What can I deduct when my employee did not work their notice period?

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In a tight labour market, a common question from members is, My employee resigned without giving notice?’ ‘What are my rights?

Most awards and employment contracts require employees to give notice when they resign. It is best practice to ask employees to provide their notice of resignation in writing. The Road Transport and Distribution Award 2020 in clause 34 determines an employee must give the employer notice as follows:

If the employee does not work their notice, an employer may deduct an amount equal to one (1) week’s wage from wages (hours worked) owing to the employee at termination, if:

o   the employee agreed to it in writing; or if,

o   the deduction is authorised by the employee’s modern award or industrial agreement and;

o   the employee is over 18, and the deduction  is not considered to be unreasonable (for example, the employee could not reasonably work the notice due to hospitalisation)

The Fair Work Act 2009 in section 323 regulates the payment of wages and the circumstances where an employer may make deductions from employees’ wages. When an employee resigns, the employer must pay the employee for all work performed plus accumulated entitlements, including superannuation.  The failure to do so would constitute a breach of the Act.

The one week wages deduction cannot be made from any statutory entitlements like annual leave, superannuation, or other accruals, only from wages due.

If you have questions or need assistance, contact the members’ Advice Line