What happens when I terminate an employee?
There are a number of requirements you need to meet when you terminate the employment of an employee, including providing notice of the termination in writing (templates available below). These requirements are in the National Employment Standards (NES).
What happens when my employee resigns?
Under the modern award, if an employee resigns or ends their employment, they need to give you notice of termination. The amount of notice they have to give you is the same as the amount of notice you have to give them under the NES, except your employees don’t need to provide additional notice based on their age.
If an employee does not give you the correct amount of notice of termination, you can withhold money from their final pay equal to the amount they would have earned if they had worked during the notice period.
Note: An employee’s final pay includes any outstanding wages (including penalty rates and allowances), unused annual and long service leave, redundancy payments (if applicable), and pay in lieu of notice of termination (if applicable). You should also ensure you make the required payments into the employee’s superannuation fund. Further information is available at Final pay.
Amy has been working full-time for 3 and a half years. Amy decides to resign and gives her employer, Lyn, 1 week's notice.
Under the NES, the notice period is 3 weeks for an employee who has worked 3 - 5 years; Amy should have given Lyn 3 weeks’ notice. Lyn advises Amy that she will withhold the equivalent of 2 weeks' wages from her final pay to cover the additional 2 weeks’ notice that she did not provide.
For information about unfair dismissal, the Small Business Fair Dismissal Code and what to pay your employees in their final pay, visit Termination.