Employees decide to leave their employer for various reasons and at times it can be disappointing to see them go. On the termination of employment, whether by resignation, dismissal or redundancy, it is important to follow the relevant Fair Work Act rules. This is the first of three articles, explaining termination procedures businesses need to follow when ending employment.
The following steps are a guide to help employers deal with an employee resignation:
Confirm the resignation
When an employee tenders their resignation, their given notice period should be checked in line with their employment contract, industrial agreement or modern award.
Even if the employee provides notice of resignation verbally, request that the resignation is also made in writing by way of a signed letter, which details the date of the resignation and their last intended working day. It is best practice to also confirm the company’s acceptance of the employee’s resignation in writing, by way of email or letter to the employee.
Working out the notice period
Generally, most resigned employees work out their notice period completing their normal role and assisting with handover to a new employee. However, at times, it is not in the best interests of the business nor other employees to have a resigned employee work out their notice period.
If this is the case, it is best to mutually agree to pay out the notice period and have the employee finish up on the day the resignation is received. Payment in lieu of notice means that the employee will be paid the full amount they would have received if they worked until the end of their notice period, and includes:
- incentive-based payments and bonuses
- loadings
- monetary allowances
- overtime
- penalty rates
- any other separately identifiable amounts
If required, employers can also ask an employee to work part of their notice, and pay out the remainder of the period.
Tying up loose ends
In the last week or so of the employee’s tenure, ask the employee to complete an exit interview with a HR representative or manager. Exit interviews are a great source of feedback from an employee to assist the business to learn and grow, and could assist in preventing future staff turnover.
Don’t forget to check what company equipment has been issued to the employee, and ensure that everything is returned on, or before their last day. Its also a good idea to formally remind the exiting employee of their obligations under their employment contract which may include confidentiality, IP, and restraint of trade clauses.
The employee’s final pay should be paid to them on their last day, or within 7 days of their last working day, unless otherwise stipulated in the applicable award, agreement or contract.
If you need assistance with your employee termination process, contact our specialist team for a no obligation chat today.