Most people don’t like to think or talk about it, but it’s an inevitability that all employment relationships will terminate at some point.  Without trivialising it, for everyone the end of the employment relationship is really just a question of when, how, and why.  With that in mind, here’s five commonly misunderstood legal realties arising from a decision to terminate an employment relationship. 

1. Giving notice is a unilateral event 

Although some employers talk of ‘accepting’ an employee’s resignation, the right to give notice is exercised unilaterally.  It doesn’t require the other party to accept the notice given, and any attempt to reject the notice given is of no effect.  

2. Notice can’t be unilaterally withdrawn 

Once given, notice of termination can only be withdrawn by agreement.  On occasion, an employer might give a resigning employee an opportunity to withdraw or reconsider their resignation, but this is primarily to manage risks associated with a constructive dismissal (not because of any right an employee has to withdraw their resignation).  Similarly, if an employer has given notice but later wants to retain the employee (for example, where a redeployment opportunity has arisen after notice of redundancy was given), the employee will need to agree for the original notice to become ineffective.   

3. How you give notice is important

In addition to employment contracts typically providing that notice is to be given in writing, the National Employment Standards (“NES“) prescribes that an employer must not terminate an employee’s employment unless they have given the employee written notice of the termination date (which can’t be before the day the notice is given).   

4. The timing of termination payments (including a payment in lieu of notice) is important

While many awards provide that termination payments must be paid within 7 days of the day the employment terminates, the NES prescribes that an employer must not terminate an employee’s employment (by making a payment in lieu of notice) unless the employer has actually made the payment.  In other words, the payment in lieu of notice must be paid at the time the termination of employment occurs.  Similarly, the NES also require statutory entitlements to annual leave to be paid at the time of termination (not within 7 days after). 

5. The amount of notice is important

It’s common in Australia for most employment contracts to require each party to provide one months’ notice of termination.  Despite this, the NES set out the minimum notice period that must be provided by an employer before terminating an employee’s employment.  While one months’ notice will exceed the minimum statutory notice period in most situations, an employee who is over 45 years, with more than 5 years’ service, is entitled to a minimum of 5 weeks’ notice.  For these employees, simply providing the contractual one months’ notice will be inadequate to meet the employer’s obligation under the NES.  

Not just “technicalities” 

Although the above legal realities are often talked about as “technicalities”, misunderstanding them can have material consequences for employers, including the imposition of civil penalties in relation to a failure to comply with the NES.   

Further, we are continuing to see an increasing tendency for dismissed employees to identify and assert breaches of these requirements as part of a broader claim relating to the termination of their employment.  By doing so, an employee with an otherwise marginal claim can introduce an element where they’re guaranteed a win, and an outcome that at least involves the imposition of a civil penalty.