This is what happened in a July High Court Case of Sunrise Brokers LLP v Rodgers. Mr Rodgers was a key employee who had set up an inter-dealer brokerage in precious metals. He was so integral that he had signed an employment contract confirming he had to give 12 months notice, which could not be triggered until after a 3 year initial period.
Mr Rodgers was offered a job by a competitor and told Sunrise that he wanted to leave with immediate effect. Despite protestations, he walked out never to return. He was about 2.5 years into the contract.
Sunrise sued. The High Court held that Sunrise could choose whether or not to accept Mr Rodger’s resignation, which was in breach of contract. They were entitled to choose to affirm the contract instead as they had a good reason for doing so – namely that they wanted to stop him going to a competitor.
As Sunrise had not accepted the resignation, the Court found that Mr Rodgers’ had remained an employee, despite leaving. This continued to be the case, even though Sunrise had stopped paying Mr Rodgers, as he had stopped attending work. The court reinforced the view that willingness to work and wages are interdependent.
Sunrise were able to get an injunction forcing Mr Rodgers to adhere to his contract on all but the terms requiring him to actually perform work. This was crucial as it stopped him from working for a competitor for the notice period and re-enforced his subsequent restrictive covenants.
Tactics are of utmost importance in cases such as this. Arguably, Sunrise could have accepted the repudiatory breach by casual words following the resignation, or by sending Mr Rodgers his P45 once he failed to attend work. A less strategic employer might have simply dismissed Mr Rodgers once he went absent without leave.
So remember:
While a normal resignation does not have to be accepted in order to be effective, a purported resignation without due notice requires acceptance before it is effective. This is the same irrespective of the length of notice.
You could use this to your advantage in insisting that staff members work out their notice period or if you also want to prevent them working elsewhere in competition during that period.
This is a tricky area so do seek our help if this situation arises, especially where you have continuing business interests to protect.
Verity Slater is a partner in Stephens Scown’s employment team, based in Truro. She works in partnership with businesses to improve their HR practices and advise on employment issues. Verity can be contacted on 01872 265100 or employment@stephens-scown.co.uk