When does a resignation take effect?

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When does a resignation take effect?

Does a resignation apply from the time an employee gives notice, even if it is outside work hours?

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Does a resignation apply from the time an employee gives notice, even if it is outside work hours?

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Q One of our employees verbally resigned after hours at a work social function and followed up with an email. When does the resignation apply – on the day the verbal resignation was given, even though it was outside business hours, or on the following business day?

A It is usual to disregard the day on which notice is given or, what amounts to the same thing, the day on which the termination occurs in calculating the period of notice. See Construction, Forestry, Mining and Energy Union & Anor. v Curragh Queensland Mining Ltd [1998] 1231 FCA.

However, if notice is given prior to the employee’s normal starting time, that day could count as part of the notice period. A ''week” means a calendar week – that is, any consecutive seven days and does not mean “working week” (five days). Likewise, where a contract of employment requires a month’s notice of termination by either party, a ‘month’ does not mean four weeks unless otherwise specified by the applicable modern award or enterprise agreement, statute or contract of employment.

The Acts Interpretation Act 1901 [Cth] (s.22(1)) defines a “month” to mean a “calendar month” which is then further defined as a period commencing at the beginning of a day of one of the 12 months of the year and ending immediately before the beginning of the corresponding day of the next month or, if there is no such corresponding day, ending at the expiration of the next month.

Usual practice is to disregard the day on which the notice was given and commence the notice period from the next day, unless notice was given prior to a shift commencing or very early in the shift. However when an employee resigns, the simplest response is to ask them what their final day will be.

Form of resignation

The method by which an employee gives notice of resignation can create uncertainty for an employer. If the words of a resignation are unambiguous then an employer is entitled to treat them as such. However, words may be said by the employee “in the heat of the moment”, which industrial tribunals refer to as ‘special circumstances’.

Where special circumstances arise it may be unreasonable for an employer to assume a resignation and accept it forthwith. A reasonable period of time should be allowed to lapse: if circumstances arise during that period which put an employer on notice that further enquiry is desirable to see whether the resignation was really intended and can be properly be assumed, then such inquiry is ignored at an employer’s risk.

An employer runs the risk that evidence may be forthcoming which indicates that in the ‘special circumstances’ the intention to resign was not the correct interpretation when the facts are judged objectively. See Canh K Ngo v Link Printing Pty Ltd (1999) 94 IR 375; Bernadette Minato v Palmer Corporation Limited [1995] IRCA 316.

Notice of termination by employer

The Fair Work Act (s117) requires an employer to give an employee notice of termination, in writing. Failure to do so may be in breach of the Act, but may not necessarily mean a termination of employment has not been effected.

Generally, a termination of employment is considered not to take effect unless and until it is properly communicated to the other party. This could include notice being given verbally (although this would not satisfy the Fair Work Act where verbal notice is given by an employer).

The Acts Interpretation Act 1901 [Cth] (sections 28A & 29) provides how notice may be given. In particular, notice may be given to an employee by:
  • delivering it personally
  • leaving it at an employee’s last known address; or
  • sending it by pre-paid post to an employee’s last known address.
An employer should request an employee’s resignation in writing so as to avoid any misunderstanding, although this may difficult to obtain in some circumstances.

The bottom line: If an employee gives notice of resignation after commencing work, then that day is disregarded for the purposes of determining the period of notice. The same principle applies when the employer gives notice of termination to an employee.
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