Employee Not Working Notice Period in Australia: Employer Options

It’s not uncommon for an employee to resign and then ask to finish immediately - or simply stop turning up. As a business owner, this can be stressful and disruptive, especially if you rely on that person to hand over work or train a replacement.

The good news is you have options. Australian employment law sets out minimum rules for notice periods, final pay and what you can (and can’t) do if an employee won’t work their notice.

In this guide, we’ll walk through your legal rights and practical steps when an employee refuses to work their notice period, so you can manage risk, stay compliant, and keep your operations on track.

What Does The Notice Period Mean Under Australian Law?

The National Employment Standards (NES) in the Fair Work Act set minimum notice periods for termination, and many awards or enterprise agreements add more detail. When an employee resigns, their contract typically sets the notice they must give. If their contract is silent, check any applicable award or enterprise agreement.

Notice periods serve two purposes: they give you time to organise a handover, and they ensure employees have certainty about their finishing date and final pay. If you’re unsure what applies in your workplace, start by reviewing the Employment Contract and your internal policies.

It’s also worth revisiting how resignation notice periods work in practice, including when different lengths of notice can apply for senior roles or award-covered employees.

Common Scenarios: When An Employee Won’t Work Their Notice

There are a few recurring situations we see when employees don’t complete their notice period:

• Immediate resignation without notice: The employee resigns with effect “today” and doesn’t offer to work any days of notice.
• Partial notice then stops attending: They start the notice period but then stop coming to work or stop engaging.
• Request to offset with leave: The employee wants to use annual leave or time off in lieu instead of attending work during notice.
• Health or safety concerns: They present a medical certificate indicating they can’t work during the notice period.
• Performance or conduct issues: On resignation, there’s ongoing misconduct or performance action that complicates whether they should remain in the workplace.

Your approach will vary depending on the scenario, what the contract says, any applicable award, and what’s most practical for your business.

Employer Options If The Employee Won’t Work Notice

There isn’t a one-size-fits-all response. Consider the legal position, operational impact and reputational factors before deciding what to do.

1) Negotiate An Agreed Early Finish

In many cases, a quick conversation solves it. If the employee has urgent reasons (e.g. a new role or family matters), you can agree to shorten the notice period, adjust the handover plan and document the revised end date in writing.

This collaborative approach can protect client relationships and encourage a better handover of passwords, files and open tasks.

2) Accept Immediate Resignation And Use Payment In Lieu

If you’d prefer the employee to finish now (or they refuse to attend), you can often rely on a contract clause allowing payment in lieu of notice. This means you pay what they would have earned during the notice period and end the employment immediately.

Make sure the contract actually allows payment in lieu and double-check any award or enterprise agreement requirements. You’ll still need to calculate final entitlements correctly, including any accrued leave payable on termination.

3) Place The Employee On Garden Leave

Where the contract permits, another option is garden leave. The employee stays employed and is paid for their notice period, but you direct them not to attend work (or to stay away from clients, systems or confidential information).

Garden leave minimises risk around data security and client poaching, while keeping enforceability of post-employment obligations intact.

4) Require Them To Work The Notice (If Safe And Appropriate)

If there’s no agreement to shorten or pay out notice - and if there are no health, safety or conduct concerns - you can direct the employee to work their rostered hours during the notice period.

That said, if attendance risks workplace conflict or client issues, consider whether garden leave or payment in lieu is a better fit.

5) Manage Conduct Or Performance Issues During Notice

Serious misconduct doesn’t go on pause just because someone resigns. If issues arise, you can still follow a fair process, gather facts and give the employee a chance to respond. Where appropriate, send a clear letter setting out the concerns and next steps, often called a show cause letter.

If misconduct is substantiated, termination for serious misconduct can end employment without notice, but ensure you have solid evidence and a procedurally fair process before taking that step.

Pay And Leave During The Notice Period

Once an employee resigns, you need to handle final pay and leave carefully. Getting this right reduces the risk of disputes and penalties.

Can You Deduct Wages Or Withhold Final Pay If They Don’t Work Notice?

Generally, you can’t make deductions unless they’re authorised in writing by the employee, permitted by law, or allowed under an award or agreement. Be cautious about “penalising” a resignation by withholding wages. If you’re considering any deduction, first review your contract and the award, and check your obligations around withholding pay.

In practice, if you don’t want them to work notice, it’s usually cleaner to rely on payment in lieu or garden leave instead of risky deductions.

How To Calculate Final Pay

Final pay usually includes wages to the last day, any payment in lieu (if applicable), accrued but untaken annual leave and other entitlements that apply under an award or agreement. To keep things accurate and timely, cross-check your award, contract and payroll settings against a practical guide to calculating final pay.

Does Sick Leave Apply During Notice?

Yes, if an employee is genuinely unwell and provides the required evidence, paid personal/carer’s leave can be taken during the notice period (subject to the usual rules). There are nuances depending on the award or agreement, so it’s worth reviewing your obligations around sick leave during the notice period.

What About Annual Leave Or Time Off In Lieu?

Whether annual leave or TOIL can be used during notice generally depends on the contract, award or agreement, and your approval. If you agree, document the arrangement in writing so there’s no confusion about dates, handover and access to systems.

Public Holidays And Notice

If a public holiday falls during the notice period, pay it in line with normal rules for that employee (e.g. an employee who would ordinarily have the public holiday as a paid day off should receive it as usual). Don’t forget to factor this into payment in lieu calculations if you end employment immediately.

Practical Steps To Handle A Non-Working Notice Period

A clear, fair and documented approach will help you resolve the situation quickly while protecting your business.

• Check the paperwork: Review the Employment Contract, applicable award or enterprise agreement, and your policies. Confirm what notice is required, and what options (payment in lieu, garden leave) the contract allows.
• Decide on the operational approach: Consider whether you need the person to work any notice, or whether an immediate finish is better for confidentiality, client continuity or team morale.
• Communicate in writing: Confirm the end date, how any notice will be handled, and what needs to happen for handover (files, passwords, client notes, equipment return).
• Secure systems and data: Remove access to sensitive systems if necessary, and ensure confidential information is protected, especially if the employee is moving to a competitor.
• Process final pay correctly: Ensure the final pay is accurate and issued within any required timeframe, including annual leave payouts and any payment in lieu if used.
• Close out HR steps: Collect equipment, conduct an exit interview, and remind the employee about confidentiality and post-employment obligations.

If the employee is still in their trial period, your approach may differ. It’s helpful to understand the rules for terminating employment during probation, including notice and risk management.

How To Reduce The Risk Next Time

A strong framework makes notice periods much easier to manage - and reduces the chances of disputes when someone leaves.

• Use clear contracts: Ensure your Employment Contract clearly sets out resignation notice, your right to direct garden leave, payment in lieu, handover requirements and return of property.
• Set practical handover processes: Have a standard handover checklist for client files, systems and passwords. This keeps business continuity high even if the notice period is short.
• Keep policies up to date: Clear policies on confidentiality, conflicts and post-employment obligations help protect your business and set expectations from day one.
• Take a measured approach to deductions: If you’re considering any deduction for not working notice, get advice first. Unauthorised deductions can breach workplace laws and create bigger problems than they solve.
• Plan for sensitive exits: For senior or client-facing roles, decide in advance when you’ll use garden leave versus payment in lieu, so you can act quickly and consistently.

A short, respectful process when someone resigns also supports your employer brand. Even when the exit is abrupt, a fair approach helps maintain morale and protects client relationships.

Key Takeaways

• When an employee won’t work their notice, you can consider negotiation, payment in lieu, or garden leave - choose the option that best protects your business and complies with the contract and award.
• Be careful with deductions and final pay; only make deductions that are permitted, and process entitlements accurately with reference to any award or agreement and a reliable method for calculating final pay.
• Employees can take sick leave during notice if they meet the evidentiary requirements; check your obligations around sick leave during the notice period.
• For conduct issues arising during notice, follow a fair process and consider a formal show cause letter if needed.
• Clarity in contracts and policies reduces risk - make sure your Employment Contract covers notice, handover, garden leave and payment in lieu, and keep policies current.
• Approach each resignation with a calm, documented process that protects clients, data and team culture while meeting your legal obligations.

If you’d like a consultation about managing an employee not working their notice period, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.