Awards often require an employee to give their employer notice when they resign.

Not all employees are required to give notice. For example, casuals don’t have to give notice. See Resignation & notice for more information.

Awards usually allow an employer to deduct money from amounts owed to an employee when the employee doesn't give enough notice.

An employer can’t make this kind of deduction if they’ve asked the employee not to work through their notice period, or agreed to a shorter notice period.

Model term in most awards

Most awards contain a model term that allows an employer to deduct up to one week of wages due to the employee under the award from an employee’s final pay if:

• the employee hasn’t given enough notice under their award
• the employee is over 18
• the employer didn’t agree to a shorter notice period
• the deduction isn’t unreasonable in the circumstances.

What is included in wages?

Under the model term only wages due under the award can be withheld. This includes pay owed for:

• ordinary hours worked, including penalties and allowances
• overtime worked
• time off instead of overtime that is owed on termination.

It doesn’t include other entitlements owed to the employee, such as:

• payments for accumulated leave due on termination of employment, or
• over-award payments.

Check the award for more information about withholding pay when minimum notice isn’t given.

Example

Zan worked for Angie as a part-time waiter at the Red Door Restaurant. His employment was covered by the Restaurant Award.

Zan was paid more than the minimum award wage for his job.

When Zan resigned he gave 2 weeks’ notice. Because he’d been employed at the restaurant for more than 5 years, he was required to give 4 weeks’ notice.

Even though Zan should have given 2 weeks’ additional notice, Angie was only able to deduct one week’s wages, at the award rate, from Zan’s final payment.

JobKeeper Payment

The JobKeeper scheme ended on 28 March 2021. This information about the JobKeeper scheme stopped applying from 29 March 2021. It remains available for historical purposes.

Find out more at Former JobKeeper scheme.

An eligible employee of a qualifying employer in the JobKeeper scheme 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.

This meant that the employer couldn’t make any deduction from the employee’s JobKeeper payment. The employer may have been able to deduct from award wages that were more than the applicable JobKeeper payment.

Modern awards that don’t allow for deductions

Not all awards include provisions that allow deductions when an employee doesn’t give the minimum notice. If an employee hasn’t given enough notice and their award doesn’t allow deductions for this reason, the employer may not be able to withhold any money from the employee's wages.

Check your award for more information.

See Deducting pay and overpayments for more information about deducting pay, including in accordance with an enterprise agreement.

Terms of other modern awards

Some awards with different rules, or no rules that allow withholding final pay, are:

• Air Pilots Award - doesn’t allow an employer to withhold wages.
• Black Coal Award and Marine Towage Award - say that an employer can deduct up to one week’s award wages if:
  • the employee hasn’t given the right amount of notice under their award
  • the employer didn’t agree to a shorter period of notice
  • the deduction isn’t unreasonable.
• Teachers Award - says that an employer can deduct up to two week’s award wages if:
  • the employee hasn’t given the right amount of notice under their award
  • the employer didn’t agree to a shorter period of notice
  • the deduction isn’t unreasonable.

The Black Coal, Marine Towage and Teachers awards don’t have an age restriction on withholding wages if notice isn’t given. However, if an employee is under 18, no amounts can be withheld from their wages unless their parent or guardian agrees in writing first.

Check the award for more information.

Deductions from payments due under the National Employment Standards

The Australian Government Industry Award provides that if an employee fails to give enough notice, the employer can deduct from any payments due on termination under the award or the National Employment Standards (NES).

This means the employer can deduct from wages due to the employee under the award.

It’s also likely to mean that the employer can deduct from:

• accumulated annual leave payable on termination under the NES, including annual leave loading (if it applies)
• long service leave if an amount for long service leave is payable on termination under the NES, rather than a State or Territory long service leave law.

The employer can’t deduct more than the amount that the employee would have been paid under the award for the minimum notice period, less any period of notice actually given by the employee.

The Government Industry Award doesn’t have an age restriction on withholding wages if notice isn’t given. However, if an employee is under 18, no money can be withheld from their wages or accumulated leave unless their parent or guardian agrees in writing first.

Any deduction under these awards must also not be unreasonable in the circumstances.

Independent advice

Employers should seek independent advice before making deductions from NES entitlements owing to an employee on termination.

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