Resignation from Employment
When an employee wishes to voluntarily leave their employment, it is known as resignation. An employee in Australia has an absolute right to resign, and the employer has no choice but to accept the resignation. Fair Work Australia dictates the rights and responsibilities of an employee and employer during the resignation process. This article explains the rules relating to employee resignations in Australia.
The chief characteristic of resignation is that it is voluntary. When an employee has no choice but to resign, this is known as a forced resignation or constructive dismissal. When an employee resigns because it is no longer tenable to continue in their role, this is a resignation against their will. The employer would need to act in a manner that was a significant breach of the employment contract so that the employee has no choice but to resign. The clearest example of this is if an employer threatens to fire an employee unless they resign, but it also applies if the employer takes away the essential materials or tools that they need to do their job. It can also apply when an employee is subject to unacceptable conduct, such as bullying, sexual harassment and the employer fails to prevent the conduct. The onus is on the employee to establish that they were forced to resign and this can be difficult to prove, as the difference between an employee deciding to resign and having no choice but to resign is subjective.
In Hobbs v Achilleus Taxation Pty Ltd ATF the Achilleus Taxation Trust , the Fair Work Commission found that an employee has been forced to resign because he was paid less than half his correct wages over a four-month period. It was held to be the conduct of the employer that caused the resignation and ultimately constituted an employer dismissal. On the other hand, in Love v Alcoa of Australia Limited , the Commission found that an employee had voluntarily resigned before a disciplinary meeting over theft of company property.
An employer can generally proceed without hesitation when an employee clearly tenders their resignation. However, if a resignation is made impulsively and in the heat of the moment, it is best practice for the employer to ensure that the resignation was serious and final. In that circumstance, an employer should allow the employee reasonable time to reconsider their decision and then confirm their intention to resign. This is especially the case when an employer interprets the actions of the employee as a resignation, such as when an employee walks off the job. In this circumstance, the Commission may not agree that the employee was unambiguously resigning from his or her position.
An employee must give written notice to the employer of their intention to resign. Once the employer has received the resignation letter, they will confirm that the notice period stated is correct or incorrect as appropriate.
The minimum notice (if any) will be stipulated in the employee’s employment contract, registered agreement, award or enterprise agreement. An employment contract cannot provide for less notice than the minimum established in an award or agreement. When the contract is silent on the issue of notice, or the employee has no written contract, the employee is typically obligated to give reasonable notice.
An employee who is not subject to an award, agreement or employment contract is not required to give notice before resigning.
An employee should provide as much notice as practicable given their own future employment arrangements and the needs of the company. Providing this professional courtesy should allow the employee to remain in good standing with their former employer in case they need an employment reference. A notice period starts the day after the employee gives formal notice, and ends on the employee’s last day.
Entitlements During Notice Period
During this period, public holidays usually count towards the total number of notice days, and an employee can still, with reasonable notice, take personal “sick” leave (in this case the employer may ask for a medical certificate). If an employee has no personal leave balance they can negotiate with their employer to take annual leave or unpaid leave during the notice period. In fact, an employee can take annual leave for the entirety of the notice period if the employer agrees.
Employer Does Not Require Notice
An employee who has resigned will work as usual during the notice period unless the employer does not want them to work their notice. In the event that an employer does not want the employee to work through the notice period, they can:
- Come to an agreement with the employee to stop working immediately and have their notice period paid out; or
- Without the consent of the employee, pay out the employee’s salary and entitlements for the notice period given by the employee; or
- (Depending on contract or agreement) direct an employee to take paid “gardening leave” for the notice period.
An employer should consult an experienced employment lawyer before making any decisions about ending a worker’s employment. An employee may be able to make an unfair dismissal claim to the Fair Work Commission if they can prove that it was an unlawful termination or a breach of general protections.