When an employee resigns, it can feel like everything suddenly becomes urgent - rosters, client relationships, knowledge transfer, and hiring a replacement.
But before you jump straight into recruitment mode, it’s worth slowing down and making sure you respond to the resignation properly and handle the “exit” steps in a way that’s legally sound (and practical for your business).
In this guide, we’ll walk you through what accepting a resignation letter in New Zealand typically involves, what you should confirm in writing, and the key steps to manage notice, final pay, leave, handover, and risk.
Do You Need To “Accept” A Resignation Letter?
In most cases, a resignation is a unilateral decision - meaning the employee is telling you they are ending the employment relationship. It’s not usually something you can “reject” just because it’s inconvenient.
That said, you should still respond in writing. In practice, accepting a resignation letter usually means:
- acknowledging you’ve received the resignation;
- confirming the employee’s notice period and last day of work;
- confirming what happens during the notice period (handover, leave, workplace access, etc); and
- confirming key finalisation items (final pay, return of property, confidentiality obligations).
This written response reduces misunderstandings and helps you show you acted reasonably and transparently - which matters under the Employment Relations Act 2000 and the general duty of good faith in employment relationships.
When A Resignation Might Not Be Straightforward
There are a few situations where you should get advice before you respond, because acknowledging and actioning a resignation without care can create risk:
- Heat-of-the-moment resignations (for example, resigning during an argument). You may need to confirm whether the resignation is genuinely intended and voluntary.
- Medical or mental health issues where capacity is in question - you’ll want to proceed carefully and fairly.
- Employee alleges bullying, harassment, or unlawful conduct and resigns. This can become a personal grievance risk if mishandled.
- Fixed-term employment or unusual notice provisions in the agreement.
If you’re unsure, it’s often better to acknowledge receipt and say you’ll confirm details shortly, rather than firing off a quick acceptance email that you later regret.
What Your Written Response Should Include (A Practical Checklist)
A clear written response is the backbone of properly accepting a resignation letter. It doesn’t need to be overly legalistic - it just needs to be accurate and consistent with the employee’s contract and your workplace policies.
Here’s what we usually recommend including:
1) Confirm The Notice Period And Last Day
Start by confirming the key date:
- the date you received the resignation;
- the required notice period under the employee’s Employment Contract (or, if not clear, what you both agree); and
- the employee’s final day of employment (and final day actually worked, if different).
If the employee hasn’t given the correct notice, you can propose a solution (for example, an agreed earlier finish date), but be careful about making threats or “penalties”. Any deduction from wages is tightly controlled in NZ and generally needs to be specifically permitted (for example, by law or with the employee’s proper written authorisation).
2) Set Expectations For The Notice Period
This is where you protect your business operationally. You can outline:
- handover requirements and deadlines;
- how rosters will work until the final date;
- whether the employee should train someone up, document procedures, or transfer passwords; and
- who they report to for sign-off.
If you want to change duties during notice (for example, moving them off key clients), do it reasonably and consistently with the contract and role. Sudden demotions or punitive changes can create risk.
3) Confirm Return Of Company Property And Access
Make it clear what needs to be returned (and when), such as:
- keys, swipe cards, uniforms;
- laptop, phone, tools, vehicle;
- customer lists or physical files; and
- any security passes.
You can also outline what happens to logins and systems access. From a practical perspective, it’s smart to plan an orderly shut-off process at or before the final day (especially for admin access).
4) Remind Them Of Ongoing Obligations
Your response is a good place to politely remind the employee that obligations don’t necessarily end on their last day, including:
- confidentiality;
- return of information;
- non-solicitation / restraint clauses (if applicable); and
- intellectual property obligations.
If you rely on post-employment restraints, it’s worth checking they’re correctly drafted and enforceable. A Non-Compete Agreement or restraint clause that’s too broad can be difficult to enforce.
Managing Notice Period, Garden Leave, And Payment In Lieu
Once you’ve confirmed the resignation details, the next big question is usually: do we want them to work out their notice?
There’s no one-size-fits-all answer - it depends on your operational needs, the employee’s role, and any risk to your business (for example, client relationships, confidential information, or workplace conflict).
Working Out Notice (The “Default” Approach)
In many small businesses, having the employee work their notice is the most practical option because it allows for:
- an orderly handover;
- time to recruit or redistribute workload;
- continuity for customers; and
- less disruption to the team.
Just make sure you manage performance and conduct fairly during notice - don’t assume standards can drop because they’re leaving.
Garden Leave
“Garden leave” is where the employee remains employed (and paid) during their notice period, but you instruct them not to attend work or perform duties.
Whether you can do this will depend on the employment agreement and the circumstances. If there’s no garden leave clause (or clear contractual basis), you’ll often need the employee’s agreement to stay on the safe side. For example, if the employee is in a sensitive sales role with client relationships, garden leave may protect your goodwill - but you still need to act in good faith and reasonably, and avoid steps that could be seen as punitive.
Payment In Lieu Of Notice
Sometimes you want the employee to leave immediately (or sooner than the notice period) and pay them instead of having them work.
This should be handled carefully and ideally aligned with the employment agreement, because the right to do it often depends on what the contract says (and, if it doesn’t, a clear written agreement about the earlier end date and what will be paid). If you’re considering this, it’s worth reading about Payment in Lieu of Notice and getting advice for your specific situation.
In practice, an agreed approach (confirmed in writing) is usually safest - especially if you’re changing the employee’s end date.
Final Pay, Leave, And Other Exit Entitlements
Final pay is a common source of disputes, not because anyone intends to do the wrong thing, but because the calculations can be surprisingly tricky.
As an employer, you’ll generally want to confirm (in writing) how final pay will be calculated and when it will be paid.
What Final Pay Usually Includes
Final pay often includes:
- wages/salary up to the final day worked;
- any outstanding reimbursable expenses (if your policy allows);
- annual holiday pay entitlements (depending on what’s accrued and what’s been taken); and
- public holiday entitlements if they fall in the relevant period (this can get technical).
Leave entitlements are governed by the Holidays Act 2003, and getting this wrong can create liability (including backpay exposure). Because “holiday pay” and relevant daily pay/average daily pay calculations can be nuanced (and sometimes fact-specific), it’s worth double-checking with your payroll provider, reviewing any MBIE guidance, and getting legal advice if you’re uncertain.
Annual Leave During Notice
Employers often ask: “Can we make them take annual leave during the notice period?”
The answer depends on timing, the contract, and whether you can meet statutory requirements for directing annual leave (including any required notice). This is an area where a quick decision can backfire, so it’s worth understanding the rules around annual leave before you try to use it as a tool to manage the final weeks.
Time Off In Lieu (TOIL) And Overtime
If your business offers time off in lieu or has overtime arrangements, make sure you check whether:
- TOIL has been accrued;
- it needs to be taken before the final date; or
- it should be paid out (and how that’s calculated).
It’s much easier to resolve this while the employee is still engaged and willing to cooperate, rather than after they’ve left. If TOIL is part of your workplace practices, be clear on how Time Off in Lieu works in your business.
Casual Or Variable Hours Employees
If the resigning worker is casual or has variable hours, leave and final pay can be even more confusing. Make sure you check what they’re entitled to in your circumstances, including whether they receive holiday pay on top of wages rather than accruing annual leave. The rules are often misunderstood, so it’s worth reviewing Casual Workers’ Leave Entitlements if it’s relevant to your team.
Protecting Your Business: Handover, Clients, Data, And Workplace Risk
Resignations aren’t just an admin task - they’re a business risk moment. You’re often dealing with:
- customer relationships;
- confidential information;
- internal know-how;
- team morale; and
- access to systems and data.
The best approach is to run a consistent, repeatable offboarding process so you’re protected from day one (and every day after).
Plan A Proper Handover (And Document It)
Put a simple handover plan in writing. For example:
- a list of open projects and next steps;
- key client contacts and status updates;
- where files are stored (and any missing documentation); and
- what recurring tasks need to continue after they leave.
If the role is senior, you might also want a final “handover meeting” and written sign-off that key materials have been transferred.
Customer Communications
Small businesses often rely heavily on relationships, so a resignation can create uncertainty for clients. Decide:
- who will take over accounts;
- what you’ll tell customers (and when); and
- whether the employee is allowed to say goodbye directly.
A calm and consistent message protects your brand and reduces the risk of clients “following” the employee to a competitor.
Handle Employee Data Carefully
If you’re collecting or storing information during the exit process (exit interview notes, performance issues, complaint details), remember that employee information is still personal information and must be handled carefully under the Privacy Act 2020.
This is where having clear internal guidance helps - many businesses document their approach in an Employee Privacy Handbook so managers don’t accidentally overshare or store sensitive information incorrectly.
Think About Health And Safety During The Transition
Resignations often create staffing gaps and workload pressure. From a practical (and legal) perspective, check whether you’re unintentionally creating fatigue risks or unsafe work because others are picking up extra shifts.
Your duties under the Health and Safety at Work Act 2015 don’t pause just because you’re short-staffed - so it’s worth doing a quick risk check and documenting your plan to keep things safe while you recruit.
Key Takeaways
- Accepting a resignation letter usually means acknowledging the resignation in writing and clearly confirming the notice period, last day, and what happens during the notice period.
- Even though you generally can’t “refuse” a resignation, you should manage the exit carefully - especially if it’s a heated resignation, linked to a complaint, or involves a sensitive role.
- Use your written response to set expectations around handover, return of property, system access, and ongoing obligations like confidentiality and restraints.
- Decide early whether the employee will work out notice, go on garden leave, or receive payment in lieu - and make sure your approach aligns with the employment agreement (or is otherwise clearly agreed in writing).
- Final pay and leave calculations can be complex under the Holidays Act 2003, particularly for casual or variable-hours workers, so it’s worth checking entitlements carefully.
- Resignations are a key risk moment for client relationships, confidential information, and workplace morale - a consistent offboarding process helps protect your business.
If you’d like help responding to a resignation, managing notice and exit terms, or tightening up your employment documents to protect your business, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
