Employee exit management

Employee exit management is the process used within many businesses to terminate employees contracts in a professional manner. It applies to employees who have resigned and those that have been terminated by the company.

When an employee is terminated there are a number of considerations that an organization needs to make in order to cleanly end the relationship between the company and the employee. The company as a legal entity has a responsibility to the employee which may extend beyond the period of employment and this is the primary focus of the exit procedure.[1]

As part of computer security, the process will also ensure that access privileges are revoked when a person leaves, and may also cover other issues such as the recovery of equipment, keys and credit cards to ensure that security integrity is maintained.

Termination of Contract

Employees may terminate their contract by resigning or an employer may terminate the contract by dismissing an employee.[2]

Short term Employment

Short term employment is when an employee is hired for less than one year. These will normally end automatically once the end date is reached. However, the employer may wish to end the contract earlier or extend the contract.

Temporary Contract

A temporary contract is usually around 3 months long. Employers may recruit temporary employees during busy periods such as Christmas. At the end of the temporary contract the employer may wish to offer you a permanent position or extend the temporary contract. Temporary contract will also automatically end once the end date is reached.

Contractor basis

Employees maybe hired on a contractor basis for the completing of a certain task. Once the task is completed or the event takes place the contract ends.this type of contract employees falls under seasonal works.


Dismissal is when you end the contract of an employee. This must be done in a fair way.

There are different types of dismissal:[3]

  1. Fair dismissal- Based on the reason and the process of dismissal
  2. Unfair dismissal- Based on the reason and the process of dismissal
  3. Constructive dismissal- This is when a serious breach of

contract has been carried out and therefore the employee must resign in response to the employer’s conduct.

  1. Wrongful dismissal- This is where you break the terms of an employee’s contract in the dismissal process, e.g. dismissing someone without giving them proper notice.

If the employer dismisses you from 6 April 2009 onwards, they should follow the procedures which are laid out in the Acas Code of Practice on disciplinary and grievance procedures.

The procedure should have the following steps:[4]

  1. Letter- The employer should send you a formal letter explaining the situation.
  2. Meeting- The letter should be followed by a meeting to discuss everything face to face.
  3. Verdict- The employer should then write to you expressing their final decision.
  4. Appeal- You then have the right to appeal against your employer’s decision

For Conduct or Performance Reasons

An employer may dismiss you if you are unable to complete the job to the required standard or you have the capability to complete to a high standard but for some reason or another you are unable to.

There is no specific process by law an employer must follow in order to dismiss an individual however it must be carried out fairly.

Misconduct includes persistent lateness or unauthorised absence. It is based on serious misconduct or gross misconduct. Serious misconduct includes poor performance for which the employee should be provided with a formal warning which states that not improving could lead to dismissal. Gross misconduct includes theft, physical violence, serious insubordination and gross negligence for which the employee may be dismissed immediately.[5]

Due to Illness

An employee maybe dismissed due to medical reasons. The employer must pay for the employee whilst dismissed for a period not exceeding 20 weeks. The employer may wish to provide the employee with alternative work for the period of time, which is suited to your medical needs.[6]


Redundancy is when you dismiss an employee because you no longer need anyone to do their job.[7]

Liquidation and Administration

Both company Liquidation and Administration can lead to the end of the company. Company administration intention is to help the company repay its debts and avoid insolvency. Liquidation is when the company is forced to sell all of its assets before the company vanishes as a whole. This will result in the employees being made redundant.[8] You’ll normally be entitled to statutory redundancy pay if you’re an employee and you’ve been working for your current employer for 2 years or more.

You’ll get:[9]

  1. Half a week's pay for each full year you were under 22
  2. One week’s pay for each full year you were 22 or older, but under 41
  3. One and half week’s pay for each full year you were 41 or older

Length of service is capped at 20 years and weekly pay is capped at £475. The maximum amount of statutory redundancy pay is £14,250.


A resignation can be carried out verbally or in writing, it is a clear statement of you are leaving the job.

Forced Resignation

If you are being dismissed, a company will often offer you a compromise or settlement agreement whereby they will pay you a certain amount of money in return for which you forego the opportunity to bring any claims against them.[10]

Where the employer's action breached a fundamental term of your contract and you resigned in direct response soon afterwards then this may be constructive unfair dismissal and you will be entitled to bring a claim for compensation.[11]


The period of a person's life during which he/she is no longer working, or the commencement of that period.[12]

Why do people retire?

There are various reasons why someone retires such as health issues - the employee may not be able to work or be medically fit to work due to ill health. Another reason is the nature of work for example employees whose jobs are physically demanding might retire earlier than others. Employees may have personal demands such as caring for someone and therefore retire earlier to fulfil responsibilities outside of work. Another key reason is community interests, employees may want more time for volunteer work, sports, hobbies, family and travel.[13]

See also


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