Resigning With No Notice: Can Employer’s Hold Entitlements?

Table of Contents

Share at:

So, you just pieced together that your employee has resigned without giving you notice. You are confused whether you are entitled to withhold an employee’s entitlements if they resign without notice. Furthermore, you are panicking how this will affect you legally. The minimum notice period that an employee must give you is dependent on the period of time that the employee has worked with you. This article will detail if you can withhold an employee’s entitlements if they resign without notice.

Is it Legal to withhold an Employee’s Entitlements if they Resign without Notice?

There is a common misconception that employees must give notice to employers before resignation. However, there is no legal requirement that the employee must give the employer notice. If employees take this route, there are consequences that the employee will have to face.

Most Modern Awards contain a ‘Termination of Employment’ clause as detailed by the National Employment Standards which requires an employee to give specific minimum notice period of notice of termination.

  • For less than a year: the minimum notice period is 1 week
  • Between 1-3 years: the minimum notice period is two weeks
  • Between 3-5 years: the minimum notice period is 3 weeks
  • 5 years or more: the minimum notice period is 4 weeks

In short, you are able to withhold their entitlements up to the equivalent amount that the employee would of earned if they had provided the required notice period of termination.

However, the minimum notice period will only apply for employees that are covered under the Modern Award. Therefore, it is typical that many employers will implement an additional clause in an employee’s employment agreement.

Get your Full Time Employment Agreement legal document for free.

Hire your employees and protect your business with our full time employment agreement.

How Long can an Employer withhold an Employee Entitlement’s if they Resign without Notice?

As an employer, you must be aware that you do have certain entitlements such as legally entitled to withhold employee entitlements. But it is important to remember that you do not have absolute power to withhold an employee’s entitlement indefinitely.

If an employee has resigned without notice, you must begin to finalise the termination process to avoid legal liability. In order to confirm acceptance of resignation, employers draft and send a formal termination letter (notice or payment in lieu). In this process, you can demand that the employee return to work to return any confidential information in their possession or to pick up any of their belongings left at work.

Therefore, employers are not allowed to withhold employee entitlements for an indefinite period. Employee entitlements must be finalised by the next pay cycle.

Example

It is the middle of the working month and an employee at an insurance banking company has not come into work for a week. You have tried to contact him on his preferred contact number and have spoken to other employees. The next pay cycle is end of the working month. You are entitled to withhold his entitlements for 2 weeks or until the next pay cycle is due. During this time, you must send him a formal termination letter where he must accept his resignation from your company. Further, the employer is able to demand that he returns his building access pass card, any confidential client information and to collect miscellaneous personal belongings from his desk.

Final Thoughts

In conclusion, employers are entitled to withhold an employee’s entitlements if they choose to resign without notice. It is important to know your rights and obligations as an employer in each employment situation. Thus, having a written agreement in the employment contract which details processes of termination is helpful in avoiding disputes. Alternatively, you may consult a lawyer to understand your obligations. Being aware of issues that surround employment ensures that your business will run smoothly and efficiently.

Don't know where to start?

Contact us on 1800 529 728 to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.

Share at:

Simplify creating legal documents today

Browse through Lawpath's AI tools which can be used to draft, review and refine legal documents today!

Related Articles

Why Was My Trademark Rejected? Common Reasons in Australia

If your trademark application was rejected, you have several options on how to respond. Our guide explains adverse examination reports and your response pathways.

Should I Use A Deed Of Release When Employees Leave The Job?

A deed or release can be a crucial document for both employers and employees. Here is what it covers, what to look for, and how to ensure your legal protections.

What is Genuine Redundancy? (2026 Update)

No longer require an employee to do their job? Learn about genuine redundancy, your employees’ rights, and your business's obligations in this situation.

Is a DIY Will in Australia Enough? What a Basic Will Template Does and Doesn’t Cover

DIY Will Australia: Is a template enough? Learn what a basic Will covers, what it doesn’t, and when you may need extra estate planning.

What’s The Difference Between A Corporation And A Company?

Understand the definitions of corporation vs company under Australian law and choose the right business structure for you.

How to Get Out of a Gym Membership

Learn how to cancel a gym membership in Australia and the legal rights you have under Australian Consumer Law.