Resignation notice and what Australian employers must get right when a team member quits

There is no law in Australia that says an employee who resigns must give two weeks' notice. "Two weeks" is a widely used convention, but your actual obligations come from the employee's contract, any applicable award or enterprise agreement, and the Fair Work Act 2009 (Cth). When a resignation lands, the real work for an employer is not enforcing an arbitrary fortnight, but correctly identifying the notice period that actually applies and then handling final pay, leave and the departing employee's final days lawfully.

That last point is easy to get wrong, and the mistakes can be costly. An unlawful deduction from final pay, a forced resignation that is really a dismissal, or money left unpaid can each spark a Fair Work Commission claim or a general protections complaint that costs far more than the fortnight ever saved. This guide sets out who these obligations apply to, what you must do when an employee resigns, and where the risks sit so you can manage them.

Who these obligations apply to

These duties flow from the National Employment Standards (NES) in the Fair Work Act 2009 (Cth). They apply to national system employers, which covers most private-sector businesses in Australia, and to the national system employees they employ. If you employ staff under a modern award, an enterprise agreement, or simply a written contract, you are almost certainly captured.

A few distinctions matter from the start:

Casual employees: Notice of termination entitlements in the NES do not apply to casuals. A casual is generally not required to give notice when resigning unless their contract or an award says otherwise, and you are not obliged to give a casual notice when their engagement ends.
Award-covered employees: Many modern awards set a minimum resignation notice for employees (often one week) and some permit deductions from wages if the full notice is not worked. Your award wins over a silent contract.
Award-free employees: Where no award, agreement or contract term sets a resignation notice, the period is whatever the employment contract provides, and where nothing is specified a reasonable period can still be expected for senior or professional roles.

The single most important thing to understand is that the NES notice of termination rules in s 117 of the Fair Work Act 2009 (Cth) govern the notice an employer must give when dismissing an employee. They do not prescribe how much notice an employee must give when resigning. That is a distinction employers routinely overlook, and it drives everything that follows.

Determine the notice period that actually applies

Before you do anything else, find out how much notice the resigning employee must give. Check, in order:

the employment contract, which may spell out a notice period for resignations and how notice is to be given;
any modern award or enterprise agreement that covers the role, which may set a minimum resignation notice; and
any policy the business has adopted that employees reasonably rely on.

If the contract says four weeks and an award says one, the more favourable provision applies to the extent of any inconsistency. If the contract is silent and no award or agreement applies, there may be no fixed minimum. In every case the right answer is the specific wording that governs this person's role, not a guess at a universal "two weeks".

While you are in the contract, note the mechanics: how notice must be given (in writing, to a named person), whether the employer can waive notice or pay in lieu, and what happens if the employee does not work out the full period. These provisions determine what you can lawfully do with the notice.

Get the resignation in writing and confirm the last day

A resignation given verbally is still a resignation, but you should put it beyond dispute straight away. As soon as an employee tells you they are leaving, respond in writing to confirm:

that the resignation is accepted;
the date the resignation takes effect and the employee's last day of employment;
the notice being worked, and whether any of it is being paid out or waived; and
what you expect during the notice period, including duties, confidentiality, return of property and any post-employment obligations.

If notice was given verbally, ask the employee to confirm it in writing. This written record protects you later if the employee disputes the last day, whether notice was validly given, or the treatment of their final entitlements. It also makes it much harder for a departing employee to later claim that what looked like a resignation was in fact a dismissal.

Pay out final entitlements correctly

Once the employment ends, the employer is under a legal obligation to pay the employee everything they are owed. The two items that trip employers up are unpaid wages and annual leave.

Under s 90 of the Fair Work Act 2009 (Cth), when employment ends the employer must pay the employee for any accrued but untaken annual leave. This is not optional and it is not something the employee forfeits by resigning. If the employee resigns without taking their leave, the accumulated balance must be paid out at termination.

Final pay should also include:

any wages earned up to the last day of employment, including any overtime or penalty rates owed;
any accrued but untaken time off in lieu or rostered days off that your policy or agreement says is payable on termination; and
any other contractual entitlements, such as a notice payment if the contract provides for payment in lieu and the parties agree to it.

There is no NES deadline that sets a single national date for final pay, but many modern awards require final pay to be dealt with by the last day of employment or shortly afterwards, and state laws can impose their own timing. Check your award or agreement and pay as early as you reasonably can, because late payment of entitlements is a common and entirely avoidable source of claims.

Only make deductions the law allows

If the employee does not work out their full notice, you may be tempted to deduct the shortfall from final pay. Treat this with caution. Section 324 of the Fair Work Act 2009 (Cth) sets out when a deduction from an employee's wages is permitted. A deduction must be:

authorised in writing by the employee and principally for the employee's benefit; or
authorised by the employee under an enterprise agreement; or
authorised by a modern award or an order of the Fair Work Commission; or
authorised by a law or court order.

A deduction that mainly benefits the employer, such as clawing back wages simply because the employee left early, will not be permitted unless a specific award or agreement provision authorises it. Even where an award does allow a deduction for notice not worked, the deduction must be properly made and documented. If you are not certain a deduction is lawful, do not make it. Instead, consider negotiating a written agreement to waive or shorten the notice, which avoids the deduction question altogether.

Manage the notice period fairly

During the notice period the employee remains employed, and the normal rules of employment continue to apply. That has real consequences for you.

Annual leave

The employee continues to accrue annual leave right up to their final day. They can request annual leave during the notice period, and you can approve or decline based on reasonable business grounds. You cannot insist an employee take leave during their notice simply to burn it down, because s 94 of the Fair Work Act 2009 (Cth) only lets you require an award-free employee to take annual leave where the requirement is reasonable, such as a genuine shutdown. If leave is approved it counts as leave, not as notice worked, unless your contract or award provides otherwise.

Personal (sick) leave

If the employee is genuinely unwell, they can access their accrued paid personal leave during the notice period, subject to the usual evidence and notification requirements in your policy, contract or award. Taking personal leave does not extend the notice period or restart the clock; it just changes which hours are treated as worked versus paid leave.

Public holidays

If a public holiday falls inside the notice period and it would otherwise have been a normal working day, a permanent employee is generally entitled to be paid for it. A public holiday does not extend the length of the notice period; it only changes how that day is classified for payroll.

No adverse action

Finally, remember that a resigning employee still holds workplace rights. The general protections in s 340 of the Fair Work Act 2009 (Cth) prohibit you from taking adverse action against an employee because they have exercised a workplace right. Mistreating a departing employee, cutting their pay, or accelerating negative action because they resigned can expose you to a general protections claim with significant penalties.

Protect the business through the final days

While the entitlements above are hard legal obligations, the practical management of a departing employee is where a business protects itself. Keep confidence, handover and access orderly:

Schedule handover time and identify who owns each critical task, deadline and piece of knowledge.
Plan progressive access changes so the employee keeps only what they genuinely need for handover, and set a clear cut-off at the end of employment.
Reinforce confidentiality obligations and keep sensitive information and client relationships out of reach.
Track and recover property such as laptops, phones, keys and cards.
Decide quickly whether client-facing duties should continue or shift to a colleague, and brief the team on the transition.
If performance drops or conduct issues surface during the notice period, use your normal management processes and document any warnings, rather than reacting impulsively.

The consequences of getting it wrong

Non-compliance is not theoretical. The main exposures are:

General protections claim: Under s 340 of the Fair Work Act 2009 (Cth), adverse action linked to a workplace right can lead to a claim in the Fair Work Commission and, if not resolved, to the Federal Court or Federal Circuit and Family Court with penalties.
Unfair dismissal: If you push an employee to resign, what looks like a resignation can be treated as a dismissal, and the employee may bring an unfair dismissal application if their employment had lasted long enough to qualify.
Underpayment claims: Failing to pay final entitlements, including the annual leave payout required by s 90, leaves you exposed to claims for unpaid wages plus potential penalties.

Compliance checklist for a resignation

Work through this checklist for every resignation:

Confirm the resignation in writing, including the last day and how notice is given.
Check the contract, award and any enterprise agreement for the actual notice period before you act.
Work out final pay, including unpaid wages, untaken annual leave and any lawful deductions, and pay it as early as the award or agreement allows.
Confirm any deduction from final pay is permitted under s 324 of the Fair Work Act 2009 (Cth) before making it.
Keep applying the normal rules for annual leave, sick leave and public holidays during the notice period.
Manage handover, access and property, and handle any conduct issues through a documented process.
Do not take adverse action against the departing employee.

When to get a lawyer involved

Most resignations are straightforward, and an organised process handles the majority without a lawyer. Bring in a practitioner if the resignation is acrimonious, if the employee is a senior figure with restrictive covenants or client responsibilities, if you are unsure whether a deduction or a forced resignation is lawful, or if a claim has already been threatened. A lawyer can review the contract and any relevant award, advise on whether you can waive notice or pay in lieu, and draft the written agreement that turns an awkward departure into a clean one.

The obligation employers most often miss

The mistake that costs the most is not in the final fortnight at all. It is deciding that "two weeks' notice" is a legal fixture and then reacting to the resignation on that assumption, rather than checking the contract and award first. That single assumption leads to unlawful deductions, missed annual leave payouts, and forced resignations that become dismissals.

Set the groundwork now rather than at the moment of crisis. Of the obligations covered here, the one closest to the door is money: check that your payroll process pays out untaken annual leave and all final entitlements on every departure, and verify before you ever deduct from a final pay packet. If you only take one action this week, audit how your business processed its last three resignations. The pattern that emerges will show you exactly what to fix before the next team member walks out the door.