What is a Notice Period?

What is a Notice Period ?

A resignation is a considerable event for both Employee and Employer. For Employees and HR managers, urgent action will need to be taken to secure a substitute or alternative arrangement to pick up the exiting Employees workload. They will also need to act quickly to make sure all Intellectual Property is secure. So how can we help monitor this and give us sufficient time to do what we need to do?

Enter notice periods.

Notice periods provide a protection for the Employer so that they have adequate time to complete these important processes. For Employees, they provide a period of time to transition out of their role and safety of having a set period of employment after they have resigned or been terminated.

What are notice periods?

A notice period, or a ‘period of notice’, is an important part of the employee offboarding procedure. It is the period of time between when an employee submits their resignation, or when they have been terminated by an Employer and their last day with the Employer.

Notice periods can be confusing, as their terms are not standardised across all roles or types of employment. The length and type of notice period an employee or Employer are entitled to give depends on several factors.

How much notice do Employees need to give?

How much notice an employee needs to give depends on their award, enterprise agreement or employment contract. Employees should check their award or employment documents to find the notice period. Generally speaking, for full-time staff, when a notice period is required, it’s usually between 2-4 weeks based on the number of years employment.

When an employee is hired under an award and agreement free wage and condition, they may not be required to give a notice period, depending on what’s laid out in their employment contract.

How much notice do Employers need to give?

The amount of notice that an Employer has to give their employee depends on how long the Employee has been with the business.

What is a ‘minimum notice period’?

Minimum notice periods are the legal notice periods that Employers must give Employees when they are being dismissed. An employment contract can’t provide for less notice than the legal minimum stipulated in awards and agreements.

The minimum notice periods set out in the Fair Work Act are as follows:

• For Employees that have been employed one year or less; one week
• For Employees that have been employed between one to three years; two weeks
• For Employees that have been employed between three to five years; three weeks
• For Employees that have been employed for more than five years; four weeks

If an Employee is 45 years or over and has at least two years of continuous service, you must add an additional week to the above periods of notice.

Can I pay the employee instead of having them work their notice period?

An Employee can continue to work during their notice period, or an Employer can pay it out to them (this is known as pay in lieu of notice). The Employer could also organise a combination of the two.

If the Employer pays out the employee’s notice period, the payment must be equal to the full amount that the employee would have been paid had they worked until the end of the notice period.

Can an employee take annual leave during their notice period?

An Employee can take annual leave during their notice period if they come to an agreement with their Employer. An Employer, however, cannot make an Employee to take annual leave during their notice period, unless they wanted to make a payment in lieu of notice instead.

Can an employee take sick leave during their notice period?

An Employee can take sick leave during a notice period, but they may have to give evidence if an Employer asks for it. If they do not have any paid sick leave left, they may take it unpaid but they must give notice and supply evidence like a medical certificate.

When is the final payment due after resignation?

Most awards say that Employers need to pay Employees their final pay within 7 days of their final day with the business.

As a rule of thumb and to be consistent it’s still best practice for an Employee to be paid within 7 days of their employment ending if it is not stipulated in a contract.

We know it can be tricky to make sure you are managing your obligations, which is why we are here to help.

If you have an Employee resign and don’t know what to do. Please reach out to contact@nowactually.com.au