Employee notice periods, the rules for resigning and being dismissed

An employee who resigns on the spot, or simply stops coming to work, leaves you with unfinished handovers, unreturned property and a gap in the roster. Notice periods exist to give both sides a runway: time for the departing employee to hand over work and for you to find a replacement. But the obligations are not the same in both directions. This article explains how notice works when employment ends, who must give it, how much, and what you can actually do when an employee leaves without warning.

The two directions of the notice rule

The first thing to understand is that Australian law treats the two sides of the notice equation differently. The minimum notice an employer must give is set out in statute. The notice an employee must give is almost entirely a matter of what their award, enterprise agreement or contract says.

The relevant players are straightforward:

• The employer: must give written notice of the day of termination, or pay in lieu, under the National Employment Standards (NES) in the Fair Work Act 2009 (Cth).
• The employee: owes notice only if an award, enterprise agreement or employment contract requires it. The Act expressly allows awards and agreements to include employee notice terms, but it does not impose one itself.

That asymmetry drives everything else in this article. If you are surprised that an employee resigned with no notice at all, the reason is usually that nothing in their award or contract required notice in the first place.

The employer's minimum notice, in numbers

When an employer ends the employment of a permanent employee, s 117 of the Fair Work Act 2009 (Cth) sets the floor. The minimum notice period is based on the employee's continuous service:

Three details matter in practice. First, an employee over 45 who has completed at least two years of continuous service gets an extra week on top of the table. Second, the notice must be in writing and must state the day of termination, and the notice period runs from the day after the notice is given. Third, periods of casual employment do not count towards continuous service for this purpose.

Instead of letting the employee work out the notice, you can terminate immediately and pay in lieu. The payment must be the full amount the employee would have earned at their full rate of pay for the hours they would have worked across the notice period. The Fair Work Ombudsman makes clear this includes loadings, allowances, penalty rates and other separately identifiable amounts, not just base salary.

A contract, award or enterprise agreement can require a longer notice period than the NES, but it cannot provide for less. The NES floor applies regardless of what the paperwork says.

What an employee must give when resigning

Here is the part most employers find galling. The Fair Work Act 2009 (Cth) imposes no statutory notice obligation on an employee who resigns. Section 117 binds employers only, and s 118 merely permits awards and agreements to require employee notice. The Fair Work Ombudsman's resignation guidance is consistent: notice for a resigning employee comes from the award, enterprise agreement or contract, not from the NES.

The practical picture depends on which instrument covers the employee:

• Award-covered employees: most modern awards require employees to give notice on a service-based scale similar to the employer's table above, usually without the age-based extra week that applies to employers.
• Agreement or contract: an enterprise agreement or a well-drafted employment contract can specify a notice period for resignations, and the employee is then contractually obliged to serve it.
• Casual employees: do not have to give notice at all when resigning.
• Award and agreement-free employees: do not have to give notice either, unless their contract requires it. Where the contract is silent or there is no written contract, the employee may still owe reasonable notice at common law, which depends on the seniority of the role, pay and industry practice.

Two further points. A resignation does not have to be in writing; an employee can resign verbally, and you cannot refuse to accept a genuine resignation. And if you want certainty, the answer is not in the Act, it is in the paperwork. A clause in the contract that says exactly how much notice a resigning employee must give is what converts a courtesy into an obligation.

Can you hold back pay when an employee skips notice?

The short answer is: only if an award or enterprise agreement says you can. There is no general statutory right to dock an employee's final pay because they failed to give notice.

The Fair Work Act 2009 (Cth) restricts deductions from wages. Section 324 permits a deduction only where it is authorised in writing by the employee and principally for their benefit, authorised under an enterprise agreement, authorised by a modern award, or required by law. A withholding for failed notice does not fit the first category, so it needs a source in an award or agreement.

This is where awards actually help you. The Fair Work Ombudsman's guidance on withholding final pay notes that most modern awards contain a clause allowing the employer to withhold up to one week's wages when an employee aged 18 or over resigns without giving the notice the award requires, provided the deduction is not unreasonable. That deduction can only come out of wages payable under the award, not out of accrued leave or other entitlements.

Whatever the position on withholding, final pay itself is non-negotiable. An employee who resigns, even one who never returns, is entitled to be paid for time worked plus a payout of accrued untaken annual leave under s 90 of the Fair Work Act 2009 (Cth). Getting the final pay calculation wrong, or withholding leave entitlements to punish a no-show resignation, is a breach of the NES that can itself become the basis of a claim against you.

When notice is never required

The notice rules in the NES do not apply to every termination. Under s 123 of the Fair Work Act 2009 (Cth), the employer's notice obligation drops away entirely for:

• employees employed for a specified period of time, a specified task, or a specified season;
• employees dismissed because of serious misconduct;
• casual employees; and
• certain employees under training arrangements.

Serious misconduct is the category that attracts the most attention. The Fair Work Ombudsman gives the everyday examples: theft, fraud, assault or sexual harassment, conduct that causes serious and imminent risk to another person's health, conduct that jeopardises the profitability of the business, or refusing to follow a lawful and reasonable instruction that is part of the job. Where the conduct genuinely meets that bar, you can dismiss without notice and without payment in lieu.

The caution is that the label does not do the work. If you dismiss for serious misconduct and the conduct does not actually meet the threshold, or you skip a fair process, the dismissal can be challenged as unfair. An employee generally needs six months of service to bring an unfair dismissal claim, or 12 months if you are a small business employer, but once they have it, a botched misconduct dismissal can end in reinstatement or compensation. Terminating without notice is only safe where the misconduct is genuinely serious and properly documented.

The employee who never comes back

When an employee resigns and then simply never returns, you still have obligations. The resignation takes effect when it is given, you cannot reject it, and the employment ends on the stated day even if the employee does not show up. Final pay, including accrued annual leave, is still due, and it is best practice to pay it on the next scheduled pay cycle.

If an employee stops attending work without resigning at all, you are looking at abandonment. The Fair Work Ombudsman describes abandonment as an employee who does not come to work for an unreasonable length of time, without a reasonable excuse, and without speaking to the employer about the absence. Modern awards no longer contain abandonment clauses, so you cannot simply declare the employment over on the strength of a silent week. The safe sequence is to attempt contact in writing, give the employee a genuine opportunity to explain, and only then treat the conduct as a resignation or dismissal with the paperwork to show why.

In either scenario, a written confirmation helps. Send a letter acknowledging the resignation and the final day, ask for company property and confidential information to be returned, and remind the employee of any ongoing obligations such as confidentiality clauses and restraint of trade that survive the end of employment.

Gardening leave: paying an employee to stay away

There is a middle path between working out the notice and paying it out, and it is called gardening leave. Under this arrangement the employee remains employed and paid for the notice period but is not required to attend work or perform their normal duties. The employee stays on the payroll, stays bound by their employment obligations, and cannot take up work with a competitor during the period.

Gardening leave is a creature of the contract, not of the NES. It is most common for senior employees who have access to clients, confidential information or trade secrets, where letting them work out the notice inside the business is the real risk. For it to be available, the contract usually needs to give the employer the right to direct the employee not to attend work during the notice period, or you need the employee's agreement. If the contract is silent, an employer cannot unilaterally park a willing employee at home and expect the same result.

Where a lawyer earns their keep

The notice scheme looks simple until the facts get awkward, and that is where legal advice pays for itself:

• deciding whether particular conduct really is serious misconduct, or whether terminating without notice exposes you to an unfair dismissal claim;
• reading the award correctly to work out whether a deduction for failed notice is actually authorised, and from which amounts;
• drafting the employment contract so that resignations require proper notice, gardening leave is available, and post-employment restraints are enforceable;
• handling a suspected abandonment without creating a dismissal that can be challenged; and
• checking that final pay is calculated correctly, including annual leave and long service leave, so a frustrating no-show resignation does not turn into a claim against you.

A lawyer can also review your standard contract and your award coverage before the problem arises, which is considerably cheaper than defending a claim afterwards.

The asymmetry is the real risk

The single point that matters most from this article is the asymmetry at the heart of the scheme. Your obligation to give notice is statutory, written into the Fair Work Act 2009 (Cth), and cannot be waived by a contract that says less. An employee's obligation to give notice is only as strong as the paper it is written on. If nothing in the award, agreement or contract requires notice, the employee can resign today and there is generally nothing you can do about it beyond whatever the award allows you to withhold. The costly mistake is to assume you can dock pay, skip final entitlements, or treat a silent absence as abandonment, and then discover the law disagrees.

That is also the good news. The fix is within your control: a properly drafted contract that states the notice an employee must give, an understanding of the award clauses you can rely on when they do not give it, and a termination process that is fair on paper as well as in practice. If you are facing a resignation without notice, a disputed final pay, or a termination you are not sure is defensible, an employment lawyer can walk you through what the law actually allows before you make a decision that costs more than the paperwork would have.