• Employment
  • September 02, 2021

How to Protect Your Business When an Employee Leaves

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By Lawbite Team

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As a business owner, protecting your business will be one of your top priorities. Whenever an employee leaves, there are factors you need to think about to ensure your business is protected. This might include securing data that the employee had access to and taking back any company devices.

Letting employees leave without first protecting your business could expose the firm to a range of problems. A survey published by Biscom in late 2015 found that 87% of employees who leave a job take with them data that they created in that job and 27% take data that others had created. 

This blog will outline the ways in which you can protect your business when an employee leaves, understanding data management policies and the risks of not taking measures to protect your business. It will also discuss the importance of conducting an exit interview at the time the employee leaves the company.

What can you do to protect your business when an employee leaves?

There are various ways you can protect your business for when an employee leaves. You can use this checklist of things to cover upon an employee exit to make sure you are protecting your business: 

  • Including a notice period in the contract so the employee knows how much notice they should give to leave and whether they will be working the full notice period. If both employee and employer agree, the employment can be terminated before the end of the notice period. This may include a payment (also known as a settlement agreement)
  • Notifying HM Revenue and Customs when an employee leaves the business so the PAYE (Pay as you Earn) records are updated
  • Changing passwords of any sensitive logins that the employee had access to. This is made easier if the business uses cloud computing, as it allows you to quickly change the password so an employee who leaves cannot access the system 
  • Collecting any work devices back from the employee such as a work computer or phone 
  • Deactivating that employee’s account for the company so they can’t access any databases after they have left 
  • Ensuring the employee is paid any outstanding pay and issue them a P45 slip, although this is usually produced electronically now, once you inform HMRC
  • Conducting an employee exit medical or health check such as a vision screening, hearing test or a general health assessment. These are paid for by the business and help ensure the health and wellbeing of employees after leaving your company. Crucially, by being able to obtain data on the employee’s health as they are leaving the company, exit health checks also help make sure your business is protected if the employee attempts to raise an insurance claim against the business


How to protect Company Data from Employees

There may be risks associated with not protecting your business when an employee leaves and not taking into account the importance of protecting your business by implementing the relevant procedures when an employee leaves. These risks might include:

  • Putting confidential company information at risk if the employee has access to it
  • Losing further employees who may be persuaded to leave by the departing employees
  • Employees may still have contact or dealings with customers or clients of the business or maybe suppliers 

To protect your data when an employee leaves, you can follow the checklist above to make sure you have covered the key points. It is also important to conduct an exit interview.

Organising an exit interview for the employee allows you to both have a chance to explain why they have chosen to leave the company or perhaps have been dismissed. Any issues can be resolved before the employee leaves to prevent any issues after employment has ended. At the interview the employer should remind the employee of the restrictions which will apply after they have left the company such as data protection and what will happen if there are any violations.

What is an Exit Interview?

Exit interviews are an important way to gather information from the employee about their experience at the company and identify where improvements can be made.

Exit interviews can help protect company data when an employee leaves as it gives the employer the chance to relay any obligations the departing employee has such as intellectual property agreements. They can also remind the employee of their duties once they leave their role regarding any sensitive company data. This will help the business protect data when the employee leaves.

Conducting an exit interview is not only a way to help data protection but it also can be beneficial as it gives the opportunity for both employee and employer to provide feedback to each other, understand the reason for dismissal/departure and generally leave on a positive note. 

How does the Data Protection Act affect employees?

The Data Protection Act (2018) aims to prevent people and organisations from both holding and using inaccurate information on individuals. The data protection act applies to any information that organisations keep about their staff, customers and account holders. This includes any information regarding elements of business operations, staff records and marketing. 

When an employee leaves a company they must understand what will happen with any data that the company has about them once they leave, including what they should do with any data they have from or about the company or clients of the organisation.

What is a Data Management Policy?

Data management policies focus on the management and governance of data assets. In a data management policy violation, the policies which govern the management of data assets may be involved in a breach so the data is exposed to an unauthorised third party. The protection of a data management policy is essential to making sure the business is protected when an employee leaves the company.  

It is vital that both the employer and the employee are fully aware of the data management policy in place and what will happen if it is violated. 

A business has a legal responsibility to protect confidential data of both clients and employees. And vice versa, the employee also has a responsibility to keep client data confidential which includes reaching out to clients that they may have previously worked with at another company within a specific time frame.

To ensure your business is covering everything with regards to data protection when an employee leaves, you can follow this checklist:

  • Implement a company procedure for when an employee leaves to ensure data protection policy is being followed. This may cover the threat of damage to data which could be caused by not having security procedures in place for when an employee leaves the company 
  • To protect against the departing employee becoming an ‘insider threat’, make sure their logins, company email address and access rights are deactivated upon their exit. This ensures they can no longer access any sensitive company data and put the business at risk 
  • Have a procedure or document in place to keep track of all company devices such as a phone or computer which your business gives out to employees, ensuring you know which employee has which device. When they leave you can take back their device to prevent access to sensitive information 
  • Change passwords regularly for company logins that are used by multiple employees
  • Collecting any company keys or pass cards when the employee leaves, such as fobs that would grant them access into the office
  • Reminding employees (perhaps during the exit interview) of their responsibility to not take company data with them when they leave. The Data Protection Act 2018 outlines that employees can face legal consequences if they have retained information from their previous employment

FAQs

LawBite has put together an FAQs section for the questions which are most often asked in regards to how to protect your business when an employee leaves.

  • Do I need to add a notice period into the contract?

As a business owner, you should be aware of the notice period in the employee’s contract so you know as an employer or employee how long the notice period needs to be or whether it exists at all. If this wasn’t added to the contract at the time of employment, then the employee can hand in the resignation and leave on the same day without warning. 

This can leave the company in a difficult situation therefore it is vital to have this written up and added to the contract at the time of employment. The contract of employment should also outline the obligations of the employee for when they leave to prevent any breach of these obligations. 

  • What actions can be taken if an employee leaves without submitting a notice of resignation?

If an employee leaves without submitting a notice of resignation this may be a breach of contract and thus might be subject to a court claim made against them by the employer. They also would only get paid for the time they did work if they leave before the notice period is up. 

  • What do you need to do when an employee leaves?

When an employee leaves you should make sure you are doing the following as an employer: issuing a final payslip and paying any outstanding pay, notifying HM Revenue and Customs and giving the employee a P45 Slip, holding an exit interview with the employee and ensuring any company property that the employee has is returned.


You can get legal assistance from LawBite 

As an employer, it is important to know how to protect your business when an employee leaves, the ways in which you can go about this and the risks of not protecting your business. 

LawBite’s mission is to democratise how SMEs get the expert law they need - easier to access, clearer to understand and much more affordable. We connect you with the best lawyers to give you top-class legal advice. If you were enquiring about how to protect your business when an employee leaves, we hope this article has been helpful in outlining the steps you can take to make sure your business is protected. 

If you have any further questions about legal issues in social media marketing and how LawBite can help, you can make an enquiry with us and receive a free 15-minute consultation with one of our expert lawyers.

In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.



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