Can You Terminate An Employee After They Resign In Australia?

It’s common for a team member to hand in their resignation and then, during their notice period, issues pop up - misconduct comes to light, performance drops, or operational needs change.

So as an employer, can you terminate an employee after they’ve resigned in Australia?

In short: yes, you can in certain circumstances. But how you do it matters - the legal basis you rely on, what the contract says, and how you manage entitlements can all affect your risk profile.

In this guide, we’ll step through what you can and can’t do during a resignation notice period, options like garden leave or payment in lieu, how to handle new misconduct issues, what to pay on exit, and the key documents that keep you compliant and protected.

Can You Terminate After Someone Resigns?

Yes, you can end employment before the employee’s nominated end date - even after they’ve resigned - provided you have a lawful and fair basis for doing so and you follow a proper process.

Think about it this way: a resignation usually sets a future end date (after notice is worked or waived). Up until that date, the employment relationship still exists. During that period, you may:

• Continue the employment until the resignation date and let the relationship end as planned.
• Bring forward the end date by agreement, for example by placing the employee on garden leave or paying payment in lieu of notice.
• Terminate sooner for a valid reason (e.g. serious misconduct) following a fair process.

What you should avoid is an abrupt, process‑free termination that appears retaliatory or ignores contractual and award requirements. Even during a notice period, general protections and unfair dismissal laws can still apply (subject to eligibility thresholds), and procedural fairness matters.

Managing The Notice Period: Practical Options For Employers

Once an employee resigns, you have several levers to manage the transition. Your contract, applicable award/enterprise agreement, and policies should guide which option is best.

1) Require The Employee To Work Their Notice

This is the default. You keep the person on their regular roster, allocate handover tasks, and maintain performance standards. You can set clear expectations about conduct and productivity during the notice period and take management action if standards aren’t met.

2) Place The Employee On Garden Leave

Garden leave keeps the employment relationship alive (and you continue paying the employee) but directs them not to perform work or to stay away from the workplace during their notice. This is handy where you want to protect client relationships or intellectual property while winding down access and handing over duties. Ideally, your contracts include an explicit garden leave clause to make this straightforward. You can read more about how garden leave works under Garden Leave.

3) Pay In Lieu Of Notice

If you don’t need the employee to work out their notice, you can pay the full or remaining notice period instead. Make sure you calculate this correctly and address interactions with other entitlements. For a deeper dive on obligations and calculations, see Payment In Lieu Of Notice.

4) Agree To Shorten Or Waive Notice

Sometimes both parties prefer to bring the end date forward without payment in lieu (for example, the employee has another role starting). You can mutually agree to vary the notice period and document the change in writing.

5) Enforce Contractual Notice (If The Employee Wants To Leave Early)

If an employee attempts to walk out early contrary to their contract, you can direct them to comply with their notice. If they refuse to work, manage that as a conduct issue - not by withholding lawful entitlements. For practical strategies, see Employee Not Working Notice Period.

When Misconduct Or Risk Emerges After Resignation

Sometimes resignations coincide with performance issues, or new concerns surface after access is removed or during handover (e.g. data misuse, conflicts of interest, or serious policy breaches). If a genuine concern arises, you can still take disciplinary action up to and including termination - even though the employee has already resigned - provided you follow a fair process.

Investigate First

Start with a proportionate, prompt investigation. Preserve evidence, outline allegations clearly, and give the employee a proper chance to respond. Depending on the risk profile, it may be appropriate to suspend the employee on full pay while you investigate. For best practice on this step, review Suspending An Employee Pending Investigation.

Use A Show Cause Process

If the preliminary view is that misconduct occurred, issue a show cause letter inviting the employee to explain why their employment should not be terminated (or why other disciplinary action shouldn’t be taken). This helps ensure procedural fairness and reduces the risk of claims. A helpful overview is in Show Cause Letters.

Termination For Serious Misconduct

If you establish serious misconduct, you may be able to terminate immediately (without notice), even during a resignation notice period. Make sure the conduct fits the legal definition of serious misconduct and that your process and documentation are solid.

Stand Down Or Adjust Duties (If Needed)

For lower‑risk issues or where the facts are unclear, consider alternatives like directing the employee to perform limited duties, removing systems access, or placing them on garden leave while you complete the process. Keep the response proportionate to the risk involved.

Leave, Absences And Conduct During The Notice Period

The resignation period often raises questions about leave, absences and output. Handle these carefully to avoid underpayments or adverse action risk.

Sick Leave And Evidence

An employee can take paid personal/carer’s leave (if accrued and genuinely unwell) during their notice. You can request reasonable evidence (like a medical certificate) according to your policy and any applicable industrial instrument. If absence feels strategic (e.g. all notice on sick leave), rely on your evidence policy and manage expectations early.

Annual Leave And Pre‑Approved Time Off

Pre‑approved annual leave generally still stands unless you both agree to change it. If new requests arise during notice, you can approve or refuse based on operational needs, consistent with the Fair Work framework and any applicable award or agreement.

If Performance Drops Or Duties Aren’t Performed

Manage performance expectations as you normally would. Set clear tasks, timeframes and standards. If performance issues persist, document them and consider whether disciplinary action is appropriate. Keep in mind that a resignation does not give an employee licence to neglect duties.

Withholding Pay Is Not A Shortcut

Avoid withholding wages or accrued entitlements as a way to “penalise” an employee for poor performance or not working notice. Doing so risks underpayment claims and penalties. If you’re considering any deductions, make sure they are lawful. For guidance, see Withholding Pay From Employees.

Final Pay, Entitlements And Superannuation

Whether the employment ends on the original resignation date, early by agreement, or by termination for cause, you still need to calculate final pay correctly and pay it on time.

What To Include In Final Pay

• Outstanding wages and allowances up to the termination date.
• Accrued but untaken annual leave and annual leave loading (if applicable).
• Long service leave, if applicable based on jurisdiction and service.
• Any other contractual entitlements that are due.

Timeframes for payment can be set by an award, enterprise agreement or policy. As a starting point, pay promptly to limit disputes. For a step‑by‑step overview, refer to Calculating Final Pay.

Payment In Lieu Of Notice And Super

If you pay in lieu of notice, consider how it interacts with superannuation. In many cases, super is not payable on genuine payment in lieu, but it depends on the nature of the payment and your circumstances. It’s worth checking the detail in Payment In Lieu And Superannuation to ensure compliance.

Deductions And Property Returns

If the employee has property to return (devices, uniforms, keys), build a simple offboarding checklist. Any deductions (for example, unreturned property) must be lawful, reasonable, and authorised. A clean, documented handover reduces friction and claims risk.

Contracts, Policies And Documents That Make This Easier

Most disputes during a notice period trace back to unclear contracts or missing policies. Getting your paperwork right up front gives you flexibility at exit and reduces claims risk.

Key Contract Clauses To Include

• Notice Of Termination: Clear mutual notice periods and how notice can be given.
• Payment In Lieu: An express right to make payment in lieu of notice.
• Garden Leave: A clause allowing you to direct the employee not to attend work or to perform limited duties during notice.
• Post‑Employment Protections: Confidentiality and any reasonable restraints to protect your business.

If your agreements are outdated, consider updating your Employment Contract suite so these rights are clear and enforceable.

Policies That Support A Fair Process

• Code Of Conduct & Performance: What you expect during employment and notice periods.
• Disciplinary Procedure: Steps for warnings, investigations and show cause processes.
• Leave & Evidence: How to request leave and what evidence is required.
• IT & Security: Access, confidentiality and device return expectations during offboarding.

Align your procedures with a fit‑for‑purpose Workplace Policy framework so managers can act consistently.

Templates For A Smooth And Defensible Exit

• Show Cause Letter and Outcome Letters: To ensure procedural fairness if issues arise during notice.
• Payment In Lieu Letter or Garden Leave Direction: To document any change to how notice is managed.
• Finalisation Checklist And Acceptance Of Resignation: To confirm the end date and entitlements.
• Separation Agreement (where appropriate): To resolve outstanding issues and confirm post‑employment obligations.

Having a ready toolkit, like an Employee Termination Documents Suite, helps you respond quickly and consistently if situations change after a resignation is handed in.

Key Takeaways

• You can terminate after an employee resigns in Australia, but you still need a lawful reason and a fair process.
• Use practical levers to manage notice: require work, place the employee on garden leave, or make payment in lieu if appropriate.
• If misconduct emerges during notice, investigate, use a show cause process, and consider suspension on pay while you assess the facts.
• Don’t withhold lawful entitlements as leverage; manage performance and attendance issues through proper procedures.
• Calculate final pay correctly (including leave and timing) and check whether super applies to any payment in lieu.
• Strong contracts and policies - including a current Employment Contract and clear Workplace Policies - give you options and reduce claims risk.

If you’d like a consultation on managing resignations, notice periods and terminations in your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.