Notice & Final Pay
We discuss some basic information that you should be aware of when reviewing your final pay to ensure you’ve been paid correctly.
What is first thing I should do to determine what I’m entitled to?
We recommend you check the terms of your employment contract, Modern Award or Enterprise Bargaining Agreement.
What are my notice entitlements?
You are entitled to a notice period before your termination takes effect, or payment in lieu of that notice. Payment in lieu of notice must at least be at the full rate of pay for the hours you would have worked during the notice period.
Example:
- Sally's employer did not give her any notice at all before dismissing her, and she has not been paid in lieu of that notice.
- After obtaining advice, Sally learns that she was entitled to 2 weeks' worth of notice.
- If Sally's employment had continued, she would have worked 40 hours per week for $40 an hour.
- Conclusion: Sally is entitled to payment in lieu of notice of at least: 40 hours per week x $40 per hour x 2 weeks = $3200.
How do I determine if my notice was paid correctly?
If you have a written employment contract, look at that contract to calculate your notice entitlements. There will usually be a section about notice.
Your contract may provide a greater notice period than what the Fair Work Act, or your State's statutory regime if it applies, would allow. In that case, you would be entitled to the greater amount in your contract.
Also note that you are entitled to a final payslip from your former employer, and, if you make the request, you are also entitled to a separation certificate. These documents can provide useful information as to whether your notice was paid correctly.
What if my contract doesn't say anything about notice or only allows a small amount?
Do not worry. The Fair Work Act provides a safety net. The Fair Work Act mandates at least a minimum amount of notice or payment in lieu. In other words, a contract can provide an employee a greater amount but not a lesser amount than the Fair Work Act.
The Fair Work Act applies to most employees. However, on occasion, the corresponding State laws apply instead. MKI Legal will be able to assist you in determining which laws apply to you. There would usually be a safety net that provides a minimum amount of notice in State systems too.
There might also be an enterprise agreement or an award that applies. These can provide greater amounts of notice but generally not lesser amounts than the Fair Work Act.
Example:
John has been dismissed.
After obtaining advice, John learns that the Fair Work Act applied to him, not the corresponding State system.
John also learns that he is entitled to 2 weeks' worth of notice under the Fair Work Act.
John's employment contract says that he is entitled to just 1 weeks' worth of notice.
There is no enterprise agreement that applies to John, but there is an award.
The award allows for 4 weeks' worth of notice.
Conclusion: John is entitled to at least 4 weeks' worth of notice.
What notice periods are required under the Fair Work Act?
The Fair Work Act requires the following minimum notice periods:
| Employee's period of continuous service with the employer at the end of the day the notice is given | Minimum Notice Period |
|---|---|
| Not more than 1 year | 1 week |
| More than 1 year but not more than 3 years | 2 weeks |
| More than 3 years but not more than 5 years | 3 weeks |
| More than 5 years | 4 weeks |
A employee who:
- Is over 45 years old; and
- Has completed at least 2 years of continuous service with the employer at the end of the day the notice is given;
is allowed an additional week of notice.
Are there circumstances where the employment can be terminated without notice?
If you have been terminated for serious misconduct, then your employer can terminate your employment without giving you any notice.
Serious misconduct is wilful or deliberate behaviour by an employee that is inconsistent with the employee's employment continuing. There must be very serious reasons for the employer to rely on justify dismissal without notice.
Some examples on what constitutes serious misconduct include:
- Theft, fraud or assault;
- Being intoxicated at work;
- Refusing to undertake a lawful instruction by the employer, provided it is reasonable for the employer to give that instruction.
- Deliberate conduct that poses a serious risk to someone's health or safety.
If your employment has been terminated for serious misconduct, and your misconduct does not fall within the definition of "serious misconduct", you may be entitled to:
- Claim the notice period you should have been paid, if that notice was not paid to you; and
- Make an unfair dismissal claim.
Is payment in lieu of notice different to redundancy pay?
Yes, and if you have been made redundant, you are entitled to notice, or payment in lieu of notice, and redundancy pay. For more information about redundancy and redundancy pay, visit Redundancy Pay page for more information.
What else am I entitled to in my final pay?
You are also entitled to be paid your accrued annual leave. This must be paid no matter the circumstances surrounding your dismissal.
You are generally not entitled to be paid any accrued sick leave upon termination unless your employment contract, enterprise bargaining agreement, or modern award expressly says so.
You may be entitled to a pro rata long service leave payment if you have served at least 7 years of employment (and have not taken your long service leave).