Navigating Unexpected Employee Resignations: Rights, Responsibilities, and Tips for Employers.

It’s a scenario no employer wants to face: an employee abruptly resigning without providing any notice. This unexpected departure can leave employers grappling with questions about their rights, responsibilities, and how to manage the situation effectively.

According to the AHRI’s Quarterly Australian Work Outlook, overall, the average employee turnover for the 12 months to the end of April 2023 was reported at 12%. 1

 

What does it mean to quit?

There are a few different terms; it is also referred to as exit, quit, give notice, resignation, conclusion, and departure. For the purpose of this blog we will use “conclusion” to mean both voluntary or involuntary.

Basically conclusion  refers to the voluntary or sometimes involuntary act of when an employer and employee relationship ends. 

This decision is typically communicated to the employer in writing.

 

Voluntary versus involuntary conclusion.

Voluntary resignation

Employees may choose to resign for various reasons, such as finding a new job opportunity, pay or conditions, pursuing further education, moving location, or addressing personal circumstances.

This is referred to as voluntary resignation and could be one of the following situations:

• Resignation: an employee may choose to resign from their position and provide written notice of their intention to leave. The notice period is set out in the National Employment Standards (NES).  If you do not need the employee to work their notice period, you can pay them in lieu of notice and let them leave early. You may also wish to negotiate a longer resignation period to cover periods or recruitment, finalise a project or enable handover.
  
  
• Retirement: As employee reaches a certain age or stage in their personal or professional life, they may wish to commence phased or transition to retirement. Phased retirement is a flexible working arrangement in which employees ease out of employment by way of reducing the number of hours worked, or by changing their responsibilities or employment arrangements. The arrangement initiated by an employee and the details of the retirement plan should be in writing.
  
  
• End of Contract/Temporary Position: Where an employee has been engaged on a temporary or fixed term contract, an employer may need to conclude the employment relationship on the date specified in the employment contract or extension documentation. If you are thinking about dismissing an employee, you must make sure that you are acting fairly and lawfully by providing the employee with notice of the end of their employment and processing their final pay accordingly. The relevant notice period is set out in the National Employment Standards (NES). An award or employment contract may also outline provisions at the end of the employment contract.

Involuntary resignation

However, there can be times when an employer may choose to end employment for various reasons such as performance, change in business direction or financial implications, or personal circumstances.

This is referred to as involuntary separation and could be one of the following situations:

• Conclusion during probation:  where an employee does not satisfactorily met expectations during probation an employer may conclude the employment relationship. The notice period is set out in the National Employment Standards (NES).  If you are thinking about dismissing an employee, you must make sure you’re acting fairly and lawfully and following a process whereby you outline the concerns with the employee and they are given a reasonable timeframe to improve. If you dismiss an employee, they can challenge the dismissal with the Fair Work Commission if they think it was unfair or the correct process was not followed. There is a qualifying period of six months or twelve months for a small business to be able to make an unfair dismissal claim.
  
  
• Underperformance: An employer may need to dismiss an employee because of poor performance or behaviour. The relevant notice period is set out in the National Employment Standards (NES). If you are thinking about dismissing an employee, you must make sure you are acting fairly and lawfully by following a process whereby you outline the concerns with the employee and they are given a reasonable timeframe to improve. If you dismiss an employee, they can challenge the dismissal with the Fair Work Commission if they think it was unfair or the correct process was not followed.
  
  
• Ill Health: An employer may need to dismiss an employee because of physical, mental or psychological health conditions that prevent the individual from performing the inherent requirements of their position. The relevant notice period is set out in the National Employment Standards (NES). If you are thinking about dismissing an employee, you must make sure you’re acting fairly and lawfully by following a process whereby you seek further information from a treating practitioner before making modifications to work conditions or ending the employment relationship. Unlike WorkCover, an employer is not obliged to find an employee an alternative position or duties. If you dismiss an employee, they can challenge the dismissal with the Fair Work Commission if they think it was unfair or the correct process was not followed.
  
  
• Redundancy: A position usually becomes redundant when an employer either doesn’t need some or all of the tasks to be completed anymore. This may be because a product or service is no longer being offered or through the introduction of technology. Employees may be entitled to redundancy benefits depending on their length of service and the award, agreement or contract they were employed under. 
  
  
• Dismissal: similar to termination, dismissal occurs when an employee is let go for serious misconduct or a breach of employment terms.

• Abandonment of employment: An employer may need to conclude an employee where there has been an abandonment of employment. The phrase ‘abandonment of employment’ is an expression used to describe a situation where an employee ceases to attend his or her place of employment, without proper excuse or explanation for a defined period of time, and as a result shows an unwillingness or inability to perform his or her obligations under the employment contract.
  
  If you are thinking about dismissing an employee, you must make sure you are acting fairly and lawfully by following a process whereby you make attempts to make contact with the employee before any decision is made. If you dismiss an employee, they can challenge the dismissal with the Fair Work Commission if they think it was unfair or the correct process was not followed.

• Unavailability of employee. Where an employee has been unavailable for work for an extended period of time, an employer may conclude the employment relationship with an employee. Usually the period of unavailability is for a period of 3, 6 or 12 months time and usually refers to a casual employment relationship. If you are thinking about dismissing an employee, you must make sure that you are acting fairly and lawfully by following a process of communicating with the employee about the change in their employment relationship. If you dismiss an employee, they can challenge the dismissal with the Fair Work Commission if they think it was unfair or the correct process was not followed.

Further conclusion types

There are other types of ways in which an employee can exit from the business including death, termination due to vaccination requirements and an employee who can no longer perform the inherent requirements of the role and are receiving WorkCover payments. We do not cover off on these types due to the specific requirements and it is best to seek specialist advice prior to processing.

It’s important to note that the specific circumstances surrounding the end of an employment relationship can vary based on local employment laws and the terms outlined in the employment contract. Employers and employees alike are encouraged to follow proper procedures and adhere to legal requirements when ending an employment relationship.

 

Let’s take a closer look at terms of employment surrounding the conclusion.

Notice Periods

The national employment standards outline the required notice periods depending on probation and length of employment. These notice periods are usually outlined in employment contracts or relevant policies and procedures. It is possible to negotiate a lesser period of notice and in some instances an employee might quit without notice.

Withholding Wages

Withholding wages should be approached cautiously. Employers generally cannot withhold earned wages unless there are explicit provisions in the employment contract allowing for specific deductions, such as unpaid loans or agreed-upon penalties. Using wage withholding as a punitive measure is often legally questionable and may lead to legal consequences for the employer.  Or if the employee acknowledges and agrees in writing and it is principally for their benefit. The final pay can also only be withheld from wages, and not from leave entitlements.

Using wage withholding as a punitive measure is often legally questionable and may lead to legal consequences for the employer.It is best to seek specialist advice if there are issues with processing a timely pay to ensure you don’t get penalised for getting it wrong.

Timing of Final Payment

Regardless of the circumstances surrounding the departure, employees are entitled to their final payment. This should include any outstanding wages, accrued leave, and benefits owed to them. 

Most awards require employers to pay employees their final payment within seven days of the employment ending. Employment contracts, enterprise agreements or other registered agreements can also specify when the final pay must be paid.   

If an employee’s award, contract or agreement doesn’t say when an employee’s final pay must be paid, then it is best practice for an employee to be paid on their last day of work or on the next scheduled pay run depending on the reasons for the employment ending.

 

Now that we know a little more about the various definitions and the terms around conclusion, how do we manage that situation when an employee simply quits.

Communication

Initiate a candid and respectful conversation with the departing employee to understand their reasons for leaving without notice. While emotions may run high, maintaining open communication can provide valuable insights into potential workplace issues that might need addressing. This conversation can also contribute to a smoother transition, even if it is still a quick one. Taking into consideration their reasons for leaving and quickly, there is potential to negotiate times that they are available after they finish up, to answer any questions or provide necessary handover information.

Documentation

Thoroughly document the resignation process. Keep records of any discussions, emails, or reasons provided by the departing employee. This documentation can serve as a valuable resource in case of legal inquiries, disputes, or if the need arises to revisit the circumstances surrounding the departure.

Resourcing Options

Quickly assess the impact of the departure on the team and devise a resourcing plan. Consider redistributing responsibilities among existing employees (but be sure not to overload individuals unfairly), hiring temporary support, or implementing other solutions to ensure minimal disruption to ongoing projects and operations.

Know your Award

The specific requirements for conclusion can be different depending on the award, registered agreement or employment contract when ending their employment. It is important to know which instruments relate to your business and individual positions and apply them correctly.

 

In conclusion.

While unexpected resignations pose challenges, approaching the situation with a focus on legal compliance, open communication, and strategic planning is crucial. 

Understanding your rights and responsibilities as an employer not only helps in managing the immediate impact but also contributes to fostering a positive workplace culture in the long run.

1. https://www.ahri.com.au/wp-content/uploads/AHRI-report_15.5.23.pdf

The information provided in this document is for your guidance only and is general in nature. It does not constitute as legal advice. It is the responsibility of the individual to seek legal advice where required.

 …….

---

Sign up to Small Business Society and receive our newsletter each month plus other great resources to assist you on your Human Resources journey.

---