How Do You Calculate Notice Period?

How Do You Calculate Notice Period?

Table of content

  1. What is a notice period?
  2. Who notice periods apply to?
  3. How to give notice with a notice period?
  4. How to calculate notice period?
  5. FAQ
  6. How Workstem streamline your notice period management?

Notice period directly impacts the way employment relationships are terminated and the obligations of both parties. In this comprehensive guide, we will delve into notice period and explore how HR management software like Workstem can help streamline the notice period process.

What is a notice period?

A notice period, also known as a notice of termination, is the period of time during which either the employer or the employee must provide advance notice before ending an employment relationship. The purpose of the notice period is to allow both parties to make necessary arrangements for the transition out of the employment relationship.

Who notice periods apply to?

Notice periods apply to most employees and employers in Australia, but the specific requirements may vary based on the employment contract, industry awards, enterprise agreements, or individual employment agreements. Generally, notice periods are applicable to full-time, part-time, and some casual employees.

How to give notice with a notice period?

To provide notice, either the employer or the employee must give written notice to the other party, typically stating the intended end date of the employment relationship. The notice should be clear, concise, and adhere to the provisions in the employment contract, award, or enterprise agreement.

An employer can give notice to the employee by:

  • delivering it personally
  • leaving it at the employee’s last known address
  • sending it by pre-paid post to the employee’s last known address, or
  • if the employee agrees, sending it electronically by email or text message.

Employees should check their award, any enterprise agreement, contract of employment or workplace policy to find out how much notice they need to give to resign from a job. Employees who are resigning often don’t need to give notice in writing – they may be able to give it verbally.

*Source: Fair Work

How to calculate notice period?

Calculating a notice period typically involves referencing the terms specified in the employment contract, relevant industry awards, enterprise agreements, or the Fair Work Act 2009.

Here are the steps to calculate a notice period:

Determine the applicable period

Identify the specific notice period stipulated in the employment contract or the relevant industry. The notice period may vary depending on the employee’s role, length of service, and other factors.

Common notice periods

Common notice periods often range from one to four weeks. For more senior positions or special circumstances, notice periods may be longer.

Notice period commencement

The notice period typically begins on the day that written notice is provided by either the employer or the employee. The end date of the notice period is calculated based on the length specified in the employment documentation.

Consent for a shorter notice period

In some cases, both the employer and the employee may mutually agree to terminate the notice period earlier. This agreement should be documented in writing.

Payment during notice period

During the notice period, employees are generally entitled to receive their usual wages or salary as stipulated in their employment agreement, and employers should continue to provide normal employment conditions unless otherwise specified.

FAQ

Q1: Can employees refuse to work during their notice period? 

A1: While employees may express their desire not to work during their notice period, refusing to work may be a breach of their employment contract. It is essential for both parties to adhere to the notice period provisions outlined in their agreement. However, employers and employees can mutually agree to terminate the notice period earlier if both parties are in consent.

Q2: Do employees have to be paid during their notice period?

A2: Yes, employees are generally entitled to be paid their usual wages or salary during the notice period as specified in their employment agreement. Employers should continue to provide normal employment conditions and pay unless otherwise stated in the employment contract.

How Workstem streamline your notice period management?

Workstem, your one-stop payroll and HR software, can help employers streamline the process of managing notice periods and other HR-related tasks. We offer features that facilitate record-keeping, time tracking, and compliance with employment regulations. With Workstem, you can efficiently manage notice periods, calculate final pay, and ensure a smooth transition during the termination of employment relationships.

Workstem provides a streamlined and compliant approach to handling Employment Termination Payments (ETP), which enables businesses to process notice period, leave cashing out, payments in lieu of notice, genuine redundancy pay and more, all in accordance with ATO regulations. Besides, your tax addition and deduction can be customised and auto-calculate based on your rule set.

Take control of your payroll issues with Workstem. Reach out us now!

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