Notice Not Worked

An employer and an employee usually have to tell one another in advance when they intend the employment should end. 

When an employee resigns, they may have to give written notice via a letter (or email) to their employer. Although award and agreement free employees don’t have to give notice when they resign, generally the employee’s employment contract, if not the applicable award or registered agreement, will set out the amount of notice an employee has to give when the employee resigns. The notice period:

• starts the day after the employee gives notice that they want to end their employment

• ends on the last day of employment

Generally, the employee will work the notice period. However, sometimes the employer will not require the employee to work the notice period, in which case the employer and employee may agree that the employer will pay out the notice period instead. If the employee does not work the notice period when the employment ends, this is notice-not-worked. You can use the roster tool in BrightHR to set the notice period just by dragging and dropping.

An employee’s award, employment contract, enterprise agreement or other registered agreement sets out:

• How much notice (if any) the employee has to give when they resign

• When an employer can withhold money if the employee does not give the minimum notice period

Taking money out of an employee’s pay before it is paid to them is called a deduction.

An employer can only deduct money if:

• The employee agrees in writing and it’s principally for their benefit

• It’s allowed by a law, a court order, or by the Fair Work Commission, or 

• It’s allowed under the employee’s award, or

• It’s allowed under the employee’s registered agreement and the employee agrees to it.

Many Awards say that in certain circumstances an employer can deduct up to one week’s wages from an employee’s pay if they do not provide the minimum amount of notice. Where an award allows this, an employer can only deduct pay from an employee’s wages under the award, not from other entitlements.

Even if the deduction is made in accordance with an award, registered agreement or contract, an employer can’t deduct if:

• It benefits the employer, not the employee, and the deduction would be unreasonable in the circumstances, or

• The employee is under 18 years of age and their parent or guardian hasn’t agreed in writing.

When the employer terminates the employee, the employer often does not require the employee to work the notice period, but the employee is still entitled to be paid for that period. In this case, the employer pays the employee in lieu as if they had worked the notice period. Besides other obligations, when terminating an employee’s employment, an employer is required to give the employee written notice of their last day of work. How far in advance they need to do this will depend on how long the employee has been employed for.

The National Employment Standards (NES) set out the minimum notice periods (see below).

How Much Notice Should Employees Give Employers of Resignation?

Under the National Employment Standards (NES) employees are not required to give notice of their employment ending. Typically, a full-time or part-time employees’ award, registered agreement, or employment contract will set out how much notice (if any) an employee has to give when they resign. But this depends on the contract, award or agreement terms and type of employment. For safekeeping, you can create individual employee profiles and folders and upload these documents to store securely in the cloud with BrightHR.

A casual employee is not required to give notice upon resignation. Likewise, the employer does not have to give a casual employee notice when terminating their employment either due its ad hoc nature, though you should tell the employee why you are ending their employment, and there will be a requirement to consult with the employee prior to terminating them under the applicable award or registered agreement.

Once you receive notice of resignation from an employee, you can either:

• Let the employee work out the notice period;

• Have the employee finish up early and pay them in lieu of notice; or

• A combination of both, where an employee works a portion of their notice and the employer pays the rest of the notice period out.

If you pay out any part of the notice period, you have to pay the employee the exact same amount they would have received if they worked it.

Notice of Termination to Employee

When you end an employee’s employment in most cases you have to give the employee the minimum notice period in writing, or pay in lieu of notice. You do not have to give notice to casuals, seasonal workers, fixed-term workers on the expiry of the contract term, daily hire workers in the building construction or meat industries, or employee’s fired for serious misconduct.

The amount of notice you have to give depends on the employee’s number of years of continuous service within the business. Below are the minimum notice periods for each period of continuous service:

• One year or less: one week

• Between one-three years: two weeks

• Between three-five years: three weeks

• More than five years: four weeks

Employees over 45 years of age with at least two years of continuous service are entitled to an extra week of notice of termination.

When you terminate an employee’s employment, you must give the employee an employment termination letter. The letter should clearly state the reason for the termination, the date of the employee’s last day of work, and the fixed amount of entitlements and unpaid wages the employee will receive.

Final Payment Notice

When an employee’s employment ends you have to provide a final payment notice – in writing – which sets out the wages and entitlements due to the employee. It is your responsibility to ensure the last pay slip is delivered on time and correctly calculated.

To calculate an employee’s final pay, refer to the applicable modern award, registered agreement or employment contract to find out what entitlements you owe. While each contract is unique, you will most likely need to calculate one or more of the following entitlements:

• Unpaid wages (including penalty and overtime rates)

• Expense claims

• Accrued annual leave entitlements

• Payments in lieu of notice

• Allowances

Trying to make all of these calculations can be tricky. Fortunately, BrightHR can help you keep track of your employee entitlements and generate reports with leave, wage and time data that you can store securely in the cloud.

Check the terms of the employee’s Modern Award, registered Agreement or employment contract to find out the final pay due date. If none of the documents say so, you can process the final pay on their next scheduled pay day within seven days of their employment ending.

Last Days of Employment

In the lead up to a person’s end of employment, they should have the chance to tie up any loose ends in the workplace. Here is a quick checklist of things the departing employee should do before they go:

• Complete any pending projects

• Clean up their desk

• Clear unimportant emails

• Do an exit interview if desired

If the departing employee is to be replaced, the new employee should get all the support and training they need to comfortably take over the role, possibly as part of a handover from the departing employee. Makes sure you keep the exiting employee’s wage and time records for seven years; store them securely in the cloud with BrightHR. Employsure can help you understand notice which is not worked, call us for free initial advice on 1300 651 415.