During the course of your business, you will likely have to deal with an employee resigning. Resignation refers to where an employee voluntarily ends their employment. Employees will usually notify their employer of their resignation through written notice, such as by letter or email. There are various rights and obligations that arise from the end of employment. This article will take you through the key elements to know following an employee’s resignation.
Providing a Resignation Notice
Although an employee can give verbal notice of their resignation, it is best to provide it in writing. Providing notice in writing will help prevent miscommunication about when the notice period begins and ends. Likewise, it ensures you have written evidence that the employee has ended their employment with you. This written notice might be by letter or email. Further, your employment contract might provide a requirement to provide notice in writing.
Resignation Notice Periods
Your employees can resign at any stage in their employment without discussing it with you. Although employees can tender their resignation at any stage in their employment, most awards, enterprise agreements and employment contracts provide a minimum notice period.
Importantly, notice periods start the day following the employee’s notice and end on the last day of their employment. If you do not require your employee to work during their notice period, you might choose to pay them in lieu of notice and allow them to leave early instead.
Continue reading this article below the formLeave During a Resignation Notice Period
Prior to their resignation and during their notice period, an employee might choose to take paid annual leave instead of working. However, the employer must agree to this leave. Further, your employees may use their paid personal/carer’s leave during a notice period, provided they give you notice as soon as possible. Likewise, if your employee chooses to take sick leave, they may need to provide sufficient evidence such as a medical certificate.
Alternatively, your employee may not have any annual leave or sick leave accrued. In this case, they may take unpaid leave, provided you agree to this.
Final Payments
When an employee’s employment finishes, you might still owe them a sum of money. This is known as their final pay. Awards, enterprise agreements or employment contracts might explain when your business must make this final payment. However, suppose the relevant awards, agreements, or contracts do not specify provisions. In that case, you should make the final payment within seven days of their employment ending, or on the next regular payday.
Additionally, final pay should include, where relevant or applicable:
- outstanding wages;
- accumulated but unused annual leave;
- payment in lieu of notice ;
- annual leave loading ;
- long service leave ; and
- redundancy pay .
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
Other Processes
Following an employee’s resignation, there may be several other tasks you or the leaving employee must complete. For example, the employee may need to train their replacement, delegate leftover work, or finalise a project.
On the final day of an employee’s employment, you should consider if they have any business property to return. This might include office keys or laptops. In addition, be sure your employee hands over any relevant information, such as passwords to computer logins.
As an employer, you should also update an employee’s personnel file by providing a copy of their resignation letter. It can be helpful to make a note of their notice period and why the employment ended.
Key Takeaways
Naturally, you will have to deal with an employee leaving when running your business. Resignation refers to where an employee voluntarily terminates their employment. Some key things to note about resignation include:
- it is best practice to provide resignation in writing;
- most awards, enterprise agreements and employment contracts provide for a minimum notice period;
- aftera resignation, there may be several other tasks your employee must complete, such as training their replacement.
If you need assistance understanding the process following an employee’s resignation, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
Resignation refers to when an employee voluntarily terminates their own employment. An employee will usually notify their employer of their resignation through written notice, such as by letter or email.
Following an employee’s resignation, they must serve a notice period. This notice period will differ from employee to employee. In addition, there may be some other tasks an employee must complete following their resignation. For example, the employee may need to train their replacement, delegate their leftover work, or finalise a project.
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