29 Jun NES Series: Notice of Termination
The Fair Work Act 2009 (Cth) sets out base employee entitlements for notice periods on termination of employment by employers.
This article is the third in a series of articles outlining the operation of various National Employment Standards under the Fair Work Act 2009 (Cth).
The Fair Work Act 2009 (Cth) (“Fair Work Act”) sets out employers’ base obligations of notice periods they are required to provide when terminating an employee’s employment. These are minimum obligations and can, in certain circumstances, be supplemented by industrial instruments and other agreements between employers and employees.
Who do these provisions apply to?
The notice of termination provisions cover all employees caught by the Fair Work Act, except for those:
- employed for a specified period of time;
- employed for a specified task or for the duration of a specific season;
- whose employment is terminated because of serious misconduct;
- who are casual employees;
- to whom a training arrangement applies (except an apprentice) and whose employment is for a specified period of time or is, for any reason, limited to the duration of the training arrangement; or
- who are prescribed by the relevant regulations as not being covered by the notice of termination provisions.
Where do your obligations arise from?
The Fair Work Act sets out the minimum notice periods required to be given where an employer terminates an employee’s employment, and are set out in the below table (taken from the Fair Work Act):
Employee’s period of continuous service with the employer at the end of the day the notice is given
|Not more than one year
|More than one year but not more than three years
|More than three years but not more than five years
|More than five years
If an employee is over 45 years old and has completed at least two years’ of continuous service, they are entitled to an additional week’s notice. Such notice periods can either be worked out, or they can be paid out in lieu of working out that notice period.
Under the Fair Work Act, there is no obligation for employees to provide any kind of notice period. However, other instruments or documents may set out such obligations.
If an industrial instrument such as a Modern Award or Enterprise Agreement covers an employee, that instrument may set out different notice periods to be complied with. For example, the Air Pilots Award 2010 provides for different and longer notice periods than those set out in the Fair Work Act, and requires employees to provide the same periods of notice as their employer, where they choose to resign from their employment.
Further, other documents such as employment contracts may provide for different notice periods again. However, they will only apply to the extent that they are more generous than the Fair Work Act, or an industrial instrument (if applicable). For example, an employee not covered by an industrial instrument may have a notice period of four weeks in their employment contract regardless of their length of service (required to be given by either the employer or the employee when terminating employment), which would be lawful in those circumstances.
Getting it wrong
Failing to provide the appropriate notice period can result in a breach of the National Employment Standards or a breach of an industrial instrument, resulting in penalties. For example, in Cerin v ACI Operations Pty Ltd and Others  FCCA 2762, the failure by an employer to give the required five weeks’ notice under the Fair Work Act (instead giving 28 days’ notice under the Workers Rehabilitation and Compensation Act 1986 (SA)) resulted in penalties of $20,400.00 for the employer and $1,020.00 for the HR Manager involved in the contravention being paid to the employee.
Getting notice periods right is not a difficult process, but is nonetheless an important process to ensure your employees are receiving their correct entitlements. If you are concerned about your employees’ termination entitlements, or want to ensure your notice periods are correct, please contact us.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.