Notice periods when employment ends can seem straightforward until an employee resigns with too little notice, wants to take annual leave during their notice period, or the employee/employer does not want the employee to work out their notice period.

It can be even more confusing when an employee decides to give much more notice than they are expected to give. A recent Fair Work Commission case has highlighted the possible difficulties business may experience with reducing excessive notice.

For employers, understanding the minimum legal requirements and how to manage notice related issues consistently is essential to reducing risk and maintaining positive workplace relations.

Minimum notice periods for award covered employees

Under the National Employment Standards (NES), employers must provide minimum notice of termination to permanent employees when ending employment, unless an exception applies, such as dismissal for serious misconduct. The required notice depends on the employee’s length of service and age, and notice periods range from one to five weeks.

However, when an employee resigns, there is no NES requirement for them to provide notice. Instead, the required notice period is usually determined by:

• an applicable modern award;
• an enterprise agreement; or
• the employee’s contract of employment.

Under most modern awards, the notice that an employee is to provide is the same as what the employer must provide, without the need to provide more notice due to the employee’s age.

Under employment contracts, notice periods cannot be less than the award requirement, but parties can genuinely agree to more notice.

Where no award, agreement or contract applies, employees are generally expected to provide “reasonable notice,” although this can be difficult to enforce in practice.

Importantly, employers should check the applicable award or agreement carefully, as notice obligations can differ between industries and classifications.

Award, agreement free employees and casuals

For award and agreement free employees, notice obligations will usually come from the employment contract. If there is no contractual provision, disputes can arise regarding what constitutes reasonable notice.

Casual employees are not required to give notice of their intention to resign under a modern award, just as employers are not required to give notice to casual employees under the NES. Despite this, it is best practice for employers to give their casual employees notice of their last day.

Employers should avoid assuming that notice obligations apply uniformly across all employee types. Employment status and industrial coverage matter.

Can employers deduct pay if an employee does not give enough notice?

Many modern awards contain clauses allowing employers to deduct up to one week’s wages from an employee who is over 18 years old and fails to provide the required notice.

However, deductions can only occur where:

• the applicable award or agreement expressly permits the deduction; and
• the deduction complies with the Fair Work Act requirements regarding lawful deductions.

The deduction can only be taken from wages for hours worked, not from accrued leave entitlements or other termination payments.

Employers cannot simply withhold wages because they are frustrated by a short notice resignation. Unlawful deductions can create underpayment and compliance risks. Additionally, deductions generally cannot reduce an employee’s pay below minimum entitlements for hours already worked.

Where no award or agreement provision exists, deductions should not occur unless there is clear written employee authorisation that complies with the Fair Work Act. The NES does not provide for the withholding of unworked notice in the absence of an award condition.

Ending employment early or paying in lieu of notice

When an employee resigns and provides notice, employers may decide they do not want the employee to work through the full notice period. In these situations, employers should proceed carefully.

If the employer mutually agrees with the employee not to work the remainder of their notice period, the employer will need to pay the employee for the balance of the notice period they would otherwise have worked.

This is particularly important because preventing an employee from working through their resignation period without payment may create legal risk, including arguments that the employer effectively terminated the employment earlier than intended. Claims of an unfair dismissal have been accepted in circumstances where an employee has resigned but the employer ended the notice period early and without the employee’s agreement.

Taking leave during a notice period

Employees may request to take annual leave during their notice period, and employers can generally agree to this arrangement. However, employers should ensure the leave request is properly approved in writing. An employer generally cannot force an employee to use annual leave during a notice period.

Personal leave during a notice period can still be accessed where the employee is genuinely unfit for work and provides any required evidence.

Employers should avoid blanket assumptions that leave entitlements stop once notice is given. Employment continues until the final date of employment unless otherwise agreed.

Longer notice periods

Occasionally an employee may offer significantly more notice than required. For example, employees may offer three months’ notice instead of the contractual four weeks, to assist with a transition period or, in some cases, knowing that they plan to take leave over that period and want to stretch out payment of their accrued entitlements.

Employers do not need to simply accept a longer notice period when offered, and they should consider the terms by which they would agree e.g. contingent upon finding a replacement.

Importantly, if the employer accepts the extended notice arrangement, it may become a binding agreement between the parties. This means the employee may not automatically be entitled to later shorten the notice period without employer agreement. Equally, employers should avoid assuming they can later reduce the agreed notice period without considering payment obligations, contractual risks or risks of an unfair dismissal claim.

Where either party later wishes to change an agreed extended notice arrangement, the best approach is to document any revised agreement in writing and ensure both parties clearly consent.

If an employer wishes to end the employment earlier than an agreed notice end date, paying out the balance of the agreed notice period will generally reduce risk.

Case example before the Fair Work Commission

In a Fair Work Commission decision handed down in June 2026, the Commission found an employee who resigned with eight weeks’ notice had nonetheless been dismissed when his employer decided to end his employment immediately. Although the employee was only contractually required to provide three weeks’ notice, he chose to give a longer notice period. Instead of allowing him to work through to his nominated end date, or reaching agreement to shorten the notice period, the employer terminated his employment immediately and paid him three weeks’ pay in lieu of notice.

The Commission held that, by unilaterally bringing the employment to an earlier end than the employee had nominated, the employer had terminated the employment at its own initiative. The payment of the contractual notice entitlement did not change that outcome. Where an employer elects to cut short an employee’s resignation without the employee’s agreement, it may be the employer and not the employee, who is taken to have ended the employment relationship.

Importantly, this decision was limited to the preliminary question of jurisdiction. The Commission did not determine whether the dismissal was unfair, only that the employee had been dismissed and was therefore entitled to pursue an unfair dismissal claim. Nevertheless, the case is a timely reminder that employers should exercise caution before shortening an employee’s notice period without mutual agreement, even where the employee has already resigned.

Rowan Cassidy v Challenge Pumps Pty Ltd [2026]

Key takeaways for employers

Notice periods are not simply an administrative process, they can create significant payroll, compliance and employee relations risks if handled incorrectly.

Before acting, Employers should always check:

• the applicable modern award or enterprise agreement;
• the employment contract;
• any written resignation correspondence; and
• whether any agreed variations have been documented.

Clear communication, written confirmation of arrangements and consistency in approach can help avoid disputes and ensure compliance with Fair Work obligations.

How can Business Chamber Queensland help?    

Business Chamber Queensland’s Workplace Advisory team can support employers with notice period obligations, resignation management, award and contract interpretation, and broader workplace compliance matters to help reduce legal and employee relations risks.

Business Chamber Queensland members with HR services as part of their membership are invited to contact the Workplace Advisory Services team.  Businesses who do not have a HR membership may also seek assistance however a competitive consultancy fee will apply for any advice and assistance provided.