Resignation

Are employees required to give notice when resigning?

We’ve previously written about what you think to consider when deciding to dismiss an employee.

But what about when employees terminate their own employment? 

According to the Department of Jobs and Small Businesses, employee resignations are on the rise. Over the last 12 months alone, approximately 9% of Australia’s labour force are working for a new employer. We’ve seen the effects of this Great Resignation, induced by the COVID-19 pandemic, firsthand and it shows no signs of stopping yet. Whilst there may be times when an employee handing in their resignation can be a wonderful thing, other times – especially when there’s an increased frequency of it – a sudden abandonment of employment can leave employers ‘in the lurch’ without enough staff on hand or rudderless functions in your business operations.

To assist you in avoiding this, we’ve put together this summary of the rules around employee resignation notice periods.

IN THIS ARTICLE

WHO MUST GIVE NOTICE?

Only employees who are permanently employed are required to give notice of resignation. This includes either full-time or part-time. Casual employees are not required to give notice of resignation (it’s one of the key things that distinguishes a casual employee from a permanent one) although it is of course always helpful if they do.

If a casual employee is not turning up to work or has advised you they are resigning, download our guide on  ‘How to understand casual employee entitlements and loadings’ to learn more about how to manage this.

If you aren’t sure whether you employee is ‘permanently employed’, check out our post on defining casual employees. You can also use the different types of employment and the relevant entitlements and obligations.

WHAT IS THE EMPLOYEE RESIGNATION NOTICE PERIOD?

There is no hard and fast rule for how much notice an employee is required to give when they want to end their employment. However, there are a few things that may dictate how much notice (if any) an employee is required to provide on resignation. These include the details found in any applicable modern award, a registered agreement, an industrial agreement, and/or the employment contract.

Minimum Notice Period as set out by the Modern Awards:

The modern awards set out minimum notice periods based on the employees ‘continuous service with the employer’:

Period of continuous service  Minimum Notice Period
1 year or less 1 Week
More than 1 year – 3 years 2 Weeks
More than 3 years – 5 years 3 Weeks
More than 5 years 4 Weeks

For a detailed look at the Fair Work Ombudsman’s ‘notice period’ calculator based on modern awards standards visit here.

Note that whilst an employment contract/other registered agreement may extend the notice period, it cannot be less than the minimum notice period requirement set out by the relevant award that covers your employee.

If your employee is ‘award and agreement’ free and there is no written contract or explicit mention of a resignation notice period written into their employment contract, they may still be required to give reasonable notice to their employers. To avoid uncertainties and confusion about this and, in particular, what constitutes ‘reasonable notice’, we recommend businesses incorporate notice periods explicitly within employment contracts, enterprise agreements and/or other registered agreements.

The employment notice period generally starts the day an employee tells their employer that they are resigning. Note that employees are not required to provide notice in writing, unless explicitly mentioned in their employment contracts/other agreement.

WHAT IF AN EMPLOYEE DOES NOT MEET MINIMUM NOTICE PERIOD REQUIREMENTS OR WORK THE EMPLOYEE RESIGNATION NOTICE PERIOD?

Failure of employees to provide required notice:

While employers cannot ‘reject’ or ‘approve’ employee resignations, if an employee fails to meet minimum notice periods – as set out by the modern award/enterprise agreement/employment contract or other registered agreement – an employer may be able to withhold or deduct wages from the employee’s final pay. However, this can only be done in certain circumstances and if the award or registration doesn’t allow a deduction of pay even when minimum notice isn’t given, the employer will have to pay all the employee’s entitlements still.

If the award/agreement does allow for a deduction of payment in lieu of notice not given, remember that employers can only deduct from wages – other entitlements such as accrued leave or award payments must still be paid in full.

Failure of employees to work the resignation notice period:

Where an employee notifies an employer that they intend to resign and then subsequently fails to show up for work during their notice period, the employer may be entitled to withhold payment of the amount they would ordinarily earn for the notice period.

Conversely, if the employer notifies the employee that they are not needed for their employee resignation notice period, the employer must still pay the employee the amount they would ordinarily earn for the notice period in lieu. |

It is also worth noting that, where an employee works only part of their notice period, then is told by the employer that they are not needed for the remainder of the employee resignation notice period, the employer is required to pay the employee for the full notice period plus the time they worked during such notice period.

To avoid the headache of poor performance during the notice period, it is best practice to write into employment contracts the proper protocol when it comes to resignation, including designated notice lengths. However, whilst there are many benefits to having employees work during their notice period such as an opportunity to close out projects or for proper handover, it’s not always desirable – especially if an employee is leaving to join a competitor or they are so disengaged or dissatisfied with their role they will do more harm than good. With this in mind, employers should be smart when it comes to determining notice lengths in a contract and ideally give themselves some flexibility to waive notice periods. Determine the length of notice periods based on the seniority of the role and the time it may take to fill the position, and of course – being open and transparent with your team about what needs to happen when somebody leaves will help set your expectations for staff and avoid the headaches of an unexpected and/or undesirable resignation. 

CONCLUSION

Having an employee resign, particularly on short notice, can be an unpleasant and costly workplace relations issue. There are many pitfalls an employer may face when they are not experienced in dealing with such matters. In dealing with an employee’s accrued entitlements after a resignation, there is no prescriptive formula that can be followed for every employee. It makes this area especially problematic to say the least!

NEED SPECIALIST HELP?

At Workplace Wizards, we can help guide you through the process of employee resignation so that it is as smooth as possible, minimising legal risks as we go.

We encourage you to get in touch with us if you’re experiencing difficulties with employee resignations. We can send you our FREE ‘How To Guide’ on navigating ‘Employee Abandonment and Resignation’ and discuss how to be implement our resource pack which includes all the letters and tools you’ll need in the next instance of employee resignation!

Lastly, we offer specialist assistance during these challenging times, tailored to the specific needs of your business. Be sure to contact us at Workplace Wizards support@workplacewizards.com.au or 03 9087 6949

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