An employee of mine decided to walk away from work today saying that
she did not like it, and quits. Under her contract she is supposed to
give one months notice before she goes, and she is well within the
time frame stipulated for this clause to be in effect. She owes the
company a few days holiday, and her pay cheque for last month has not
been paid as yet. What am I allowed to do with her pay?

I feel that as she has a contractual notice period of one month, which
she has chosen to give up, she owes us the pay that she would have
received in that month, i.e. We do not have to pay her for last
month's work as she has left without giving one months notice, thus
last months pay is cancelled out by next months notice. Is this
correct? If I have to pay her the full wages, what is the point of a
notice period if an employee can just walk off with no penalties
whatsoever?

If I have to pay her for the work done, and not deduct anything for
the notice period not served, should I only deduct the holiday days
taken but not earned yet from the pay and that?s it? If so, I think
it?s very unfair on the employer as I would have to give notice to
fire her, but she can walk out when ever she wants, and I can do
nothing about it! Is there anything I can do to remedy the situation?
She was in an important job, and has now left the firm in disarray as
she left so abruptly. The costs of finding a new staff member will be
high in both financial and time terms.

In your answer, please could you make a note of the section of law
that you are basing your decision on. I am not looking for a hugely
lengthy answer, but one that will decisively tell me my rights on
this, and what my action should be.   Please note that this question
is from the UK and the answer should be based on English Law.

Hi there!

This sort of thing must be intensely irritating for you.
Unfortunately, there's not much you can do. I'll handle your two
queries separately, but if you think there's something I've missed
then please request clarification and I'll come straight back to you.
Particularly, I've not been able to refer you to legal sources so much
as you would like, as English employment law is such a hotch-potch of
ancient common law and modern EU regulation. Please also note the
plentiful disclaimers about what this service is, and what it is not.
You should consult a solicitor before taking any of this on board.
Acas are also there to provide impartial legal advice to employers,
find them at http://www.acas.org.uk

No Notice

When your employee leaves without giving the notice due under her
contract, she is in breach of that contract. Legally, when someone
wrongfully terminates a contract they have with you, then that ends
all your obligations under that contract from that point on. When your
employee does work for you, that gives rise to an obligation to pay.
So you still have to pay her for the work she did prior to
termination, because your obligation to pay arose at that time.

Setting aside any possibility that you constructively dismissed her,
she is however in breach of contract. This means that she is liable
for damage that you suffer as a result of the breach. So long as you
can show that the damage arose as a result of her premature departure,
and the damage was reasonably foreseeable, you may be able to claim.
Practically, this could be the difference between her wages and a temp
that you have to hire at short notice to do her work, i.e. a couple of
pounds per hour. At the larger scale, projects that she was working on
going wrong and costing you money could be recoverable. Meanwhile, you
are expected to be doing everything reasonably necessary to reduce the
damage that you suffer. Unsurprisingly, these cases are rare. The
leading case which you could look at, should you be interested, is
Anglia Television Ltd v Reed [1972] 1 QB 60, [1971] 3 All ER 690. The
Reed in question is Oliver Reed, a notoriously unreliable man to
employ.

Annual leave

You're stuck here too. The position you describe was considered by the
Employment Appeal Tribunal, at this link:

- http://www.bailii.org/cgi-bin/markup.cgi?doc=/uk/cases/UKEAT/2002/1250_01_2003.html&query=

The most pertinent extract is here(ERA = Employment Rights Act 1996;
the 'regs' are the Working Time Regulations 1998):

"The appellant was entitled to and did receive wages for the 15 days?
holiday taken during her employment. Credit for the extra five days?
holiday pay will only arise where there is express provision made in a
relevant agreement. In those circumstances an exception is made under
s.13(1) ERA; the deduction of excess holiday pay from his/her final
wage entitlement is authorised by a relevant provision of the worker?s
contract and/or he has previously signified in writing his agreement
or consent (by the relevant agreement) to the making of the deduction.
Section 14(1) ERA is immaterial whether or not there is a relevant
agreement. There is no ?overpayment? of holiday pay. The worker is
entitled to paid holiday, up to 20 days per annum, under reg. 16(1).
It is only where there is a relevant agreement providing for credit to
be given to the employer for excess holiday taken that reg. 14(4)
permits the employer to recover the excess payment in accordance with
s.13(1) ERA."

You'll see that if you had entered into a 'relevant agreement' with
your employer you could recover the money. A solicitor could write one
of these for you.

I hope this answers your query, but please bear in mind that Google
Answers is no substitute for professional legal advice. Before taking
any action you should consult a solicitor or Acas.

Search strategy:

Own personal knowledge
Google search with keywords: liable damages employee resign 
Searches of BAILII - http://www.bailii.org
Subscription-based secondary legal sources

Many thanks, everything i needed to know.

My suggestion

(and I am not an Employment lawyer)

Calculate what you owe her up to and including her last day of work
(minus any vacation time which you considered not owed. Use judgement
and common sense on this one). Send her a Cheque and a letter
explaining how the amount was calculated. Also expalin that you are
not paying her for the rest of her notice period as she has agreed not
to work them. Do this as soon as possible (i.e Today) And of course
keep a record of this written communication.

Then leave it at that. If she feels hard done by she can always try and sue
you (Somehow I doubt she will)

DPRK007 

PS If you think she owes you money I would be inclined to forget it.
Just send her a letter confirming date of her resignation.

HI Nelson-ga,
That comment was not constructive (ignoring the unnecessary four letter word).
Perhaps the employee has an attractive job offer that insists that she
start on Sept. 1.  We just don't know.
Myoarin

I guess I should have said crap instead.  It's more genteel.

The questioner says the employee said she "did not like it".  No
mention of better offers.

Hi nelson-ga,

I also feel your comment was not constructive, and just to let you
know we pay above average wages, have a very generous holiday and
bonus scheme, and have been voted one of the top 100 small businesses
to work for. Therefore, I think your slavery remark is a little over
the top. Finally, contracts are not passé but an essential part of the
employer/employee relationship. Thanks for your input though.

This is why I love the Brits.  They thank you even when you insult them.

Seriously, except for unionized workers, employers in the U.S. are
generally not using contracts.  Many states have "at-will" employment,
where an employee can quit or be fired without notice.  (I remember
when watching Bridget Jones, I was surprised that Daniel threatened
the quiting Bridget over her contact stipulation.  I guess they are
still widespread in England.)

In the UK, the letter offering someone a job is the contract.  It
includes stuff like what the pay is and how many days holiday.  Any
sensible employer gets the employee to sign and return a copy. 
Doesn't that count as a contract in the States?

It may or may not include a notice period on either side, but market
practice is for some notice both ways, often a month.  This lets
employees have some protection from having their income cut off
immediately, as well as giving the employer time to find a
replacement.

Anyhow, my advice based on many years or being an employer is the same
as dprk's - she probably won't sue or even take you to an IT.  Also,
wait until you get a reference request. You both can and should
respond to it saying that she walked out on her contractual obligation
of giving you notice.

The CBI have just released a report where they say what a raw deal
employers get under the current system. You may find it interesting:

http://www.cbi.org.uk/ndbs/press.nsf/0363c1f07c6ca12a8025671c00381cc7/33f9830ed75f765b8025708800523621?OpenDocument

Apologies for long link.

jumpingjoe

The CBI is hardly an unbiased source of opinion when it comes to employment law!.

The reality is that in just about every country , the employer has ALL
the power unless the employee has a well specified legal contract (as
most if not all CEOs do) or are members of a union.

Companies now resort to arbitarily sacking employees by saying it is a 
"redundancy". In this way they do not have to justify the sacking.
They will offer the employee a specified amount of money hoping that
the employee will accept and also knowing that if the employee
threatens to go to a tribunal or to a lawyer then they may not supply
a reference for any future perspective employer.

I would also point out that the law in the UK is wholly unfair in
terms of discrimination in that someone who is made "redundant" has
not a legal leg to stand on if they claim it is due to age bias or
indeed sexual orientation.
However a woman who is pregnant has very strong recourse (including
re-instatement) if she is fired  (in the UK).

Regards

Mongolia