What to do when an employee quits

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Employee resignations can be a difficult and stressful experience for employers. Whether the departure is expected or unexpected, it’s important to act quickly, calmly, and professionally to ensure your business continues functioning effectively.  

Regardless of how you feel about an employee's departure, express gratitude for their contributions. Showing appreciation for their work can help maintain positive relationships, preventing negative talk about your business in the future.  

Legal Obligations

Notice periods. Under the employment standards legislation in some provinces, employees are required to provide notice the same way employers are. Notice may also be outlined in the employee’s employment contract. 

No termination within the notice period except with pay. If you terminate an employee when they give you notice, they can file a complaint of wrongful or constructive dismissal. If you feel you need to terminate the employee, please contact a CFIB Advisor for guidance. 

Final pay. When an employee resigns you must provide all outstanding wages, accrued vacation pay, and a pay stub. Employment standards legislation sets timelines for pay to be issued. 

Taking back a resignation. If an employee changes their mind about resigning, you are not under any obligation to accept the reversal if it causes operational harm – i.e., you have already hired a replacement. 

Human Resources

Get the resignation in writing. It’s not always legally required, but having a written resignation will help reduce disputes, clearly identify the last day of work, and will permit accurate record-keeping. 

Confirm receipt of the resignation. Take the opportunity to put in writing the final day of employment, details on returning company property/equipment, and the next steps for payroll and any benefits such as health insurance. 

Retrieve company property and remove access to computer systems. Collect keys, corporate credit cards, ID badges, pass cards etc. Ensure any equipment such as computers, cell phone, uniforms etc. are returned. Remove the employee’s access to company email, inventory, customer management software, etc.

Knowledge transfer. Ask the employee to document their current tasks and processes. If practicable, have the departing employee train their colleagues. Review any outstanding projects, files, customer accounts with the employee and reassign to ensure nothing gets missed.

Let the team know. Advise staff of the employee’s last day and who will take on their responsibilities in the interim. Losing a colleague feels less daunting if staff know the matter is in hand and a plan is in place. 

Exit interview. Exit interviews allow a business owner or HR department to learn why the employee chose to leave. The feedback can help identify areas that need improvement so necessary changes can be made to prevent future employee dissatisfaction. Note that employees are not obligated to answer any of the questions. 

Update HR records. It’s important to keep accurate documentation in case of disputes later. Ensure you record the last day of employment, any equipment/company property that is returned, and outstanding vacation paid out.

Recruit or reassign. Decide whether you will hire a replacement or reassign the employee’s tasks among current staff. You could also take the opportunity to review all roles and look for potential efficiency improvements. 

Focus on retention:   

It can be vital to retain good employees to keep your business running smoothly and reduce employee turnover; focusing on retention can help. Sometimes, employees quit because they feel they were not trained well enough, undercompensated, or unappreciated. Some steps you can take include offering employee training and development, creating a positive work environment, and implementing employee recognition programs that empower the employee. 
  
Have questions? CFIB members can contact our Business Advisors at 1-833-568-2342 or by e-mail at cfib@cfib.ca.

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