Can employees negotiate out of lengthy notice periods?
Lengthy notice periods are an increasingly common mandate for employees in senior or executive level positions or those with highly sought-after skills. For employees bound by these extended timeframes, it can be difficult to navigate how and when to leave a role for a new opportunity, especially if their new or prospective employer wants them to start sooner.
What is a notice period?
A notice period is the length of time an employee or employer must give to end the employment relationship. The notice period length is usually set out in an employment agreement, modern award or enterprise agreement and commences on the day after the notice is given by either party.
A ‘reasonable notice’ period may apply for employees whose contract does not stipulate a notice period. A reasonable notice period will depend on factors such as the employee’s length of service, seniority, salary and age.
Do employees have to work out their entire notice period?
When an employee resigns, their employer can:
- require them to work for the entire notice period;
- direct the employee not to attend work but remain employed (‘gardening leave’); or
- pay the employee out in lieu of their notice period.
Employees are generally contractually obligated to work out their notice period, and failure to do so could amount to a breach of contract. But sometimes, it is not that simple. It is important to check whether a modern award applies as this can impact whether or not a contractual notice period is enforceable.
An employee’s contract may also specify whether their employer can withhold money owed to the employee if the required notice period is not provided.
Negotiating an early exit
Employees with lengthy notice periods, for example, three months, who have secured new work, may be looking to finish earlier with their current employer. In these circumstances, it may be possible to negotiate an earlier end to the employment if both parties agree to waive the notice period.
Employers will generally consider factors such as how long it will take to replace the employee and the amount of leave entitlements owed to the departing employee to determine whether requiring them to work out the notice is in the business’s best interests.
For employees wanting to negotiate a reduction in their notice period, consulting with an experienced employment lawyer is recommended.
Disclaimer: This article should not be construed as legal advice and is not intended as such. If readers wish to obtain advice about anything contained in this article, they should speak with a lawyer and discuss their individual circumstances.