Dismissal or resignation? Deciding who ended the employment – useful guidance for employers

This subject often arises when there is a dispute at the end of employment. Whether an employee resigned or was dismissed can sometimes be in doubt, depending on the circumstances arising. When it comes to litigation, both parties need clarity on this point when handling cases involving the end of employment. An employee who has been dismissed may have grounds to bring a claim for unfair dismissal. If the employee resigned, a claim for unfair dismissal may still be pursued, but only if it can be shown that the resignation was in response to a serious breach of contract by the employer—this is known as constructive dismissal.

Case law helps illustrate these distinctions:

• In Fentem v Outform EMEA Ltd, the Employment Appeal Tribunal held that where an employee resigns and the employer brings forward the termination date by making a payment in lieu of notice, the employee is not considered to have been dismissed.
• In East Kent Hospitals University NHS Foundation Trust v Levy, the tribunal found that an ambiguous resignation letter was not a genuine resignation but rather an expression of intent to transfer within the organisation.

To avoid misunderstandings and legal risk, employers should take the following steps:

• Establish a Clear Resignation Policy
  Implement a well-defined policy that sets out expectations around resignation format, withdrawal options, and notice period requirements.
• Document Resignations in Writing
  Always ask employees to confirm resignations in writing, even if the initial conversation was verbal. This helps avoid ambiguity and strengthens your documentation.
• Clarify Notice Periods
  Clearly communicate notice obligations as set out in employment contracts and explain any consequences if an employee fails to serve their notice.

While verbal resignations are generally legally valid, the context in which they are made is important. The courts often apply the “reasonable bystander” test—focusing not on the employee’s internal intention, but on how their actions would be interpreted by a reasonable observer. If you would like more information on how 121 HR Solutions can assist with applying appropriate policies and procedure contact us at enquiries@121hrsolutions.co.uk.