What is a Notice Period? (& What Employers Should Expect)

In this guide, we will break down what a notice period is, why it matters and how you can manage notice periods in your organisation.

1. Smooth transition: Notice periods allow for a gradual handover of responsibilities to minimise disruption to the business.
2. Continuity: With sufficient notice, employers can plan for recruitment or internal succession to fill critical roles quickly.
3. Fairness and respect: Notice periods show mutual respect between employer and employee so both can prepare for the change.

Notice periods also apply in two main scenarios: 

1. when an employee resigns and;
2. when an employer terminates an employment contract. 

Understanding your obligations in each situation is key to compliance and best practice.

Note: Employees 45 and over with 2 years of service are entitled to an extra week’s notice.

These statutory notice periods are designed to provide employees with adequate time to prepare for the end of their employment.

If an employee is covered by a registered agreement, the notice period specified in that agreement must be followed. These are common for senior or specialist roles requiring a longer transition period. 

For example, a senior manager may have a contractual notice period of three months, and a general staff member may only be entitled to the minimum statutory notice.

As an employer, you need to review and honour any required notice period to avoid breaching the agreement.

There are a few scenarios where notice periods don’t apply:

• Casual employees: Due to their work's irregular and intermittent nature, casual employees don’t have notice periods.
• Expiration of fixed-term contracts: No notice is required if an employment contract is for a specified period and expires on the agreed date.
• Serious misconduct: If an employee is dismissed for serious misconduct (e.g. theft, violence or serious breach of safety), the employer doesn’t have to give notice.

For instance, while casual employees don't have notice periods, a standard two-week notice is often required for permanent employees.

• Acknowledge the resignation in writing, confirming the notice period and their last day of work.
• Clarifying how much notice is required to ensure a smooth transition is important.
• Start planning for a smooth handover, identifying key tasks and knowledge that must be transferred.
• Communicate the change to the team, clients or other relevant stakeholders.

• Give the employee written notice of termination, clearly stating the notice period and their last day of employment.
• Ensure you give the correct notice period based on the employee’s length of service, age, and any contractual obligations. Ensure that the employee's final payment accounts for the wages they would have earned if they had completed the entire notice period.
• Document the termination process, including the reason for the decision, any correspondence, and the final pay calculation.

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However, it’s essential to note that the employee will not accrue leave during the notice period.

If an employer chooses to pay an employee in lieu of notice, they must ensure that the payment includes the employee’s full entitlements, such as superannuation and any accrued leave.

This approach can help maintain a positive relationship and ensure a smooth departure.

If an employee wishes to take annual leave during their notice period, they must request it in writing and provide sufficient notice. Employers can approve or reject these requests based on business needs. 

Additionally, an employee on sick leave during their notice period must provide a medical certificate to support their claim. This ensures that the process is fair and transparent for both parties.

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• Accrued annual leave
• Accrued sick leave
• Payment in lieu of notice (if applicable)
• Superannuation contributions

Any other entitlements specified in the employment contract or relevant award
Employers must also ensure they have paid all the employee’s entitlements in full, including any outstanding wages or leave.

Failure to provide a final payslip or pay employee entitlements can result in penalties and fines under the Fair Work Act 2009. 

1. Considering the employee's period of continuous service when planning for their departure to ensure compliance with notice period requirements.
2. Developing a comprehensive handover plan for departing employees to ensure critical knowledge and skills are transferred to remaining team members or replacements.
3. Communicating openly and professionally with your team about upcoming changes and answering any questions or concerns they may have.
4. Starting recruitment or internal succession planning as soon as possible to minimise downtime.
5. Treating departing employees with respect and gratitude, maintaining a positive relationship until their last day and beyond. This can protect your reputation as an employer.

1. Not checking and honouring contractual notice periods and getting sued for breaching the contract.
2. Not providing enough written communication or documentation throughout the process.
3. Rushing or overlooking the importance of proper handovers and losing knowledge or disrupting the business.
4. Allowing emotions to cloud your judgement or professionalism during the notice period.

• Managing notice periods is a key skill for any Australian employer. Stay informed about your legal obligations, honour your contracts and be best practice-focused and you’ll be confident and minimise disruption to your business.
• Remember, investing time in proper handovers, clear communication and respectful management of departures will pay dividends in the long run and protect your reputation and culture.
• As an employer, review your contracts, policies and procedures regularly to stay compliant and best practice.

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