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Resignation is when an employee makes the choice to cease their employment with their employer.

For a resignation to be lawful, an employee must advise their employer of their decision to leave the employment of the company and the date they intend to be their last day of employment with the business. The last day the employee works must comply with the employee’s obligation to give you a certain period of notice of resignation. If a resignation is lawful, it will take effect even though the employer might not accept it.

The amount of notice the resigning employee provides their employer with is usually specified in the applicable employment contract or other relevant industrial instrument, e.g. modern award or enterprise agreement. The notice period can be shortened by agreement, however if an employer does this without the employee’s agreement it will be considered to be a dismissal. If neither of these instruments contain an agreed notice period, the resigning employee must give the employer reasonable notice.

A reasonable period of notice is notice that enables the other party sufficient time to either seek new employment or to employ another employee. The amount of reasonable notice an employee should give their employer when they resign will depend on the circumstances.

If an employee gives their employer insufficient notice, the employer is within its rights to refuse to accept the resignation.

If an employee gives notice of resignation in clear and unambiguous terms in accordance with their employment contract, they cannot withdraw the notice unless the employer agrees. Although, an exception is if they have resigned ‘in the heat of the moment’.

Exercise caution if an employee resigns after an argument or ‘in the heat of the moment’. In many cases, the courts have found that the employer has a responsibility, despite very clear words on the part of an employee, to clarify whether the employee has in fact resigned.

If an employee resigns in the heat of the moment, their employer should:

  • give the employee a reasonable amount of time to calm down; and
  • seek clarification from the employee as to whether they meant to resign.

Generally, if an employee reiterates the resignation a reasonable time after the heated comment, or engages in actions that indicate the employee meant what they said, e.g. preparing a resignation letter, it is more likely to be a valid resignation.

If an employee needs to be performance managed or disciplined, it is an option for an employer to offer the employee the option to resign rather than proceeding with a disciplinary or performance management process. The employee might consider this offer attractive to avoid the risk of a later dismissal. This way, they could avoid having to tell prospective employers they were dismissed from their previous job.

But employers must make sure not to demand a resignation or indicate that dismissal is inevitable if the employee does not resign (this would be consider forced resignation). Make sure the employee has at least 24 hours to consider the resignation proposal and emphasise that no decision to dismiss has been made.

If an employer gives an employee notice of dismissal, the employee can resign during that notice period. You would then treat the resignation as any other. Conversely, an employer can dismiss an employee who has resigned and serving their notice period if the employer has grounds to dismiss the employee summarily, i.e. without notice.

When an employee resigns, certain steps need to be taken to ensure an employer acts in accordance with its obligations and the resigning employee’s rights, including the following steps:

  • determine whether the resignation is lawful;
  • consider whether to direct the employee to take gardening leave;
  • remind the employee of their obligations during the notice period (this may include enforcing a restraint of trade clause if it expressly exists in the employment contract;
  • organise the return of property belonging to the business and disable passwords;
  • determine how you will handle communications directed to that employee after they depart;
  • advise the employee of their post-employment obligations; and
  • consider conducting an exit interview.
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Top stories for Resignation

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Your questions answered: Can an employee make a claim against us after they resign?

Termination of Employment

Q: Can an employee make a claim against us AFTER they resign?

By Portner Press on December 5th, 2018

A verbal resignation can be sufficient to end employment

Termination of Employment

In Bonser v Nexus (Aust) Pty Ltd (2016) (Bonser), an employee argued that his notice of resignation was invalid because he did not give it in writing.

By Portner Press on December 3rd, 2018

Your questions answered: What happens if an employee fails to work their notice?

Termination of Employment

Q: If an employee hands in their resignation, but the next day does not turn up for work or ring to advise, can you class this as abandonment of employment?

By Portner Press on October 8th, 2018

Your question answered: How do we address pre-approved annual leave in a notice period?

Termination of Employment

  Q A worker has provided us with his notice of resignation. He has advised us of an incorrect notice period of 2 weeks and says that a pre-planned annual leave period of 3 days is included in his notice period. Under […]

By Jeff Salton on May 25th, 2018

When employees abandon work – 3 steps to know for sure

Termination of Employment

What happens when your workers don’t come back when they are due, and then what can you do?

By Andrew Hobbs on January 8th, 2018

Your Questions Answered: Can we recoup our training costs?

Termination of Employment

Can we recover training costs from an employee who has resigned? Can this cover travel and accommodation expenses for that training also?

By Andrew Hobbs on December 20th, 2017

This is why you must agree to a resignation date

Termination of Employment

Setting an agreed end-date for a worker who has resigned will help to avoid misunderstandings and, as in a recent case, a visit to the Fair Work Commission.

By Andrew Hobbs on November 1st, 2017

Resignation due to boss’s bad behaviour should be last resort

Termination of Employment

No claim for unfair dismissal unless all resolution avenues have been exhausted Resignation due to boss’s bad behaviour should be last resort

By Charles Power on May 3rd, 2017

Negotiating a termination of employment date with your worker

Termination of Employment

Negotiating a termination date with your worker - can you demand a shorter notice period than the one they request?

By Jeff Salton on September 28th, 2016

When can you put an employee on gardening leave?

Termination of Employment

Check your employment contracts before telling a worker to serve out their notice at home

By Charles Power on April 27th, 2016