Mandatory period for notice on resignation?

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Mandatory period for notice on resignation?

Employers are sometimes confronted by employees who resign and provide little or minimal notice. Is there a legal prescription requiring a period of notice of termination from an employee?

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Employers are sometimes confronted by employees who resign and provide little or minimal notice when the employer wishes the employee to work out a reasonable period of notice to enable the employer to find a replacement employee. Is there a legal prescription requiring a period of notice of termination from an employee?

This question was recently sent to WorkplaceInfo.

Q  Our employees are given a letter offer, on commencing employment, which states that one month’s notice is required to be given by the employee when terminating their employment.

One of our staff has given notice of resignation but she has only given us one week’s notice.

She claims this is all that’s required under the Fair Work Act 2009.

Our reading of the Act appears to be that the obligation of a minimum period of notice of termination applies only to the employer, not to the employee.

The employee is covered under the Clerks — Private Sector Award 2010.

What is the mandatory period of notice required to be given by the employee in this circumstance?

A  The statutory period of notice of termination provision in the Act only applies to the employer.

Award provides notice period

In this scenario, the period of notice required to be given by an employee to the employer is subject to the provisions under the Clerks — Private Sector Award 2010.

Clause 13.2 of that Award provides that the employee is required to provide the same period of notice of termination as is required by the employer under the National Employment Standards (NES).

The amount of notice of termination required to be given by the employee is based on the years of continuous service with the employer. This means the employee is required to give the following notice, based on years of continuous service with the employer:
  • one week’s notice — less than one year’s continuous service
  • two weeks notice — at least one year but less than 3 years continuous service
  • three weeks notice — at least 3 years but less than 5 years continuous service
  • four weeks notice — 5 years continuous service or more.
There is no additional one week’s notice if the employee is aged over 45 years.

Period of employment

In this case, if the employee has been employed for less than one year, one week’s notice is the period of notice required under the Award to be given by the employee.

However, if the employee’s service with the company is greater than one year, the Award allows the employer to deduct the balance (in this case up to 3 weeks pay for 5 years service or more) from all monies due on termination, including the payment of any accrued annual leave — but see note below.

Note: Forfeiture of annual leave
 
The standard termination clause in modern awards usually provides that where an employee fails to give the required period of notice, an employer can deduct the difference between the required notice and the notice actually given by the employee from monies due on termination.
 
There is conjecture that this breaches s90(2) of the Fair Work Act, which requires the employee to be paid accrued annual leave upon termination of employment. The NES overrides any provision in a modern award or enterprise agreement where there is an inconsistency. A formal ruling on the interaction of this section of the Act and enterprise agreements (underpinned by modern awards) is the subject of a matter currently before the Federal Court. The outcome of this ruling will be reported on WorkplaceInfo.
 
Source: Paul Munro, IR Consultant.
 
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