Many employers do not take the time to understand their employment contracts and the effects of the National Employment Standards (NES). This can lead to harsh financial implications when terminating employees or, for example, selling your business, due to the requirement to provide the minimum period of notice or payment in lieu of notice.
If the notice period in the employment contract is greater than the minimum provisions under the NES, then the employment contract will apply. However, if the notice period in the employment contract is less than in the NES, the NES will prevail.
If your employment contract does not provide for a notice period, then the notice of termination provisions in the applicable modern award will apply. If your employees do not operate under an award and have no employment contract, then “reasonable notice” will apply.
What is “reasonable notice”?
The purpose of providing a period of notice is to enable an employee to obtain new employment of a similar nature. Despite the minimum periods of notice of termination set out in the NES or your employment contract, a greater period of notice may be required for an employee if the circumstances of their employment requires it, for example, senior executive employees.
The relevant factors taken into consideration for reasonable notice are length of service, seniority and status of the position, the level of remuneration, experience and expertise, whether the employee was approached by the employer to join the organisation and the prospects for the employee to find alternative employment.
If you are an employer and are unaware of what your notice period obligations are under your employment contracts and the National Employment Standards, please contact Everingham Solomons for advice because Helping You is Our Business.
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