Category: Employment

What if your employee suddenly walks out on you ?

How would you manage an employee walking out without notice? This situation is frequent in Australia, more so in certain industries (hospitality, agriculture, construction). It is very hard for an employer to enforce the notice period set out in the employment contract. The Federal Circuit Court of Australia recently imposed a penalty of $2,550 on a former employee for failing to provide his employer with 2 weeks’ notice of termination as required under the relevant modern award (Jetgo decision).

This case related to a pilot whose employment contract contained an 8-week notice period. The applicable modern award stated that the employee was required to give 2 weeks’ notice. The employer paid for the employee to undertake training at the start of his employment and prior to giving him a promotion. Upon completing the training, the employee resigned without providing notice. He had been actively seeking and had obtained alternative employment before his resignation.

In determining the penalty to be imposed on the employee for breaching the modern award by failing to provide the required notice, the judge considered that:

  • the employee’s failure to provide notice was deliberate;
  • the penalty was to serve as reminder for employees that compliance with the law was not optional;
  • the breach attracted the need for deterrence in the penalty; and
  • by working his notice period, the employee could have transferred the benefit of the training to other employees and a successor could have been appointed to his position.

The penalty of $2,550 imposed by the court is 25% of the available maximum. The court required the penalty to be paid to the Commonwealth.

This is a potential avenue for employers with high staff turnover and regular walk outs. However if employers cannot recoup their costs and may not receive the benefit of the penalty, commencing proceedings for breach of an award may not be worth the effort.

Another option may be to insert a provision in employment contracts requiring employees who do not provide the required notice of termination to repay the employer wages for a period equivalent to the notice not given.