Resignation and notice

The notice periods that apply to termination of employment by the employer, based on length of service, do not apply to resignations. This article focuses on HR procedures to ensure that a resignation proceeds smoothly.

This article is based on writings by Paul Munro, IR consultant. It has been updated and revised.
 
Notice period
 
The notice periods that apply to termination of employment by the employer, based on length of service, do not apply to resignations.
 
Payment
 
As with other forms of termination, payment of wages/salary and other entitlements must be made up until the employee’s final day of work, but note the 'pay in lieu of notice' provisions.
 
What if the employee changes his/her mind?
 
Neither an employer nor an employee is obligated to accept a withdrawal of notice by the other party. Again, however, it is crucial to make the situation clear at the time notice is originally received. Also, withdrawal of notice generally needs to occur soon afterwards if it is to have any chance of succeeding.
 
Employers' obligations
 
While the Fair Work Act requires the employer to give a particular period of notice of termination of employment dependant on the number of years of continuous service with the employer, the FWAct does not place any legal obligation on the employee to provide the same period of notice.
 
The amount of notice to be given by the employee is subject to the provisions of the applicable industrial instrument or the individual's contract of employment. Most modern awards require the employee to provide the same period of notice as that required of the employer under the FWAct, except there is usually no requirement on the employee to give additional notice based on the employee’s age.
 
Proper notice by employee
 
To avoid any misunderstanding an employer should request an employee's resignation in writing, although this can sometimes be difficult to obtain from the employee. There is nothing to prevent the employer from accepting the verbal resignation of the employee, including over the telephone, however, the employer should seek confirmation preferably in writing from the employee or, in the latter case, some way of verifying the caller on the telephone by asking particular identification details known only to the employee.
 
Where verbal notice is given by the employee at the workplace it may be prudent for the employer to have a witness to the resignation. The employer's request for an employee's resignation in writing is to avoid any 'heat of the moment' resignations.
 
It is important for the employer to establish who gave notice, otherwise there may be unfair dismissal implications (for employers with more than 15 employees), or the employer being required to pay additional monies because the employer was deemed to have terminated the employment, eg. payment of extended weeks' notice, possible payment of annual leave loading, possible entitlement to pro rata long service leave (depending on the relevant state/territory long service leave legislation).

The Federal Maigistrates Court has determined that a text message advising the employee of their dismissal (and consequently when given by an employee to the employer) is considered to be written notice. This could also apply to resignation via an email although written notice is still considered preferable.
 
Meaning of a period of notice
 
Most industrial instruments or contracts of employment refer to a period of notice in terms of a week or weeks, or in the case of a contract of employment, a month or more. Firstly, it is usual to disregard the day on which notice is given unless it is given prior to the employee's ordinary commencement time.
 
A 'week' means a calendar week, ie any consecutive seven days, not a 'working week' which is normally five days for full time employees. Where the notice required to be given is one month, a 'month' is defined as meaning the corresponding date of the following month. It does not mean four weeks unless otherwise prescribed.
 
Notice given when absent on leave
 
A common circumstance is an employee giving notice whilst absent on a period of leave, such as annual leave. It would appear this issue has not been determined specifically by industrial tribunals, however, the courts have indicated in other matters that an employee is entitled to give notice of termination to the employer at any time, with the remainder of the period of leave forming part of the notice period.
 
Failure of employee to give proper notice
 
If the employee fails to provide proper notice of termination to the employer, the latter may be allowed to deduct the equivalent period of notice from all monies due on termination of employment, although this is subject to the relevant provisions of the applicable industrial instrument. Applying suvh terms of a modern award or an enterprise agreement doers not breach the payment of annual leave on termination provisions of the FWAct.
 
Withdrawal of notice by employee
 
Notice, once given, cannot be withdrawn except by mutual agreement of both parties. The reason for this is if unilateral withdrawal of notice of termination was allowed, inconvenient results could ensue.
 
For example, the requirement for the employee to give notice to the employer is to allow sufficient time to fill the position. If the employee could withdraw notice at any time it could result in the replacement employee being left without a job, having already terminated their employment with their previous employer to accept the vacated position.
 
The same logic applies to the withdrawal of notice by the employer, where an employee who has accepted employment elsewhere could be bound by two concurrent contracts of employment if the employer was allowed to withdraw notice unilaterally.
 
Too much notice by employee
 
Sometimes an employee, in good faith, provides a longer period of notice than is required under his/her industrial instrument or his/her individual contract of employment. However, the employer is not bound to accept it. If the employer accepts the employee's resignation it would be wise to inform the employee at once what course it intends to follow.
 
For instance, the employer could inform the employee that it would only accept notice for the period prescribed by the applicable industrial instrument or contract of employment. The employer may wish to do this because of business sensitivities related to the employee's position, eg. sales representative (exposure to company's clients), chief executive officer (knowledge of company's future business strategies).
 
In instructing the employee to give the required notice under the applicable industrial instrument or contract of employment, the termination is still regarded as being by the employee because the employee had already indicated to the employer an intention to resign. An employee cannot withdraw the notice of termination once given, except with the employer's agreement.
 
Abandonment of employment
 
Abandonment usually arises in circumstances where an employee is absent without reasonable excuse for an unreasonable period of time without having communicated to the employer any reason for the absence. This can be a difficult situation for the employer to assess, particularly if the applicable industrial instrument does not specifically refer to the appropriate process the employer should adopt to determine whether an employee may have abandoned their employment.
 
It should be noted that an employee who is deemed to have abandoned their employment has terminated their employment without proper notice, usually from the date the employee last attended for work. Reference should be made to the applicable industrial instrument to check whether there is a specific provision dealing with abandonment of employment.
 
Leave during notice period
 
Any absence by the employee during a notice period does not extend the period of the notice unless otherwise provided by the applicable industrial instrument or contract of employment. For instance, an employee who is absent due to illness during a period of notice is entitled to paid personal leave (where there is sufficient credits) which would not extend the period of notice.
 
Likewise, a public holiday falling on a day the employee would ordinarily work would not extend the period of notice. An employer may receive an application for annual leave from an employee who has given notice.
 
While an employer cannot reasonably refuse to authorise an employee to take annual leave, it would be reasonable to expect the employer to deny leave because the employee is required to work out his/her appropriate period of notice.
 
However, annual leave which was already approved to be taken prior to the employee giving notice could only be withdrawn by mutual agreement.
 
Superannuation contributions
 
Payments in lieu of notice of termination are included in calculating an employer’s SG superannuation contributions into the employee’s superannuation fund. (SGR 2009/2)
 
 

WantToReadMore

Get unlimited access to all of our content.