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On and after last day of employment

The employee and employer both have tasks they need to complete at the end of an employee’s employment.

The employer recognises the employee’s service

This can be done with a gift, card, after-work shout, morning tea etc. Consider the usual workplace or industry practice and whether the employee is comfortable with a ‘do’ or wants to leave discretely.

Certificates/statements of service

Employers may be asked to provide a certificate/statement of service to the employee; this is a record of the start date and leaving date of the person’s employment. Employers should do this if they are asked. They can also choose to state the positions the employee had and their reason for leaving, for example, resignation in the certificate.

Starting-out wage rate employees

Employees who are being paid the starting-out minimum wage rate should always get a statement of service saying how long they’ve worked for the employer. This is so that the new employer will be able to work out the date that they need to be paid (at least) the adult minimum wage.

See Types for information on different types of minimum wage rates.

References

An employee may ask their employer to provide a reference for them. This can be verbal or written. An employer doesn’t have to provide a reference, but if they choose to, it must be true. If an employer stretches the truth with a reference, they may damage their organisation’s reputation and their own reputation.

The employer collects their company property

The employer should make sure that they collect all of their property from the employee before the end of their last day (or immediately after, for example, if the employee can’t return their uniform until the next day). This may include property such as:

  • computer and electronic equipment
  • mobile telephone. Sometimes an employer and employee agree that the employee is gifted or buy their company telephone or agree that the number is transferred to the employee. This should be done in writing
  • company files, manuals, forms, customer contact lists etc.
  • tools
  • uniform
  • credit and charge cards, taxi chits
  • identification card and building access (key and electronic); if there is passcode access, you may want to consider changing the code
  • vehicle.

IT systems

The employer will need to cancel direct and remote access to company email etc, and access to all other IT systems, for example, financial systems; and remove the employee from email distribution and contact lists. The employer should make sure that the employee sets up auto-forward and an out-of-office reply for emails and voicemail if this is appropriate.

The employer could do an exit interview

Employers don’t have to interview their employees when they leave, but this can give them valuable information.

An exit interview can be done before or after the employee leaves the organisation. Sometimes doing the interview after the employee has left will lead to more accurate answers as the employee has had time to reflect once they have some distance from the organisation. It may be difficult to get hold of employees who have left the workplace, so exit interviews are usually done before the employee leaves.

Doing an exit interview on all or a sample of employees who leave the organisation can help employers identify areas that they can work on to help retain staff or uncover problems with culture they were unaware of. Exit interviews shouldn’t usually be carried out by the employee’s immediate manager or supervisor as the employee may be reluctant to raise issues related to their management. You may collect more informative answers if the employee’s anonymity is protected.

The exit interview can ask questions on topics such as:

  • reason for leaving
  • relationship with supervisors and workmates
  • satisfaction with pay, training, career opportunities and performance appraisal systems
  • working conditions and culture
  • effectiveness of processes
  • workplace policies
  • tools and equipment
  • what they would do to improve things.

There is no point in doing exit interviews unless you intend to follow up on the information you get.

The employer calculates and pays the final pay

The employer will need to pay the employee their final pay. This can be done on their last day, or should be done as soon as possible and not later than the next scheduled payday.

Final pay has information about what to include in the employee's last pay.

Updating and storing personnel file

Once the employee has left, the employer will need to make sure that this is reflected in their records. The file should be updated with the amount of final pay including holiday pay etc. The employer can then archive the employee’s file.

Employers must keep wage and time records, and holidays and leave records that comply with the legislation for at least six years and, in particular, be able to show that they have complied with all minimum employment entitlements such as the minimum wage and annual holidays.

Employers must also retain wage deduction records, such as PAYE information (7 years), student loan deductions and superannuation contributions as required by law. However, except as mentioned below, the basic rule about the rest of the employee information is that once the employer no longer needs the information it should not be kept. Instead it would be best to securely destroy the information about six months after employment has ended.

Privacy at Work for Employers and Employees (external link) , pp 42-43, offers more information about privacy at work.

Relevance of employee information after employment

Other than wage and time records, holiday and leave records, and other information required to be kept by law (such as PAYE), employers may need to keep some information after employees cease employment. For example a small amount of information may need to be kept about their performance, if the employer has to give a reference. Only relevant information should be kept.

If the employer is in a dispute with an employee they need to keep all relevant information for as long as it takes to resolve the dispute.

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