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When is a resignation actually a dismissal?

When faced with a difficult situation, or troublesome employee, the pressure on HR to fix it can build, causing damaging radiation of tension throughout the business.

Whilst forcing an employee to resign on the threat of dismissal may feel like an easy option, you should tread carefully since it may well expose the business to a legal claim.

With Boris Johnson’s long-hailed departure still to come, it poses an apt reminder for those in HR to pause and consider how best to handle the departure of executives who have outstayed their welcome.

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Although politics is in many ways distant from our daily lives, the underlying motives and considerations are not necessarily that different and so the road that led to Johnson’s departure may be instructive for HR teams.

After all, there are increasing numbers of no confidence votes taking place in relation to executives’ pay packages. This often signals a mismatch between the executives’ own view of their just reward for the prior year’s performance and the board’s view of the state of the market, the economy and future prospects.

Many questions surround Johnson’s resignation. Was his final blow a direction from Sir Graham Brady, chair of the backbenchers’ 1922 committee that if he didn’t quit, the rules would be changed to force him to leave?

It’s a moot point in relation to politicians, but it is vital for most organisations to recognise that threats of dismissal that prompt a resignation may amount to unfair dismissal.

There is logic to a swift separation, and it may be better for both parties. But if you want to avoid a claim for unfair dismissal you must make it clear that you are not necessarily going to dismiss the executive if they don’t resign.

Rather, you are going to implement disciplinary or capability proceedings or, if there is no performance or conduct issue, you are just inviting them to resign and offering them acceptable terms to do so.

You would be well advised to ensure that any conversation about a potential agreed exit is held on a “protected” or “without prejudice” basis.

Then, so long as you treat your employee with respect, and remember there are at least two sides to every story, you should be fine. Most employees don’t want to work in a place where they are no longer welcome.

In Sheffield v Oxford Controls, a 1979 case, the employment appeal tribunal (EAT) enunciated the principle that employees who resign just because they are told that if they don’t they will be fired, are dismissed – constructively – even if they dutifully sign a resignation letter.

The EAT went on to note that if an employee is, however, induced to resign because of the attractive, or at least satisfactory, separation terms offered rather than by the threat, then the resignation will be genuine, and not a constructive dismissal.

The essential element here is that if you wish your departing employee to offer their resignation voluntarily, you must allow them some room to influence the terms of departure.

Of course, if you do not think your departing employee deserves good separation terms then don’t offer them and don’t ask them to resign. Instead, instigate fair disciplinary or capability procedures.

If the employee thinks they should stay in post they will have a fair chance to establish that in the procedure, and if they realise that there is something to the charges or they are otherwise not able to perform their role, then they probably will resign anyway without you having to ask.

Georgina Calvert-Lee is senior consultant in employment law and equality at Bellevue Law