What happens if the employee does not give sufficient notice or if they just do not want to work out their notice?
An employee may request that the notice period be waived. This can be mutually agreed between the employee and employer and the employee would go off on their happy way.
Some Awards, Enterprise Agreement or contracts may allow the employer to deduct monies from the employee’s final pay, equivalent to the notice not given. An example of this is in the Banking, Finance and Insurance Award 2010:
| 11.2 Notice of termination by an employee
… If an employee fails to give the required notice the employer may withhold from any monies due to the employee on termination under this award or the NES, an amount not exceeding the amount the employee would have been paid under this award in respect of the period of notice required by this clause less any period of notice actually given by the employee. |
If your award or EBA does not have one of these clauses then you can’t deduct from the employees final pay.
Here are the steps you should follow when deducting money for failing to provide notice:
Step 1 – Work out what the net amount of the employees termination pay is (without the deduction of notice)
Step 2 – Work out the value of the notice period not given in dollars. We are interested in the gross amount (not net)
Step 3 – Deduct the gross amount of the notice not given from the net amount of the final payment.