What to do when an employee won't work their notice period

What happens when an employee is about to finish employment with the business (either because you have decided to end the employment relationship or they have), and fails to turn up to work out their notice period?

This can be an inconvenience for the organisation and could cause major headaches, leaving you unprepared and short-staffed. You’ll probably have to quickly start the search for a replacement and meanwhile, the rest of the team have to pick up the slack. The person skipping the regular handover period further complicates things and may mean loose ends are left hanging and any processes or valuable learnings they’ve made on the job go undocumented.

So what are your rights when an employee abandons the job without working the notice period? This blog post takes a good look at notice periods, how they should work and what your options are if they don’t.

What are notice periods?

“Giving notice” is when an employer tells an employee, in advance, that they are going to end their employment or an employee resigns. The notice period starts the day after notice is given and ends on the last day of employment.

The National Employment Standards (NES) provide minimum legal notice period lengths, dependant on the employee’s continuous service with the employer:

• 1 year or less = 1 week’s notice.
• More than 1 year up to 3 years = 2 weeks’ notice.
• More than 3 years up to 5 years = 3 weeks’ notice.
• More than 5 years = 4 weeks’ notice.

In addition to these minimums, any employee over 45 who has worked for the business for at least 2 years gets an extra week of notice.

Modern awards and enterprise agreements may also set out minimum notice periods. Likewise, employment contracts or company policies can set the period of notice, but these can’t be less than the NES or applicable modern award/agreement.

Under some awards and agreements, the employee doesn’t have to give notice and can finish work right away.

Notice periods don’t apply to casual employees, seasonal workers, people employed for a specific task or period of time, or when the employer has good reason to dismiss the person without notice (also called “summary dismissal”) for serious misconduct, e.g. because they stole company property or took illegal drugs at work. You may still need to follow fair and reasonable process in some of these situations, such as dismissal for serious misconduct or where casuals have worked regular and systematic hours.

Employers must always give notice in writing, but depending on the award or enterprise agreement, the employee may be able to give notice verbally.

Check notice entitlements using the Fair Work Ombudsman’s calculator.

Options instead of working out the notice period

Normally, the employee would meet the obligation to work for the notice period, but an employer may wish to pay the employee instead of them coming to work for some or all of the notice period (sometimes called “payment in lieu”).

This is useful in cases where the person is being made redundant, is creating a distraction to other workers, or they have access to commercially sensitive information and is going to work for a competitor. In this case, the employee’s employment ends on the day that notice is given, and while they must receive the full rate of pay for the notice period not worked, they do not accrue leave entitlements for this period.

The NES and most modern awards permit employers to pay employees in lieu of them working the notice, however in instances where the employee resigns and gives notice, payment in lieu is only permitted if agreed to in an employment contract.

Alternatively, you may be able to agree with the employee that they take leave with pay (often called “gardening leave”) for the duration of the notice period. Remember that you generally can't force an employee to take annual or sick leave as part of the notice period.

In the case of dismissal, you can agree to waive all or some of the notice period if the person asks (they won’t be paid for the portion of notice period they don’t work). If you don’t want to reduce the notice period, the employee can choose to resign and give their own minimum notice (any time they have already worked during the original notice period doesn't count).

If you come to any agreement with the person that deviates from normal terms of the notice period, it should be recorded in writing and signed by both parties.

If you pay an employee in lieu of notice, they must be paid the total amount they would have been paid if they had worked until the end of the notice period, including any incentive-based payments and bonuses, loadings, monetary allowances, overtime, and penalty rates.

During the notice period

The notice period gives the employee time to complete the work they can and transfer any remaining essential tasks to someone else. There may be some ill-feeling and strain on the employment relationship, depending on the circumstances of the termination, so try to remain objective and not let emotions hinder the process. Creating a plan with the employee will help ensure this is handled efficiently.

Part of the finishing and handover process should be the person organising and documenting any relevant procedures, insights etc, and showing someone where to find their files and documents (a shared drive is best).

On the last day of employment, the employee should hand in any company property they have. The employer needs to:

• Calculate and pay the final pay, including penalty rates and allowances, any accrued annual leave (this includes annual leave loading if it would have been paid during employment), accrued or pro rata long service leave, and redundancy pay - either on their last day or within 7 days of their employment ending.
• Retain any relevant employee information, e.g. tax information, wage, time, and leave records, or performance information (if the employer has provided a reference), or information relating to any dispute between the employer and the employee.

We recommend conducting exit interviews, particularly if the resignation has come out of the blue. If there is disharmony between the employee and the employer/manager, having someone else run the interview is a good idea, so you can gain frank and honest feedback.

Some organisations like to run exit interviews via surveys, which is fine if this is a tick-box exercise, e.g. you want to know about retention and why people are leaving: is it for more pay or better benefits? But if you are looking to analyse it more deeply from a company-culture perspective, it’s best to run interviews in person, so you can ask questions and look further into what has caused the person to leave.

Learn more about ending employment fairly and safely.

Your rights if the employee doesn’t work out the notice period

While you can’t force employees to stay in their role if they want to leave, failing to turn up for the notice period is a breach of their responsibility to act fairly and responsibly. In the first instance, you should endeavour to keep lines of communication open and contact them to see if anything is stopping them from coming to work.

If this fails and the employee doesn’t work for the agreed amount of notice, you may be able to withhold money from their final pay (but you cannot withhold or make any unilateral deductions from their owed wages or entitlements, e.g. unused annual leave).

Most modern awards entitle the employer to withhold up to 1 week's wages for employees who are at least 18 years old. You should check the award, registered agreement, or employment contract to see what rules apply when the minimum amount of notice isn’t given. If deductions from pay aren’t allowed, you have no choice but to pay them all of their entitlements.