February 24, 2015

Should an Employee Be Allowed to Rescind Their Resignation?

ResignAccording to research from Hay Group, employee turnover rates spiked in 2014, and they’re set to reach 23.4 percent by 2018. The increasing volatility of employee turnover poses plenty of challenges to employers, but I’d like to focus on one in particular, because it seems to be an issue that gets little attention: the employee who wants to rescind their resignation. It’s an odd situation, but it does happen, and it can cause quite a quandary for HR.

So, the question is: should an employee be allowed to rescind their resignation?

Do Employees Have a Legal Right to Rescind?

Let’s start by looking the situation at from a legal perspective. In the U.S. and the U.K., employers are not legally required to allow an employee to rescind a resignation. Employers are generally free to allow or reject an employee’s request to rescind their resignation unless the contract or company policies state otherwise.

However, there are some risks in categorically refusing all rescinded resignations. For example, say the employee resigned under pressure or stress that could be deemed excessive or unfair; also say that the company failed to properly address the conditions that led to the employee’s resignation. In these circumstances, the company might at least have a moral — and possibly even legal — obligation to at least consider a rescinded resignation.

Employers must also strive to be consistent in how they handle rescinded resignations. If an employer is not consistent in its approach to accepting or rejecting rescinded resignation requests, it is possible that said employer could appear as if it is unfairly discriminating against certain employees. Say, for example, a company allowed five employees to come back over the last few years, but did not allow a sixth employee — who happened to be part of a protected group — to come back. This could cause significant legal trouble for the employer. The lesson here is that, whether rejecting or accepting a request to rescind a resignation, employers should document the criteria they use to make their decisions. Employers should also ensure that they fairly apply the same criteria to all future decisions.

The Operational Argument: Why It Sometimes Makes Sense to Let Employees Return

So, we’ve taken a quick look at the legal side, but what about the operational side the situation? When deciding whether or not to accept a rescinded resignation, employers should always consider the candidate’s performance level first and foremost. If the candidate consistently performs better than their colleagues, it would make good business sense to allow them to return.

Employers should also note that studies show that, for the first two years on the job, current employees generally perform better and cost less than external hires for the same role. This means that employers may not be able to find comparable replacements for resigned employees, and they may be better off going with the proverbial “bird in the hand,” even if that bird is not an extremely high performer.

I think the research cited above makes a strong operational case for allowing employees to rescind their resignations — however, I don’t think that employees should simply be able to jump back into the driver’s seat. Since the existing contract was terminated when the employee initially resigned, the employer may be able to renegotiate the role a little. I’m not suggesting that employers “punish” returning employees with pay cuts or anything of the sort; rather, I believe employers may want to consider restructuring the employee’s role a bit, perhaps by adding or removing responsibilities, changing the employee’s department, or even offering a slightly different role. If an employee resigned from their previous role, it likely makes sense for employers to adjust the role so that the employee does not end up resigning yet again.

In general, employers should not ignore the circumstances that led the employee to resign in the first place: given the fact that the employee was distressed or dissatisfied enough to resign once, they could easily do it again. Employers should view the resignation as a cry for help and make sure that, if they do allow an employee to rescind their resignation, they do so in a way that addresses the issues that led to the resignation. Doing so will create a more stable and engaged employee.

This article does not constitute legal advice and there are subtle variations in employment law as it pertains to this topic, depending on where your business operates. It is strongly suggested that you seek legal counsel before making decisions about rescinded resignations.

Read more in Employee Turnover

Kazim Ladimeji is a Chartered Member of the Chartered Institute of Personnel and Development, and has been a practicing HR professional for 14 years. Kazim is the Director of The Career Cafe: a resource for start-ups, small business and job seekers.