When an employee resigns

Resignations connected with a business transfer

If a business is acquired by another business by asset transfer as opposed to share purchase, in most cases the employees of the old business will automatically transfer to the new business on their existing terms and conditions.

However, an employee can't be transferred to a new employer against their will and may object to the transfer before it takes place. In this case, if they refuse to have their contract transferred to the new employer, the employee is regarded as having resigned with effect from the transfer date. As a result there is generally:

• no dismissal
• no right to redundancy pay
• no obligation for the new employer to take them on

A change in terms and conditions, however, following the transfer - provided the change is to a fundamental term of the contract - will entitle the employee to resign and claim unfair constructive dismissal. Such a dismissal will be treated as automatically unfair.

Subjects covered in this guide

• Introduction
• Check if the resignation is necessary
• Checklist: what to do when an employee resigns
• Finding out why people leave
• Resignations in the heat of the moment
• Resignations where the employee may claim constructive dismissal
• Resignations connected with a business transfer

 

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