On notice! Your responsibility when ending an employment relationship

28 May 2019 Virginia Brookes


Our Director Virginia Brookes contributed to the REINSW article this week.

Terminating a working relationship can be awkward, but in people management positions it’s part of the job.
Hopefully it’s not something you have to do regularly. However, if it is necessary, you should know your rights and responsibilities. 
So, how much notice must be given when bringing an employment relationship to an end? We chatted with Bryan Wilcox, CEO of the Real Estate Employers’ Federation, and Virginia Brookes, Director at Resolver Recruitment, about minimum notice periods for termination, correct notification and respectful resignation.
REINSW: How should notice be given?
Bryan Wilcox: For employers, the Fair Work Act 2009 (Cth) requires an employer to give an employee notice of their termination in writing. Failure to do this is a breach of the Act but doesn’t necessarily mean the termination hasn’t been effected. 
The written notice may be given personally. Alternatively, it can be left at or mailed to the employee’s last known address. 
Don’t give written notice by way of email or text message (except in unusual circumstances). If you believe there’s no reasonable alternative, seek expert advice first.
For employees, notice may be given verbally or in writing. If an employee verbally resigns, it’s prudent to obtain written confirmation. This helps to avoid a ‘heat of the moment’ decision that one or both of you may later regret.
Virginia Brookes: I think everyone involved in giving notice needs to be mindful whether it’s the employer or employee giving notice. Employees can become very good friends with their colleagues and when a colleague is given notice in a badly handled way this can also put some of your other employees at risk.
Try to, when possible, talk to your team after a termination has been made. But try to give facts and not too many personal opinions. You still want your team to feel settled in their roles once you move one of your team on.
REI: How much notice must be given?
BW: As an employer, you must provide the minimum period of notice prescribed by the Fair Work Act. This period is calculated based on the length of service of the employee and their age (see table).
Of course, these notice periods won’t apply in circumstances where the employee is being terminated due to serious and wilful misconduct or where a fixed-term contract applies.
In cases where an employee wants to bring their employment to an end, the minimum notice prescribed under the award or in their contract of employment must be given. 
For employees under the Real Estate Industry Award, the minimum period of notice is one week, or any longer period agreed by the employer and employee. This provision is currently under review by the Fair Work Commission, so it’s possible it may change in the near future.
For employees under the Clerks – Private Sector Award, the minimum period of notice they must give is as set out in the table. Where the employee fails to provide the required minimum period of notice, there’s a possibility to withhold an amount to offset the notice not given from monies due to them on termination.
REI: What is ‘pay-in-lieu of notice’?
BW: When terminating an employee’s employment, it’s common for employers to decide it’s best for the employee to leave immediately rather than work out their minimum notice period.
In such circumstances, the employee is entitled to be paid as if they’re actually working. This is called ‘pay-in-lieu’.
Where an employer terminates a commission-only employee’s employment, their notice period is required to either be worked out or paid in lieu.
Where an employer decides to pay-in-lieu of the notice, the Real Estate Industry Award requires that such notice is paid at the greater of the following:
The minimum award rate for the classification; or
The average weekly remuneration over the last 12 months. This is an average of any commissions and leave payments made over the last 12 months.
Where an employer does not pay at the higher rate, it is a breach of the Award and the Fair Work Act.
Why should employees leave roles respectfully?
VB: The world these days is a very small place and once you have worked somewhere you will generally always leave a digital footprint of where you have been.
For employees leaving roles, always try and leave on a positive note. Fulfil your duties until the end, do a full handover with someone in the team and always say thank you to your employer.
Most future employers will always want to ring previous employers to get some feedback on your performance and attitude. So whether you leave on a positive note or not can dictate your successes in roles moving forward.
REI: Can notice be withdrawn?
BW: The answer to this question will generally be “no”. However, there are occasional situations where an employee may seek to withdraw their notice of termination claiming it was a ‘heat of the moment’ decision.