Employee Resignation and Notice Period.

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Resignation is the termination of employment initiated by the employee. That is, the employee voluntarily decides to end their employment and clearly communicates that decision to the employer.

When an employee resigns, they may have to give written notice via a letter to their employer. The notice period:

  • starts when the employee gives notice in writing via email or a letter that they want to end their employment
  • ends on the last day of employment

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

    • how much notice (if any) they have to give when they resign
    • when an employer can withhold money if they do not give the minimum notice period

How Much Notice Is Required When Resigning?

An employee can give more notice than what is outlined in the award, registered agreement or contract. An employer does not have to accept this and can choose to only let the employee work for the minimum notice period. When the employee resigns, the employer should tell the employee if they accept the full requested notice period or if they only want them to work the minimum notice period under their award, registered agreement or contract.

Can an Employee Take Leave During Period of Notice?

An employee can take annual leave during a notice period if the employer agrees to the leave. However, the employee can only take personal or sick leave during a notice period if they give:

  • notice of the leave as soon as possible
  • evidence if the employer asks for it (eg medical certificate)

An employer cannot force an employee to take leave as part of the notice period.

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Who Do Notice Periods Apply To?

Notice periods do not apply to employees who:

  • are casual
  • are employed for a specific period of time or task (eg a fixed term contract)
  • do seasonal work
  • are fired because of serious misconduct (eg engaging in theft, fraud or assault)
  • have a training arrangement and are employed for a set period of time, or for the length of the training arrangement (other than an apprentice)
  • are daily hire employees working in the building and construction, or meat industry
  • are weekly hire employees working in connection with the meat industry and whose termination depends on seasonal factors.

How Is Final Payment Calculated?

Final pay is what an employer owes an employee when their employment ends. An award, employment contract, enterprise agreement or other registered agreements can specify when final pay must be paid. If it does not, the best practice is for an employee to be paid on their last day of work or on the next scheduled pay day.

An employee should get the following entitlements in their final payment:

  • all outstanding wages for hours worked, including penalty rates and allowances
  • any accumulated annual leave
  • if it applies:

Sick and carer’s leave is not paid out when employment ends.

The Resignation Process

When an employee resigns, there are many things you need to do. Often, you will need that employee to finish up some of their work, and hand work over, or train their replacement.

On or before the employee’s final date of employment, you can request the employee to:

  • return all property of the business (including keys, documents, information technology equipment, intellectual property)
  • return or be reimbursed with outstanding petty cash
  • remove hard copy and electronic personal and confidential files
  • inform supervisor/s of any passwords/codes to access computer files

Updating the Employee’s Employment Records

The employee’s resignation letter should be stored in the employee’s personnel file, with this file remaining private and confidential. Generally, no one can access them other than the employee, their employer, and relevant payroll staff. If requested by the employee, or the former employee to whom the record relates or the Fair Work Ombudsman, employers must make copies of these records available.

Contact Employsure today on 1300 207 182 to learn more about resignation policies, entitlements and the calculating correct final payments.

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