The JobKeeper scheme ended on 28 March 2021. The information in this article about the JobKeeper scheme stopped applying from 29 March 2021.

While businesses and employees adjust to the JobKeeper scheme ending, information about the rules that applied during the JobKeeper scheme continues to be available. This is so you can continue accessing this information for historical and other purposes.

Other content continues to apply.

Find out more at Former JobKeeper scheme.

This is the Fair Work Ombudsman’s preferred view of how section 117 of the Fair Work Act 2009 applies when an employee is on leave. There is unlikely to be any certainty about this view unless the matter is settled by a superior court. You may wish to seek independent advice.

An applicable industrial instrument or contract of employment (or other legislation) may have different terms about notice or leave that could affect this information.

On 27 November 2020, the Full Federal Court of Australia confirmed that an employee who has been stood down under the Fair Work Act can’t take paid sick and carer’s leave or compassionate leave. On 21 May 2021, the High Court of Australia refused an application for special leave to appeal this decision. The information in this article remains accurate. You can read the Full Federal Court’s decision at CEPU & Anor v Qantas Airways Ltd [2020] FCAFC 205.

An employee’s employment can end during a period of leave, including when they’re on unpaid leave or when they were receiving JobKeeper payments.

Employee resigns

An employee can resign while they’re on leave or before they take leave.

When this happens, they need to give their employer any required notice. Employees should check the relevant award, enterprise agreement or contract of employment for rules about giving notice.

The employee notice period can run at the same time as paid or unpaid leave (or other absences, such as on public holidays).

The employment ends at the end of the notice period.

During the notice period, employees get paid in the same way as if they hadn’t given notice. This means:

• if the leave is paid, they get their normal leave pay
• if the leave is unpaid, they won’t usually be paid
• if they were an eligible employee of a qualifying employer in the JobKeeper scheme, they got the higher of the following amounts, for each JobKeeper fortnight if they were employed for any part of the fortnight:
  • the amount of the applicable JobKeeper payment, or
  • their usual pay for work performed (including payments for any paid leave, penalty rates and public holidays).

See Pay & the JobKeeper scheme for more information about how an employee was paid under the JobKeeper scheme.

As the law currently stands (on the basis of the Full Federal Court decision in CEPU & Anor v Qantas Airways Ltd [2020] FCAFC 205), an employee who has been stood down or given a JobKeeper enabling stand down direction isn’t entitled to use paid sick and carer’s leave or paid compassionate leave for the days or hours during which they have been stood down.

Employer dismisses employee

An employer can dismiss an employee while they’re on leave or before they start leave. The usual rules about ending employment apply, including rules about unfair dismissal and redundancy. For example, an employee can’t be dismissed because of a temporary absence from work due to illness or injury. Employers should check the relevant award, enterprise agreement or contract of employment for rules about giving notice.

If an employer dismisses an employee, including during a period of leave, they need to give the employee notice in writing (some exceptions apply).

The employer can choose to:

• give the minimum period of notice
• pay out the notice period (also known as payment in lieu of notice), or
• give a combination of the two.

The notice period can run at the same time as paid or unpaid leave (or other absences from work, such as a public holiday).

For more information go to:

• Notice of termination & redundancy pay
• Long periods of sick leave

Giving the employee notice

If an employee is given notice, their employment ends at the end of the notice period. They get paid during the notice period in the same way as if they hadn’t been given notice. This means:

• if the leave is paid, they’ll get their normal leave pay
• if the leave is unpaid, they won’t usually be paid
• if they were an eligible employee of a qualifying employer in the JobKeeper scheme, they got the higher of the following amounts, for each JobKeeper fortnight if they were employed for any part of the fortnight:
  • the amount of the applicable JobKeeper payment, or
  • their usual pay for work performed (including payments for any paid leave, penalty rates and public holidays).

See Pay & the JobKeeper scheme for more information about how an employee was paid under the JobKeeper scheme.

As the law currently stands (on the basis of the Full Federal Court decision in CEPU & Anor v Qantas Airways Ltd [2020] FCAFC 205), an employee who has been stood down or given a JobKeeper enabling stand down direction to work fewer or no hours isn’t entitled to use paid sick and carer’s leave or paid compassionate leave for the days or hours during which they have been stood down.

Paying out the notice period

If the employer chooses to pay out the notice period (that is, provide payment in lieu of notice), the employment ends and the employee does not remain employed through the minimum period of notice.

Payment in lieu of notice is calculated based on the employee’s full rate of pay for their usual hours. For example, an employee who is entitled to 3 weeks' notice will get 3 weeks' pay at their full rate for their usual hours. This is the case even if the employee is on unpaid leave.

JobKeeper payments are not included when calculating payment in lieu of notice. However, an eligible employee of a qualifying employer in the JobKeeper scheme that received payment in lieu of notice had to be paid at least an amount equal to the applicable JobKeeper payment for any JobKeeper fortnight during which they remained employed for any part of the fortnight.

What if the notice period ends after the leave period?

If an employee’s minimum period of notice extends beyond when leave is due to end, either:

• the employee returns to work after the leave and works until the notice period ends, or
• the employer provides payment in lieu of the remaining notice period.

Their entitlements for that period of the notice are the same as those outlined in the scenarios above.

Employers should also check the relevant award, enterprise agreement or contract of employment for rules about giving notice.

For more information go to:

• Notice of termination & redundancy pay
• Resignation & notice
• JobKeeper wage subsidy scheme
• Long periods of sick leave
• Final pay

For information on how notice interacts with unpaid parental leave or workers compensation, see:

• Ending employment during parental leave
• Ending employment during workers compensation.

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