Deemed resignation: Overview, definition, and example
What is deemed resignation?
Deemed resignation refers to a situation where an employee or a director is considered to have resigned from their position, even if they have not formally submitted a resignation letter. This can occur due to specific circumstances outlined in a contract or company policy. For example, if an employee fails to report to work for a certain period without notification or fails to comply with the terms of their employment, their actions might be interpreted as voluntary resignation. Deemed resignation allows the employer to treat the employment relationship as terminated without the need for formal resignation documentation.
Why is deemed resignation important?
Deemed resignation is important because it helps protect businesses from having to go through lengthy or complicated termination processes when an employee or director effectively ends their role by their actions. It provides clarity and allows the organization to move forward in cases where the individual’s conduct suggests they no longer wish to continue their duties. For both employers and employees, understanding the circumstances under which resignation can be deemed helps set clear expectations about behavior and job responsibilities.
Understanding deemed resignation through an example
For example, an employee who is absent from work for an extended period without informing their employer and without a valid reason could be deemed to have resigned. If the company's policy states that an absence of more than 30 consecutive days without communication is considered a resignation, the employer might treat the employee as having voluntarily resigned, even though no formal resignation letter was provided.
Another example could be a director of a company who fails to attend board meetings for an extended period, despite being asked to do so. If the company’s governing documents state that non-attendance for a set number of meetings is considered a deemed resignation, the director might be considered to have resigned, even without formally submitting a resignation notice.
An example of a deemed resignation clause
Here’s how a deemed resignation clause might appear in a contract:
“If the Employee is absent from work without authorization for a period exceeding [X] consecutive days, without notifying the Company, the Employee shall be deemed to have resigned from their position, effective from the last day of their absence.”
Conclusion
Deemed resignation is a useful provision for employers to manage situations where an employee or director effectively resigns through their actions, such as prolonged absence or failure to perform their duties, without formally submitting a resignation. It provides clarity and helps streamline the termination process, allowing companies to maintain operations without unnecessary delays. By including deemed resignation clauses in contracts, businesses can protect themselves and ensure clear expectations are set for their employees or directors.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.