If You Resign, What Are You Entitled To?

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Resigning: Your Rights, Obligations and Entitlements

As employment lawyers, we know that when you resign from your place of employment, it is essential that you take the required steps to make sure that your exit is conducted considerately and lawfully. This includes ensuring you are respectful to your employer and adhere to all obligations you have to them.

It is also important that you’re aware of what legal rights you have when resigning; in other words, if you resign what are you entitled to? This post explores the following:


How to resign

It is deemed common courtesy that to officiate resignation, a resignation letter must be handed into the appropriate individual (usually Human Resources). This letter needs to simply state the intentions of resigning and when the employees last day will be.

Some useful resignation letter examples are available at Monster and Business Insider.   

If you resign what are you entitled to?

So, if you resign what are you entitled to? Well, once the employee has handed in their official resignation letter, this can become difficult to ascertain. Employees are allowed to access sick leave during their notice period, however the same rules that govern sick leave in active employees still apply (ie – you are required to provide a doctors certificate if you are unwell for more than two days). Once you leave your sick leave will not be paid out. 

Employees are also allowed to take their annual leave during their notice period provided the employer agrees and approves the request. However, it is important to note that employers cannot unreasonably refuse an employees request to take annual leave under the Fair Work Act 2009. If the employee has accrued annual leave then this entitlement will be paid in full upon the end of their employment.

2 women at a table discussing if you resign what are you entitled to

Employee resignation notice period NSW

Now you know, if you resign what are you entitled to – but as an employee, you also have certain obligations; for example, your employee resignation notice period.

In NSW and elsewhere in Australia, employees must give notice according to their award, employment contract, enterprise agreement or other registered agreement. This will define how much notice they have to give and what rights the employer has to withhold money if they don’t give the minimum notice period.

It is important for employees and employers alike to note that an employment contract can’t provide for less than the legal minimum set out in awards and agreements. Therefore, if an employee’s contract states a notice period of one week but the employee has been at the job for more than five years, they will require a notice period of one month – because that is the minimum according to law. If you need further employment legal advice in this regard, don’t hesitate to contact us. Our team consists of workers compensation lawyers, contract experts and experienced litigators, so whatever your employment-related issue, you’re in good hands.

Ending the notice period early

When an employee has resigned and given their minimum notice, their employer can either let the employee work out the notice period or allow the employee to leave their place of employment early and pay them in lieu of notice instead.

Should the employer wish for the departing employee to leave early, there are a number of things both parties need to be aware of.

If you resign, what are you entitled to in terms of notice period payout? The employer must pay out the full notice period that applies for dismissing an employee. It’s worth noting that any time the employee has already worked during the resignation notice period doesn’t count. The amount paid must equal the full amount the employee would have been paid if they worked the full notice period. This includes:

  • Incentive-based payments and bonuses
  • Loadings
  • Monetary allowances
  • Penalty rates
  • Overtime
  • Any other separately identifiable amounts

If the employee wishes to shorten their notice period, they should demonstrate a clear handover plan and show the employer that you will have everything required done. Employees can choose to give more notice than required in the award, but the employer doesn’t need to accept this and can choose to let the employee work for the minimum notice period.

Does sick leave get paid out when you resign?

Sick leave does not get paid out when you resign; not unless it’s permitted in the award. According to Fair Work Australia, only 2 awards allow employees to cash out sick and carer’s leave: the Timber Award and Stevedoring Award. 

However, employees are entitled to an annual leave payout on resignation. And it is important to note that while an employee can take annual leave and sick leave during their notice period (within reason), it is illegal for an employer to force an employee to take leave as part of the notice period.

Restraint of trade clauses

These clauses aim to prevent the employee from;

  • Working for a competitor or client
  • Approaching previous employers clients once you begin your new employment
  • Soliciting staff from previous employer

If you believe that you are in breach of these terms within your contract, it is important to seek legal advice regarding the enforceability and interpretation of the clause. This is particularly important as any adverse action could potentially limit options for future employment.

If you’re an employee, you should now have a good idea about if you resign what are you entitled to. If you believe you were sacked in an unreasonable manner, if your protected rights were violated (for discrimination or for a reason that was harsh, unjust or unreasonable), you can consult with the Fair Work Commission. Also, our employee rights lawyers can help.

However, if you fail to give the required notice, depending on the terms and conditions of your employment, your employer may be entitled to withhold money from the termination payments that you would otherside receive. It is also important to leave on good terms with any former employers, as they may be required to provide character references.

If you have any further queries regarding the legality of an employee resigning, please don’t hesitate to contact Owen Hodge Lawyers on 1800 770 780.

Here at Owen Hodge Lawyers, we are always striving to deliver the legal business and employment guidance you need. Read more about employment rights on the Owen Hodge Blog, including our recent posts: What are the rights and responsibilities of an employee who is injured at work and What is a Notary Public? You can also view a sample letter requesting that an employee attend a medical examination.

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