Termination or Resignation?
Jul 7, 2023
Loren Allison, Attorney

What is the difference? In order to make legal difference, it’s imperative that an employee voluntarily resign.

An employee who is told that unless he resigns he will be discharged, has not voluntarily resigned. If the resignation is involuntary, the former employee has precisely the same legal recourse he would have had if he had been formally discharged by the employer.

There are, nonetheless, some significant advantages where an employee resigns, albeit involuntarily. The primary advantage rests with the fact that the employee may not know that it makes no difference that he was forced to resign, as opposed to being discharged. Many employees believe, as many employers do, that by resigning they forego any legal recourse against their former employer. In short, though no legal protection is afforded by a resignation as opposed to a discharge, the practical effects may be the same.

Also, by permitting an employee to resign, the employee is left with his self-respect, which in many cases will do much to appease the employee and make him far less likely to take retaliatory legal action. Finally, by permitting an employee to resign, prospective employers can be told the employee resigned, thus enhancing the ex-employee’s chances for securing new employment. It’s recommended that the employee be expressly told at the time of resignation that should prospective employers contact the former employer, the prospective employer will be told that the employee voluntarily resigned.

It may also be advisable to discuss the question of unemployment compensation benefits at the time resignation/discharge is being discussed. An employee may be induced to resign if the employer makes it clear that unemployment benefits will not be contested. By not contesting unemployment benefits, the employee may be induced to forego any additional legal proceedings. 

Loren Allison

Phone: (260) 466-5205


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