Summary:
Introduction
Knowing where you stand contractually is important before you tender your resignation. You might also need to check out current employment laws. At times it is also wise to seek legal advice from a professional regarding your circumstances, particularly if you have a sense that things might turn nasty or even simply to confirm what both parties’ rights and obligations are.
Key Issues to Consider
Following are a number of areas related to your employment that are of interest when its time to go:
A brief explanation of each follows.
Probation Period: Terms for notice will sometimes be shorter for the probation period. Don’t get caught out giving a month’s notice if you can legally be asked to finish in a week with only a week’s pay.
Changes to Employment Terms: If changes have been made to your employment terms since commencement, make sure you are utilising the latest amended information which should have been given to you in writing. If necessary, ask for a copy.
Annual Leave: This is important if you want to take leave before you resign. Make sure this time is not excluded from your notice period or you could end up being there longer than you would like. Don’t be surprised if requests for annual leave after you have resigned are declined (assuming this is within the terms of your contract agreement or award).
Sickness: Should you be leaving due to ill health, check to see how this is handled after resignation with regard to notice periods and sick leave entitlements etc. Long periods of sickness may have depleted your annual leave entitlement if you had already run out of sick leave.
Maternity: It is extremely important that you understand where things stand if you are leaving to have a baby. Check what leave options you have and what the employer’s obligations are regarding your position should you wish to return to work. You may find things are better than you expected and it may suit you to take leave rather than resign. This is an area where many people are poorly informed (including employers) so check your rights and responsibilities.
Notice Period: Be crystal clear about how much notice you need to give your employer and where your pay cycles start and finish so that you can manage your budget. Find out whether your employer can ask you to leave before your notice period is served and what they need to pay you if they do. You might want to negotiate something that suits you both and shorten the notice period but do find out beforehand where you both stand if you do decide to negotiate. This is especially important if you are going to a competitor.
Retirement: Check out where you stand on retirement ages. Your superannuation may be impacted which could be costly. Don’t jump the gun until you know the facts. Expert advice at this time is always a wise idea.
Disciplinary/Grievance Procedure: If you are in the midst of a performance improvement process, have been given written warnings about your performance or have a complaint (by you or against you) that is being investigated you need to understand the rights of both parties especially with regard to notice periods and entitlements in these circumstances.
Expenses: You will need to ensure you continue to meet the terms and conditions of your expense arrangements with your current employer should you resign and arrange to settle outstanding amounts. There may be specific detail around this subject that you should review.
Company Information/Intellectual Property: Employers have rights to the ownership of information and material generated within their businesses. Many contracts will outline this and have you agree to terms on commencement. It is not necessary for this to be documented for you to be in breach of laws regarding Intellectual Property. If you are thinking of taking copies of client databases, documents, manuals, etc. with you, be sure that you are not exposing yourself to legal action. If in doubt, obtain permission in writing from your current employer for anything that goes with you. Don’t be surprised if the answer is ‘no’.
Non-Compete Clauses and other Restrictions: Your ability to work for a competitor might not be straight-forward. Your ability to target your existing clients may also be restricted by agreements or contracts that you signed on commencement (even if these parties approached you). Work out what you can and can’t do. It can have consequences for any performance payments arrangements in your next job so know where you stand.
Confidentiality: Whether or not it is written and agreed to, you may have a responsibility under the law not to disclose types of information you learn at work that are confidential. Examples may include information about suppliers, clients or other third parties, trade secrets, sensitive documents or materials etc. If in doubt…. don’t.
Pay Cycles: Review your pay cycle. Whether your pay is made in arrears or in advance, your last pay may not arrive until after you leave, or even worse, you could be paid up already to beyond your resignation date. In the interests of being able to budget, check this out. Particularly if your new employer has a longer pay period (i.e. if you go from fortnightly to monthly). You may find there is a long time between your last pay and your next and you’ll need to be able to feed yourself in the meantime.
Bonuses: If you are receiving some sort of bonus it is likely that it will be linked to financial year performance or tied somehow to the calendar and paid a set period after the financial year calculations have been made. Even if your bonus is paid more regularly than yearly, determine whether it is worth staying to receive your bonus. Policies are typically written about these arrangements and should be available from the Personnel or Human Resources function in your organisation.
Stock Options: Like bonuses, the fine print around stock options is usually documented and available from the Personnel or Human Resources function in your company. Stock options are one way employers can hold on to people for longer periods because they are often structured for the longer term and offer significant financial rewards for sticking around. When options can be exercised and whether you need to be an employee in order to exercise needs to be well understood. Similarly, you may have a limited timeframe to sell any vested options post resignation. Know your facts and avoid disappointment. You might find it is worth moving back your start date if the price is right! There is a reason why these incentives are often affectionately referred to as ‘golden handcuffs’.
Commission Payments: Commission payments are those made over and above salary in exchange for meeting a sales or business development target. Your length of service and past performance may vary the commission structure. Check the detail here and ensure you are aware of your entitlements and what impact resignation has on these if any.
The terms and conditions vary between companies and contracts but the above illustrates how important it is to understand your rights and obligations (as well as those of your employer) before you resign.
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