What happens if your employee resigns one day and never comes back to work?
They may say, “I’m outta here,” never to return, completely disregarding their obligation to give you a period of notice before they leave.
This can be frustrating. The whole point of an employee giving notice is that it allows you some time to find someone else to take their place without undue disruption to your business.
Can you force the employee to come back to work for their notice period? Is there anything else you can do?
Every employment agreement requires that the parties give each other notice to end the relationship.
Employers can only give that notice to terminate if they have good reasons for doing so and if they follow a fair process.
But employees can leave whenever they like, for any reason. (Binding employees in any other way might be tantamount to slavery!)
Yet employees are obliged to give notice too. Even if the employment agreement is silent on what notice they must give, they must still give reasonable notice.
IT’S A BREACH OF CONTRACT NOT TO GIVE NOTICE
If the employee doesn’t give notice to end their employment, they will be in breach of their employment agreement.
Several things follow from that breach:
- You don’t have to pay them for the period of notice.
- You can sue them for loss suffered as a result of the breach.
- You can seek a penalty for the breach.
No payment for period of notice
First of all, if your employee fails to turn up to work, you don’t have to pay them for it. So any notice period that they should have worked, but didn’t, will be unpaid.
Suing for loss
In most cases, you are unlikely to suffer loss if your employee leaves without giving you notice.
You may have to get someone in temporarily to cover for their absence, but so long as you pay that person the same as what you would have paid the departed employee – then you haven’t suffered any financial loss.
Admittedly, you may lose time in dealing with the matter, but that is not often recoverable.
You might incur losses, however, if for example:
- You have to pay someone else more than what you paid the departed employee for the same work. For example, you may get in a contractor who charges you a higher hourly rate than what you pay your regular waged staff.
- You have to pay urgent recruitment fees that are higher than typical fees that you would have paid anyway to recruit someone else.
- You have to close your business temporarily because of the employee’s absence without prior warning. For example, if you own a retail store and were counting on that employee to open the store and man it during opening hours, and it’s too late to arrange cover, you might miss out on any sales that you would have otherwise received, since the store remains closed.
In those cases, you can bring a claim in the Employment Relations Authority to sue the employee for the loss you have suffered, as a result of that departing employee breaching their contract by failing to give their required notice.
Suing for a penalty
Penalties are available for breaches of contract. Up to $10,000 can be awarded against individuals who disregard their contractual terms.
Again, you can seek such a penalty by going to the Authority. But beware, the penalty is by default paid to the Crown, like other fines. The Authority does have a discretion to order that some or all of the penalty be paid to you, but it is not a given.
Not having your employees keep to the terms of their employment agreement on leaving is not just a pain. It can have very real consequences for your business.
Employees who do this often think there will be no consequences to their actions other than missing out on the pay they would otherwise get during their notice period.
And if they have found alternative employment elsewhere straight away, for more pay, they may not care that you are not going to be paying them any further.
But if you suffer losses as a result of the employee not giving the required notice, you can take action in the Employment Relations Authority to recover those losses and to seek a penalty.