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Deducting pay for lack of notice upon resignation

Q: If an employee resigns and doesn’t provide the notice period required in the employment contract or award, is the employer able make any deductions from their final pay and entitlements in lieu of notice?

A: It depends on the employee’s award coverage (if any). Many awards provide that where an employee resigns and refuses to serve notice, the employer may deduct award wages that the employee would have earned if they had served notice from award wages that are otherwise due.

However, if the applicable award does not provide for this or no award applies, then essentially you can’t make any deductions. In this situation, if they have worked the time before giving notice, you need to pay them for that time. Obviously for the period of notice not worked, they are not paid.

There may also be other potential deductions available to you under the contract and any applicable award, but you should ensure that they are permitted deductions under the Fair Work Act 2009 (Cth).

Please note: The answer is correct at the time of publishing. Be aware that laws may change over time. Refer to Resignation for current advice.

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