When an employee resigns without notice it can cause significant disruption. Unfortunately, in many situations there isn’t much that can easily be done at the time of resignation. Making sure your employment contracts contain clear notice provisions and setting clear expectations at the start can help to avoid the issue.
The legal framework
Terms of resignation are typically governed by the National Employment Standards (NES), Awards, Enterprise Agreements, and employment contracts.
The NES does not require employees to give notice when they quit. Employees must only give notice if their contract requires it, or if they are covered by an Award or Enterprise Agreement containing employee notice requirements.
Steps to take
If an employee resigns without notice there are three steps that you should take.
Step 1: Check the employee notice requirements
The first step is to review the Award, Enterprise Agreement, and/or contract and determine:
- whether an employee is required to give notice;
- how much notice the employee is required to give; and
- if an Award or Enterprise Agreement applies – whether you can make a deduction from an employee’s pay if notice isn’t provided.
Step 2: Communicate with the employee
Attempt to discuss the matter with the employee to understand their reasons. If it’s appropriate, this is also a good opportunity to explore if it’s possible to negotiate a mutually agreeable solution.
Step 3: Pay the final pay
Even if you are considering action against an employee for leaving without notice, it is important not to delay the final pay. Courts are increasingly willing to impose penalties on employers who pay out entitlements late.
The final pay will usually include any wages for time worked since the last pay, together with a payout of accrued and unused annual leave and long service leave (if the employee is entitled to it). If an Award or Enterprise Agreement allows for it, an employer may be permitted to deduct an amount from the final pay for an employee’s failure to give notice.
Unless the employee is covered by an Award or Enterprise Agreement that says otherwise, payment for annual leave needs to be made on the last day of employment – this can be tricky to manage when an employee has left without notice.
A note on deductions
Deductions from an employee’s pay can only be made under certain conditions. If an Award or Enterprise Agreement doesn’t expressly allow for a deduction then you must pay all of the entitlements.
If the employee has a contract that allows for a deduction, you should get legal advice first, before making the deduction. Just because a contract permits a deduction doesn’t mean the deduction is lawful. An unlawful deduction is a breach of the Fair Work Act and could result in steep penalties.
Legal recourse
In cases where the resignation without notice breaches contractual requirements, employers may consider legal action:
- A court order for specific performance: In theory, a court can order an employee to fulfil their notice period. However, courts are generally reluctant to mandate the continuation of the employment relationship, so these orders are very rare.
- Compensation for loss: A court can order damages when an employee’s breach of contract has caused the employer to suffer loss. The employer needs to show that it has suffered actual loss or damage as a result of the employee not giving the required contractual notice period.
For example, if a client walks away because they didn’t have someone to smoothly take over the work – then the employer might have a good basis to seek damages. However, if the employee’s job can be filled by some else right away, or their duties distributed for a period, there might be no real loss to claim.
Preventative measures
To mitigate the impact of sudden resignations, employers can:
- clearly communicate notice requirements both in the employment contract and during the onboarding process.
- foster a positive work environment to reduce turnover.
- have contingency plans in place for key positions.
Please don’t hesitate to reach out to Emily Creak or Joe Mullavey, our experts in employment and safety law.
| Emily Creak Principal M: 0400 955 183 E: ecreak@pageseager.com.au |
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| Joe Mullavey Principal M: 0416 794 061 E: jmullavey@pageseager.com.au |
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Published: 25 June 2024
