There are several sources of the obligation to give notice on termination, so how do you work out how much notice has to be given?
The first place to look is the National Employment Standards in the Fair Work Act 2007 (Cth). The NES set out minimum notice periods that apply to all employees. The following notice periods apply:
|Period of continuous service||Minimum notice period|
|Less than 1 year||1 week|
|1-3 years||2 weeks|
|3-5 years||3 weeks|
|over 5 years||4 weeks|
If an employee is over 45 years old and has worked for at least 2 years they are entitled to an extra week of notice.
If there is an Award or collective agreement that applies to the employee, employers should check this to see if a different notice period applies. Many Awards or collective agreements apply the NES notice scale.
These are minimum periods of notice. Employers should also check the employee’s employment contract. If an employee has a longer period specified in their employment contract, this notice period must be given.
If an employee does not have an employment contract, or their contract does not contain a notice clause, the courts will imply a term that they are entitled to “reasonable” notice. Reasonable notice is determined on a case-by-case basis depending on several factors, such as age, seniority, length of service and ability to find commensurate alternative employment. Periods of reasonable notice can be as little as a few weeks and up to 12 months or even longer. This is the reason why it is important for an employee to have a contract of employment with well-drafted notice provisions.
The NES notice provisions allow an employer to pay an employee in lieu of the notice period, so an employer can do this if they want to finish the employment sooner. If the applicable notice period is found in the employment contract, the terms of the employment contract will determine whether a payment in lieu of notice can be made. There is no right to pay in lieu if an employee is entitled to reasonable notice at common law. Even if there is no right to pay in lieu of notice, an employer and employee can agree to do so if the termination is amicable.
Not all employees are entitled to notice of termination. For instance, casual employees, fixed-term employees, task-based employees, seasonal employees and employees dismissed for serious misconduct are not entitled to notice of termination under the NES. However, they may be entitled to notice under their contract of employment.
During an employee’s notice period, they remain employed as usual and can take annual leave and sick leave. In certain circumstances, an employer can require the employee to take “garden leave”, meaning they do not attend work but continue to be paid until the end of the notice period. This depends on the nature of the employee’s role and whether the employer is permitted to do this under the employee’s employment contract.
For more information or assistance, please contact Sean Melbourne.
A copy of the article can be found here.