Resignation vs Dismissal
What's the difference between resigning and being dismissed? Understand your options, rights, and implications of each.
Last updated: 30 January 2025
Understanding the differences between resignation and dismissal helps you make informed decisions about how your employment ends.
Key Differences
Who Ends Employment?
| Resignation | Dismissal |
|---|---|
| Employee chooses to leave | Employer terminates employment |
| Employee gives notice | Employer gives notice |
| Employee's decision | Employer's decision |
Legal Implications
| Resignation | Dismissal |
|---|---|
| No unfair dismissal claim | May claim unfair dismissal |
| No wrongful dismissal claim | May claim wrongful dismissal |
| No redundancy pay | May receive redundancy pay |
| Full control of timing | Employer controls timing |
When Resignation Might Be Better
Advantages of Resigning
- Control: You decide when and how to leave
- Narrative: Can frame positively to future employers
- References: May result in better reference
- Dignity: Leave on your own terms
- Next job: Easier to explain in interviews
Situations Favouring Resignation
| Situation | Why Resign? |
|---|---|
| New job lined up | Smooth transition |
| Minor issue only | Don't want on record |
| Relationship breakdown | Exit gracefully |
| Personal reasons | Own choice |
When Dismissal Might Be Better
Advantages of Waiting
- Legal rights: Can claim unfair dismissal
- Redundancy: May receive redundancy pay
- Notice pay: Employer pays notice
- Negotiation: May get settlement package
- Benefits: May continue during notice
Situations Favouring Dismissal
| Situation | Why Wait? |
|---|---|
| Unfair treatment | Preserve legal claim |
| Redundancy likely | Get redundancy pay |
| Settlement possible | Negotiate exit |
| Long service | Significant entitlements |
Financial Considerations
If You Resign
| Entitlement | Receive? |
|---|---|
| Notice pay | Only if you work it |
| Redundancy pay | No |
| Settlement payment | Unlikely |
| Holiday pay | Yes (accrued) |
| Unfair dismissal compensation | No |
If You're Dismissed
| Entitlement | Receive? |
|---|---|
| Notice pay | Yes (unless gross misconduct) |
| Redundancy pay | Yes (if redundancy, 2+ years) |
| Settlement payment | Possibly |
| Holiday pay | Yes (accrued) |
| Unfair dismissal compensation | Possibly |
Impact on References
After Resignation
References may say:
- "Resigned"
- "Left voluntarily"
- Neutral or positive tone
After Dismissal
References may say:
- "Dismissed"
- "Employment terminated"
- Reason for dismissal
Which Is Better?
Depends on circumstances:
- Resignation usually looks better
- But dishonesty is worse
- Consider what references will actually say
Impact on Benefits
Unemployment Benefits (Universal Credit)
| Situation | Impact |
|---|---|
| Voluntary resignation | May face sanctions period |
| Dismissal for misconduct | May face sanctions period |
| Redundancy | No sanctions |
| Constructive dismissal | Treated as redundancy |
Other Benefits
- Private medical may end sooner if you resign
- Life insurance stops when employment ends
- Pension contributions stop
The Middle Ground: Negotiated Exit
Settlement Agreements
Often the best outcome:
- Negotiated departure
- Agreed reference
- Financial package
- Clean break
When Available
Employers may offer when:
- Want to avoid legal risk
- Need to reduce headcount
- Relationship has broken down
- Performance issues exist
Resigning During Disciplinary
Common Dilemma
If facing disciplinary action:
- Resign before dismissal?
- Wait for outcome?
- Try to negotiate?
Considerations
| Factor | Resign | Wait |
|---|---|---|
| Legal rights | Lose them | Preserve them |
| Record | "Resigned" | "Dismissed" |
| Reference | May be better | May say reason |
| Money | Notice only | Maybe settlement |
What Usually Happens
If you resign during disciplinary:
- Employer may accept resignation
- Process may continue anyway
- Record may note "resigned during disciplinary"
- Reference may mention circumstances
Constructive Dismissal
When Resignation Is Dismissal
If employer's conduct forces you to resign:
- Treated as dismissal
- Can claim unfair dismissal
- Must prove fundamental breach
- Must not delay too long
Requirements
To claim constructive dismissal:
- Employer fundamentally breached contract
- You resigned in response to breach
- You didn't wait too long (affirm contract)
Making the Decision
Questions to Ask
- What are my financial needs?
- Do I have another job?
- What will references say?
- Do I have legal claims?
- What are the circumstances?
- What can I negotiate?
Decision Framework
| Priority | Consider |
|---|---|
| Next job | Resignation may be easier to explain |
| Money | Dismissal may bring entitlements |
| Principle | Want unfair treatment challenged |
| Speed | Resignation is faster |
| Control | Resignation gives you control |
Practical Steps
If Considering Resignation
- Don't act in heat of moment
- Consider financial implications
- Check notice period requirements
- Think about references
- Get legal advice if complex
If Facing Dismissal
- Understand the process
- Engage with hearings
- Consider negotiation
- Preserve legal rights
- Get legal advice
Getting Advice
Consider consulting:
- ACAS (free advice)
- Employment lawyer
- Trade union (if member)
- Citizens Advice
Common Mistakes
Don't
| Mistake | Why It's a Problem |
|---|---|
| Resign in anger | May regret later |
| Assume resignation is best | May lose entitlements |
| Wait too long | May affirm breach |
| Lie about reason | Will be discovered |
| Ignore legal rights | Missing compensation |
Do
- Consider all options
- Get advice before deciding
- Document everything
- Negotiate where possible
- Make informed decision
Related answers
Constructive Dismissal: What Employers Need to Know
Understanding constructive dismissal claims. What triggers them, how to avoid them, and what to do if an employee resigns claiming breach of contract.
Unfair Dismissal UK: What Employers Need to Know
Unfair dismissal claims can cost employers tens of thousands. Learn the 5 fair reasons for dismissal, how to follow a fair procedure, and avoid tribunal claims.
Frequently Asked Questions
- Is it better to resign or be dismissed?
- It depends on your circumstances. Resignation gives you more control over timing and narrative, but you can't claim unfair dismissal. Being dismissed may give you legal claims but can affect references. Consider financial implications, future employment, and legal options.
- Can I claim unfair dismissal if I resign?
- Usually no, unless it's constructive dismissal - where your employer's conduct was so serious you were forced to resign. In that case, your resignation is treated as a dismissal and you may be able to claim.
- Should I resign if I'm about to be dismissed?
- Think carefully. Resigning may look better on your CV but you'll lose unfair dismissal rights (unless constructive dismissal applies). You may also affect any negotiated settlement. Get advice before deciding.