Notice periods

What giving notice means

Giving notice means telling an employer or employee that the job is ending and when the last day of employment will be. For example, an employee resigns or an employer dismisses an employee.

The notice period is the time between:

• the day the employee or employer gives notice, and
• the employee’s last day of employment.

During the notice period, work carries on as normal unless another type of arrangement is agreed. For example, payment instead of notice or leave instead of notice (garden leave). This gives the employee and employer time to get ready for the employment ending, such as handing over work or planning next steps.

Last day of employment and last day at work

The last day of employment and the last day at work are not always the same.

The last day of employment is the end of the notice period. The employee’s last day at work could be before this, for example, if:

• they take leave towards the end of the notice period, or
• they are rostered to finish before their last day of employment.

Example of last day at work being earlier due to leave

For example, Rama gives 4 weeks’ notice on Monday 10 November. His last day of employment will be Friday 5 December.

Rama takes leave in the last 2 weeks of his notice period, from Monday 24 November to Friday 5 December.

This means his last day at work will be Friday 21 November. This is 2 weeks earlier than his last day of employment.

Example of last day at work being earlier due to roster

For example, Megan gives 4 weeks’ notice on Monday 10 November. Her last day of employment will be Friday 5 December.

Megan is only rostered on until Wednesday 3 December.

This means her last day at work will be Wednesday 3 December. This is 2 days earlier than her last day of employment.

When to give notice

An employee must give notice when they leave their job (resign). This includes when they retire. An employee can give notice while they are on leave, for example, annual holidays.

An employer must give notice when they dismiss an employee (unless it’s for serious misconduct) or make them redundant. The employer could be dismissing an employee for a number of reasons, including:

• poor performance
• misconduct
• medical reasons.

The employer must have followed all the dismissal rules before they dismiss an employee.

Dismissal

There are some situations when notice does not have to be given. It depends on the employment agreement and circumstances. This can apply to employees who:

• are fixed-term
• work casual hours, or
• are dismissed for serious misconduct.

Fixed term employees

A fixed-term agreement will finish on the end date or event that was agreed between the employer and employee. This means no one has to give notice because how and when the employment will end is already agreed. This includes if the employee is filling in for someone who is on parental leave and that person returns to work earlier than expected.

If the employee wants to leave the job earlier than the end of the fixed term agreement, they need to resign and give notice.

If the employer wants the employee to leave earlier than the end of the fixed term agreement, they must follow all the dismissal or redundancy rules.

Dismissal

Redundancy

Permanent or fixed-term employment

Employees who work casual hours

Employees who work casual hours do not usually have to give notice. This is because their employment ends each time they finish a period of work for their employer. For example, agreed shifts.

Employers also do not usually have to give notice, as they can just stop offering work after the employee finishes a period of work.

The employer or employee will have to give notice if:

• the employee has already started working or accepted an offer of work, or
• the employment agreement says that notice must be given.

Employees who are dismissed for serious misconduct

If an employer is dismissing an employee for serious misconduct, they do not have to give notice. This is called ‘instant dismissal’ or ‘summary dismissal’.

An employer can dismiss an employee without giving them notice if:

• there has been a fair investigation and
• there has been a disciplinary process, and
• the employee’s behaviour is considered to be serious misconduct.

If an employee is dismissed without notice, they:

• have to leave work right away, and
• are not paid for any part of the notice period (they can still get any statutory payments they are owed in their final pay, for example, annual holidays).

There does not have to be a specific clause in the employment agreement for this type of dismissal. However, having a clause in the agreement sets clear expectations for this situation.

For more information about serious misconduct, go to:

Misconduct

How much notice to give

The employment agreement usually says what the notice period is. If it does, this is the amount of notice that must be given.

For example, the employment agreement says the notice period is 4 weeks. For an employee who works Monday to Friday, this means:

• if notice is given on Monday 25 May, then
• the employee’s last day of employment will be Friday 21 June.

If there’s no notice period in the employment agreement, then reasonable notice must be given.

A shorter or longer notice period could also be agreed to.

If an employee is on parental leave or certain types of defence force leave, the notice period could be different.

If an employee does not want to work the notice period, for example, because they feel unsafe, they should talk to their employer. They can also seek legal advice if they need to.

Reasonable notice

Reasonable notice is given when there’s no notice period in the employment agreement.

There’s no set timeframe for a reasonable notice period. Employers and employees must act in good faith when deciding what’s reasonable. This means discussing together how long reasonable notice should be and why.

Generally 2 to 4 weeks is seen as reasonable. However, this will depend on:

• the type of job and how long it will take to find someone else, for example, if it’s a specialised role
• how much training someone will need to take over the role
• how long the employee has been in the job
• how easy it will be for the employee to find another job
• what usually happens in that industry, sector or workplace.

If an employee is being made redundant

If an employee is being made redundant, the ‘reasonable notice’ period will also depend on the reason for the redundancy. Usually it will still be at least 2 to 4 weeks, however if:

• the business is being sold or transferred, the notice period will depend on the sale date (and there are also rules for specified employees), or
• the employer goes into liquidation or bankruptcy, there is often no notice.

For information about redundancy and the process you need to follow, go to:

Redundancy

Want a shorter notice period

If an employer or employee want a shorter notice period, both must agree.

If they both agree, the shorter notice period should be recorded in writing.

If they do not agree, the employee must work the notice period that’s in the employment agreement. If there’s no notice period in the agreement, they must work the notice period that was:

• previously agreed by the employer and employee, or
• given when notice was first provided.

Example of a shorter notice period

The employment agreement says the notice period should be 4 weeks. The employee wants to leave early because they’ve found another job.

The employee talks to the employer about having a shorter notice period. The employer and employee agree that the notice period will be 3 weeks instead.

This means the employee will end their employment in 3 weeks instead of 4 weeks.

Want a longer notice period

If an employer or employee want a longer notice period, both must agree.

If they both agree, the longer notice period should be recorded in writing.

If they do not agree, the employee must work the notice period that’s in the employment agreement. If there’s no notice period in the agreement, they must work the notice period that was:

• previously agreed by the employer and employee, or
• given when notice was first provided.

Exceptions for parental leave and certain types of defence force leave

The notice period is different for employees who are on parental leave or certain types of defence force leave.

To find out about the notice period for these types of leave, go to:

Covering parental leave and employees returning to work

Defence force volunteers

How to give notice

The employment agreement will usually say how to give notice (most agreements say to do this in writing).

If there’s nothing in the employment agreement, it’s best to give notice in writing. This means there is a clear record of when notice was given.

The most common ways to give notice are an email or a short letter. We do not recommend giving notice by text or over social media because it could be deleted or misunderstood.

What employees should include in the written notice

When an employee gives notice, they should state:

• that the employment is ending, and
• when the last day of employment will be (based on the notice period).

There is a resignation letter template employees can use on the ‘Resignation’ page.

Resignation

What employers should include in the written notice

When an employer gives notice, they should state:

• that the employment is ending
• when the last day of employment will be (based on the notice period)
• the reason the employment is ending
• whether the employee is expected to work during all or part of the notice period
• if there’s anything that needs to be done before the employee leaves, for example, handing over work and returning company property
• that final pay will be calculated and paid, and
• whether they will provide a statement of service or reference.

There are sample letters employers can use to dismiss an employee on the ‘Dismissal’ page.

Dismissal

During the notice period

If an employee works during the notice period:

• the employer and employee should agree a plan for managing work and responsibilities
• the employer must pay the employee correctly
• the employee can take leave in the usual way, for example, sick leave or annual holidays, and
• the employer and employee must continue to meet their employment rights and responsibilities.

Managing work and responsibilities

During the notice period the employer and employee should:

• make sure any outstanding tasks are completed
• work together to assign and handover any ongoing work to someone else
• organise and record any important files, tools and processes so that others know where to find things
• prepare for the employee’s last day at work.

The employer can also limit the employee’s access to workplace systems, information, clients or property. This is usually to protect confidential or commercially sensitive information.

If an employee wants to work from home during the notice period, they must talk to their employer or ask for flexible working arrangements.

Asking for flexible working arrangements

Taking leave during the notice period

The employee can ask to take paid leave during the notice period if they have an entitlement they have not used. For example, sick leave, annual holidays or alternative holidays.

If the employee has asked to take annual leave or alternative holidays, the employer can say no if there is a good reason. For example, they might say no if it would make it difficult to handover to the next person.

The employee must be paid for any leave they take during the notice period.

An employer can only make an employee take annual holidays or alternative holidays in certain situations. To find out about these situations, go to:

Taking annual holidays

Alternative holidays

When leave is not counted as part of the notice period

Some employment agreements say that time on leave or holidays is not counted in the notice period. For example, if the employee takes 5 days annual holidays, those 5 days are not counted as part of the notice period. This means the notice period could be longer than expected.

Employees and employers should check the employment agreement to see if it says anything about this that could affect:

• the length of the notice period, and
• what the last day of employment would be.

Payment or garden leave instead of notice

Sometimes the notice period is not worked because the employer and employee agree to a different arrangement.

The employee could:

• be paid out instead of working (this is called ‘payment in lieu of notice’), or
• go on leave instead of working (this is called ‘leave in lieu of notice’ or ‘garden leave’).

Payment in lieu of notice

Payment in lieu of (instead of) notice means:

• the employee’s employment ends when notice is given, and
• they are paid out for the notice period instead of working it.

There must be some form of agreement to payment in lieu of notice. This could be through a clause in the employment agreement or it’s agreed to when notice is given.

Agreement should be recorded in writing and the payment is made in the employee’s final pay.

Final pay

Leave in lieu of notice

Leave in lieu of (instead of) notice is when an employee goes on leave instead of working the notice period. It’s also known as ‘garden leave’. The employee is still employed and paid for the notice period but does not go to work.

Garden leave is different from annual holidays — it does not use annual holiday entitlement.

There must be some form of agreement to leave in lieu of notice. This could be through a clause in the employment agreement or it’s agreed to when notice is given. Agreement must be recorded in writing.

Leave in lieu of notice

What happens at the end of the notice period

When the notice period ends, the employment relationship finishes. There are a few things both the employer and employee need to do.

Final pay

The employer must pay the employee their final pay, which includes their:

• final wages
• holiday pay, and
• any other payments they’re owed.

Final pay

Last day and reference

On the employee’s last day, the employer and employee both have tasks they need to complete. For example, organising to return company property or setting up ‘out of office’ messages.

The employee can also ask for a statement of service and a reference. The employer should provide a statement of service. They do not have to provide a reference unless they’ve agreed to this.

On or after last day of employment

If there are problems with notice

Find out what can be done if an employer or employee has issues with notice.

Issues with an employee giving notice

If an employee does not give enough notice, the employer only has to pay them for the days they:

• actually worked during the notice period, and
• took paid leave or holidays (that the employer approved) during the notice period.

If an employee does not give any notice, the employer does not have to pay them for the notice period, unless there is an agreed arrangement. For example, garden leave or payment instead of notice.

When an employer can deduct money from an employee’s pay

An employer can only deduct money from an employee’s pay, wages or holiday pay if:

• the employee does not work some or all of the notice period
• the amount deducted is based on the employer’s actual loss because the employee did not work the full notice period, and
• the employee agrees to the deduction in writing, or the employment agreement has a valid deduction clause.

Deductions and premiums

What an employer should do if no notice is given

An employee could leave their job and not give notice, for example, they:

• do not show up for work and do not make contact to explain why
• resign in the heat of the moment and want to leave straight away.

The employer should do their best to find out why the employee has left so suddenly. If it’s because of an employment issue, the employer may be able to take steps to resolve it.

If the employee is absent from work for a long time without an explanation, they may have abandoned their employment.

Steps to resolve problems

Abandonment of employment

If an employer dismisses an employee without notice

An employer must give an employee notice when they dismiss them. The only time they do not have to give notice is when they have dismissed the employee for serious misconduct.

An employee can raise a personal grievance if:

• the employer does not give notice, and
• there is no agreed arrangement, for example, payment in lieu of notice or garden leave.

Personal grievance

A personal grievance:

• is an action an employee can take against a current or former employer, and
• is raised when there is an employment issue that cannot be resolved.

Employees will need to raise a personal grievance within a certain timeframe.

We recommend employees seek legal advice before they raise a personal grievance.

Personal grievances