Who can use this checklist?

This checklist can be used by all employers throughout Australia, except the following excluded employers:

• Non-constitutional corporation employers in Western Australia;
• State public sector employees (ie employees of a Minister, the Governor or the Crown); and
• Local Government employers — except in Tasmania.

Excluded employers may however, wish to use this document, but should first obtain legal advice.

Commentary

There are several considerations for employers when an employee decides to resign. Some of these include the accurate calculation of employee payout entitlements, notification to relevant parties affected by the resignation, and arrangements for the return of all company property. This checklist aims to guide employers through the key considerations surrounding the resignation of employees.

In terms of termination payments, employers should check that they have not over-calculated the entitlements owed before presenting such information to resigning employees. In some circumstances, employers may be bound to pay the additional amounts detailed in any termination summary, despite the fact a miscalculation has occurred. Likewise, if an employer has under-calculated the entitlements owed, it may be in breach of a relevant industrial instrument or applicable legislation, which may lead to a financial penalty, damages and/or interest on the unpaid entitlements, being imposed.

Calculations are often quite complex, particularly for long-serving employees, so it is recommended that employers check such calculations thoroughly. If an employer is unsure of the correct entitlements to offer or pay, or what the relevant taxation treatment is for each component, they should seek relevant legal, financial and/or taxation advice.
 
It is also advisable to seek legal advice before agreeing to an employee’s request for a written reference. Legal action can arise if the reference an employer provides is not a true reflection of the employee’s employment with the company and a future employer employs the former employee relying on that reference. Likewise, any reference an employer provides should not be defamatory.