May 2024 – Rosemary Saad & Helen Freidman

Part 3

In Parts 1 and 2 of our three-part article series, we looked at the ways an employee’s contract of employment can be brought to an end and the circumstances which may render such termination lawful or unlawful.

In this third article, we will review the requirements associated with giving notice and making final payments to employees, focussing in particular on:

1. which employees are entitled to receive notice from the employer;

2. what is required of resigning employees in terms of the notice period;

3. must employees provide written notice of their resignation;

4. what is required to be paid to the employee in lieu of notice or at the end of the notice period.

Which employees are entitled to receive notice from their employer?

Not all workers are entitled to be given notice of termination of their employment. The following categories of workers are generally not entitled to notice:

  1. seasonal workers and daily and weekly hire workers;
  2. casual employees;
  3. most employees on fixed-term contracts;
  4. employees dismissed for serious misconduct.

For full and part-time employees who are entitled to receive notice and who are not subject to a written agreement providing for notice, the minimum period typically depends on the employee’s length of service as follows:

  • 1 year or less: 1 week
  • 1 – 3 years: 2 weeks
  • 3 – 5 years: 3 weeks
  • More than 5 years: 4 weeks

However, longer notice periods may be required by employment contracts, awards, enterprise agreements or other agreements and may also depend on the employee’s age.

An employer may allow an employee to either work out their notice period (during which time the unfair dismissal regime continues to be available to the employee) or, pay the employee in lieu for the full notice period or, give a combination of the two.

If an employer pays an employee in lieu of notice the employment ends on the date of the payment. This means the employee does not continue to accrue entitlements such as annual leave after this time.

What is required of resigning employees in terms of the notice period?

Casual employees typically do not need to provide notice when resigning, but exceptions may apply if you have a contract or are covered by an enterprise agreement.

Permanent part-time and full-time employees are generally required to give their employer notice, the period of which will be based on the employment agreement, award, or enterprise agreement and will begin to run from the day after the notice is given.

If an employee’s contract specifies an unusually long notice period they may wish to seek legal advice.

Must employees provide written notice of their resignation?

The method for providing notice is often specified in the employment contract, award or enterprise agreement. These may require written or verbal notice. Some workplaces may have specific policies outlining notice procedures.

What is required to be paid to the employee at the end of the employment contract?

When an employee works out their notice the final pay is generally made within 7 days of the last day of this notice period, subject to specific award and agreement terms.

The final pay may include the following components, as applicable:

  1. outstanding wages or salary owed;
  2. payment in lieu of notice of termination;
  3. accumulated annual and long service leave payments;
  4. redundancy pay if relevant (see Part 2 of our three article series dealing with redundancy issues).

For further advice on notice periods, employee entitlements, terminations, or any other employment-related matter please call Harris Freidman Lawyers on 02 9231 2466.