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Is there a difference between a resignation and a mutual separation agreement?

by , 15 January 2014
We're only a couple of days into 2014, but resignations are already the order of the day. On Sunday, Alviro Petersen resigned as captain of the Lions franchise. This high profile resignation has cast the spotlight on resignations. Read on to find out the difference between a resignation and a mutual separation agreement.

There's a difference between a resignation and a mutual separation agreement.

The difference is quite simple.

  • Resignation is when an employee ends his working relationship with you.
  • A mutual separation agreement is when both you and your employee agree to end the employment relationship.

For the purposes of this article, we'll focus on resignations.

What you NEED to know about resignations

A resignation is different from a mutual separation agreement as we've explained. It's also different from when you dismiss an employee for any reason relating to:

  • The employee's conduct or capacity; or
  • Your operational requirements (retrenchments).

But if an employee agrees to a voluntary severance package, he can resign after he's accepted it.

For example, let's say Lights and Fittings offers voluntary severance packages to its marketing team. Hilary negotiates and accepts a voluntary severance package and then resigns.

This means her employment will have ended because she's resigned and not because of retrenchment.

The Labour Law for Managers Loose Leaf Service says sometimes circumstances come up where you and your employee are incompatible, and the working relationship's not working out.

Instead of taking formal steps to discipline your employee, or deal with the incompatibility through performance management, youcan agree to separate, and enter into an agreement to part ways, or your employee can simply resign.

Remember, there are two requirements to confirm a resignation.

Two requirements to confirm a resignation

To be valid and effective, a resignation must:

  • Either be in words or shown in conduct;
  • Show a clear, unconditional and unambiguous intention not to carry on with the employment contract.

Knowing the difference between a resignation and a mutual separation agreement will help ensure you deal with both effectively.

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