based upon their average pay; and again, this should ideally be based on the previous 52 weeks, including only the weeks that they were actually working and being paid.

In addition, you must always check what your contracts say. In cases where you offer more holiday than the statutory minimum (28 days including bank holidays) and your employee does not give notice in accordance with the contract, then it is possible to include a clause in your contracts which states that only Working Time holiday will be paid to them on termination.

If you have this sort of clause, then your liability to pay for accrued but unused holiday will be limited to the statutory minimum and not the enhanced amount that you would otherwise provide under the contract.

Preparing your business for new employees

It’s always a good idea to review and refresh employee contracts on a regular basis to make sure that they are up to date and that they reflect the current operating model of your business; and also any legal developments that may have taken place.

After the last year or so, there are a number of factors that you might want to consider as part of this process, and especially when taking on a new member of staff.

Flexible working policies, holiday allowance, lay off periods, reduced working hours and even changes to work locations are all something that may now need serious consideration and the more robust your contract is, the better for all.

If you are intending to take on agency workers in order to manage any gaps, you will also want to keep in mind the changes that formed part of the Good Work plan and came into force in 2020.

As part of these changes there is now greater transparency around the terms and conditions between the employer and the individual, specifically in relation to the role, its responsibilities and the worker’s rights.

The major legislative shift is that every worker MUST receive a statement of their rights on day 1 of the appointment. This is intended largely for agency workers and will mean they are better informed with regards to what they are signing up to from the outset. However, this applies to everyone, not just agency workers.

As an employer, it means contracts must be delivered on day one, and not a week or several weeks down the line, so preparation is key!

Ideally, employees should also receive their contracts in advance of their first day of work, and every effort should be made to ensure that these are signed, returned and filed so that everyone is working from the same hymn sheet from the outset. This will certainly make onboarding the new staff member easier, as the terms of the relationship will be clear from the outset.

If for whatever reason that doesn’t happen, having a paper trail in place to demonstrate that the employee or worker received and was prompted to return a signed copy will be vital should anything go wrong further down the line and an employment tribunal becomes involved.

If you have any questions surrounding employee contracts and how to ensure that they meet the needs of an increasingly agile workforce, please contact the Banner Jones Employment Law team. We offer a flexible range of appointment types to suit your business.