Approved resignation and notice periods

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When an employee resigns, they may be legally obligated to give notice to their employer. There are various rules and regulations which determine how much notice one must give before resigning. Business Kitz the answers to your questions about resignation and notice when leaving your job.

What is the resignation notice period?

The notice period is the amount of time which must be provided by an employee before ending their employment contract and resigning. The period starts the day after the employee gives notice of resignation and ends on the last day of employment. The notice period provides the employer time to find a suitable replacement and allow for proper handover. For the employee, the notice period provides time for them to return any company property or confidential information. Also note that notice periods do not apply to casual or fixed-term employees.

How much notice to resign?

The employee’s employment contract or other registered agreement states if they are required to give notice before resigning and how much notice is needed. Employees should check the terms of these documents for specific information on how many weeks notice is required to be provided when resigning (if any). 

Under the Fair Work Act, the employee is not required to provide any notice before resigning, however, the employee’s specific employment contract may require an employer notice. 

If the employee’s contract does not mention notice, or the employee does not have a written contract, the employee may be required to give their employer reasonable notice. 

How can an employee give notice?

Although it is possible to provide verbal notice, it is best practice to provide a resignation notice in writing. This is often a requirement of the employee’s employment contract. 

What happens after an employee gives notice?

The employer should ensure the amount of notice is correct after an employee notifies them of their resignation. The employer must acknowledge the employee’s resignation as they do not have the option to accept or reject the resignation. The employee continues to work as usual until their employment ends, which is at the end of their notice period. 

Can an employee use their leave during a notice period?

If the employer agrees to a leave period, the employee may utilise their paid annual leave during a notice period. Public holidays or other such leave does not usually extend the notice period. An employee may also utilise their paid sick leave or carer’s leave during a notice period if they provide:

  • Notice of the leave as soon as possible; and 
  • Evidence, such as a medical certificate, if their employer requests it.

If an employee has no paid sick leave left, they may be able to take unpaid leave as long as they provide their employer the required notice and associated evidence.

What is the process for a director resignation letter?

The resignation process for a director involves specific steps which differ to those mentioned above. If a director wishes to resign from their role they are required to do so through a director resignation letter. The director is required to sign, date and deliver the resignation letter to the company’s registered office. Consequently, the duties of the director will end when they no longer act in the role. 

The Australian Securities and Investment Commission (ASIC) must be notified within 28 days of the director’s resignation. Oftentimes, the company will notify ASIC of a director’s departure by updating their director register, therefore, it is not the resigning director’s obligation to notify ASIC. If the resigning director wishes to do so, they may submit a completed ASIC Form 370 and attach a copy of the director resignation letter.

How do I draft a director’s resignation letter?

Although there is no specified format for director resignation letters, it should be made clear that the director is resigning from their position with effect from a specific date. This date can either be the date of the letter or a specific date in the future. 

The company may also require the director to provide confirmation, which should note that:

  • The company has received everything which the director was entitled to in their capacity as a director; and
  • The director releases the company from claims made against the company in their role as director.

Can I resign without notice?

Although it is not illegal for employees to resign without notice, they may face negative consequences. As most employees are aware of this, they will provide due notice. The Modern Award entitles the employer to withhold wages owed to the employee for resigning without notice. This amount is either:

  • Up to one week’s worth of wages; or 
  • Up to an amount equivalent to what the employee would have earned if they had provided the required period of notice and had worked such notice. 

The employer can also refuse the employee’s request to provide a reference letter or act as a referee.

Legal advice

If you need assistance with drafting a resignation letter, our sister company Legal Kitz is happy to help. We provide FREE 30 minute consultations to ensure your queries and concerns are understood. Book here now, or call 1300 988 934.