When an employee resigns, they need to give their employer the minimum notice period, which may come from their industrial instrument, such as an award, enterprise agreement or other registered agreement, or their employment contract.
Sometimes an employee may decide to give their employer more notice than the minimum period required by their industrial instrument or their employment contract.
Once the employee has given their notice, they keep working until the end of the notice period, when their employment ends.
Ending the notice period early
If an employer does not want an employee to work through their resignation notice period, there are a number of options that may be available. These include:
- Paying out the resignation notice period
- Coming to an agreement with the employee to stop working
- Seeking independent advice about other options
- Ending the employee’s employment.
Industrial instruments and employment contracts can contain terms that allow an employer to pay out a resignation notice period.
An employer should check the terms of the relevant industrial instrument or employment contract to see whether they can pay out the notice period. They will need to pay out the whole period of notice given by the employee.
The employer and employee could agree that the employee will stop working and be paid for the resignation notice period.
An employer could seek independent advice about other options, for example, whether they might be able to:
- direct an employee to take leave with pay (often referred to as ‘gardening leave’) for the rest of the resignation notice period
- pay out an employee’s notice of resignation period instead of allowing the employee to work out the notice period.
An employer can choose to end an employee’s employment, and provide them with the full period of notice or pay in lieu of notice.
Before ending an employee’s employment, an employer should consider all of their obligations for ending employment.
An employer should also be aware that an employee may be able to make an unfair dismissal application to the Fair Work Commission. An employee can also apply to the Commission if they’ve been dismissed on the basis of:
- a breach of general protections, or
- unlawful termination.
Example: Ending the notice period early
Joe has worked for his employer, Steve, for 4 years when he decides to resign. Joe's award says he needs to give, Steve, 3 weeks' notice, which he does.
Joe has worked 1 week of his resignation notice period, when Steve decides that he doesn't need Joe to work the rest of his resignation notice period.
Steve seeks Joe’s agreement to be paid out the remainder of the resignation notice period, but Joe doesn't agree.
Steve then tells Joe that he is ending Joe's employment and that he would like Joe to finish work immediately.
Joe's award and the National Employment Standards say that from the date Steve ends Joe's employment, Steve has to pay Joe 3 weeks' pay in lieu of notice. Steve still has to pay Joe for the week he worked during his resignation notice period.