What You Need to Know About Employee Notice Periods

When an employee suddenly resigns or you need to let someone go, one of the first questions that comes up is: 'How much notice should be given?'

Notice periods can feel confusing, especially when you’re juggling contracts, awards, and the Fair Work Act. But once you understand the rules and how to apply them, they can help you manage staff transitions smoothly and fairly.

In this article, we’ll look at:

• What a notice period actually is

• Statutory notice periods under the National Employment Standards (NES)

• What happens if notice isn’t given

• Payment in lieu of notice

• How to make notice periods work for your business

What are Employee Notice Periods?

A notice period is the time between when an employee resigns or their termination is announced, and when employment officially ends.

It provides:

• Time for you as the employer – to organise recruitment, plan handovers, and minimise disruption.

• Time for the employee – to finalise their workload, complete a handover, and leave on professional terms.

Without a clear notice period, you risk being caught short with staffing gaps and operational challenges.

Statutory Notice Periods Under the NES

The Fair Work Act 2009 sets out minimum notice periods under the National Employment Standards (NES).

These apply whether the employee resigns or you terminate their employment (unless they are dismissed for serious misconduct).

Here is the minimum notice an employee must give if they resign:

• Less than 1 year of service → 1 week

• 1 to 3 years of service → 2 weeks

• 3 to 5 years of service → 3 weeks

• More than 5 years of service → 4 weeks

  
  

There is one important addition. If the employee is over 45 years old and has worked for you for at least 2 years, they must be given an extra week of notice (where the employer initiates the termination).

These are the minimums set out by law, but keep in mind that contracts and awards may set different requirements. Always check the employee’s contract / agreement and the relevant award before making a decision.

Can Employers Require More Notice?

Yes, contracts can specify longer notice periods. For example, you may set a 4-week notice period for senior or specialised staff to ensure a proper handover.

The key is to ensure the notice requirement is reasonable and clearly stated in the employment contract.

While a longer notice period can benefit your business when an employee resigns, keep in mind it also applies if you terminate employment, even for underperformance or misconduct (unless the dismissal is for serious misconduct, where no notice is required).

💡 Best Practice Tip: Reserve longer notice periods for roles where a handover is critical to business continuity (e.g. managers or technical specialists). For junior or casual staff, shorter notice is often more practical, keeping your business flexible and avoiding the risk of paying out extended notice unnecessarily.

What If an Employee Does Not Give Enough Notice?

If an employee resigns without providing the required notice, you may be entitled to withhold pay in lieu of notice, but only if this right is expressly written into their contract or award.

For example, if someone was required to give two weeks’ notice but walked out immediately, you may be able to deduct up to two weeks’ wages from their final pay.

That said, it's always wise to think carefully about how you handle this. An employee who is 'checked out' can lower morale, so if an employee is unhappy and wants to leave quickly, forcing them to stay can cause more harm than good and create further disruption. Sometimes it is better to let them go and focus your energy on moving forward.

Payment in Lieu of Notice

Instead of having an employee work through their notice period, you can choose to make a payment in lieu of notice. This means you pay them the amount they would have earned had they worked their notice, and their employment ends immediately.

Payment in lieu can be useful when:

• You need to protect sensitive business information.

• The employee’s presence may disrupt the team.

• You want to move quickly with recruitment or restructuring.

Just remember: the payment must cover the full notice period, including base pay, loadings, allowances, and any other contractual entitlements.

Making Notice Periods Work for Your Business

Here are some simple steps you can take to stay on top of notice periods:

• Review employment contracts regularly to ensure notice clauses are clear and compliant.

• Keep up to date with award requirements so you know where you stand.

• Plan handovers as soon as notice is given to minimise disruption.

• Be open to negotiating notice if it makes sense - shortening or extending notice can sometimes help both parties.

• Use the notice period as a chance to conduct exit interviews and gather feedback.

Final Thoughts

Notice periods don’t have to be a headache. With clear contracts, a solid understanding of the requirements, and a practical approach, they can help you handle staff transitions smoothly and professionally.

If you’re unsure whether your contracts are compliant, or you’ve been caught out by sudden resignations before, this is exactly the kind of issue we help small business owners with.

We can review your documents, give you clarity on what Fair Work and the NES requires, and set up simple processes that make resignations and terminations more straight forward.

Book a free discovery call today, and let’s take the HR off your plate so you can focus on growing your business.

Get in Touch

Need help? Contact us today - sandra@hrconsultingtas.com.au or 0408 408 225  

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