Ending employment during the notice period
When an employee plans to leave the business, this time can often be difficult.
How do you navigate the notice period without angst for the employee or increasing the business risk? When the notice period is not going well, what are your options?
The Fair Work Commission (the Commission) recently heard a case where the employee claimed he was dismissed after resigning. The employer defended their position stating the employee had voluntarily resigned.
The employee had worked for a transport company since June 2023. On 25 March 2024 he submitted his resignation providing one month’s notice and had intended on finishing on 19 April 2024. However, his employment ended on 28 March 2024 following a conversation with the company owner/director.
The decision to be made was whether the employee had resigned or been dismissed.
The case considered importantly, the interpretation of the phone call between the employee and the employer which was agreed to have occurred on 28 March 2024.
The parties argued that the phone call on 28 March 2024 was to give the employee the option of leaving where the employer expressed that the worker was unhappy in his role and had already expressed a desire to leave the business early. The employer stated that during the call the employee agreed the situation had deteriorated and that “he was happy to move on, of his own accord”.
The Commission also heard other details that may have weighed on the matter including that the employee relationship with his direct manager had been strained during the period and the employee had raised some concerns about the working environment. After lodging his resignation with the employer, the employee filed a grievance where he alleged bullying and constructive dismissal which placed further complexity on the workplace relationships. The employer also provided evidence that the employee did not perform during the notice period including, missed deadlines and not attending required regular meetings.
In consideration of the evidence the Commission determined that the employee had indeed been dismissed by the employer with the Commission emphasising the crucial factor in this case being whether the employee had a real choice to work out the full notice period.
Given there was no real discussion in this case about working the balance of the notice period or payment in lieu of the balance of the period, it can’t be found that the employee “freely agreed” to make his resignation “effective immediately”. Moreover, the Commission was satisfied that the employer had initiated the discussion with the employee about finishing earlier then the date earlier specified in the employee’s notice of resignation.
This decision highlights the importance of heeding caution when discussing departure with employees who have provided notice of resignation. Ensure that there is clear agreement on all terms including period of notice to be worked and any payment in lieu of notice where a period of notice isn’t worked or intended to be worked by the employee.
Any reduction in the notice period must be agreed by both parties for any payment not to arise.
If an employee:
– doesn’t have to give notice under their award, registered agreement or employment contract, they can finish straight away.
– provides more notice than required in the award, registered agreement or contract, the employee only has to work out the minimum notice period. They can work out the extra notice if they want to (and where it is agreeable by the employer).
– only works the minimum notice period, the employer doesn’t have to pay the extra notice period.
Have questions about an employee separating from the business? Not sure what to pay them? Please contact us at [email protected] or 1300 720 004.
