Managing Employee Resignation During Maternity Leave in Australia

When an employee resigns while on maternity leave (more accurately, unpaid parental leave under the National Employment Standards), it can raise a lot of practical and legal questions for employers.

Can they resign during leave? What notice applies? How do you calculate final pay and handle entitlements? And how do you manage the process smoothly and compassionately while staying compliant?

In this guide, we’ll walk through the key rules and a step-by-step approach to help you manage resignations during maternity leave with confidence.

What Does Resignation During Maternity Leave Mean?

Under the Fair Work framework, eligible employees can take up to 12 months of unpaid parental leave (and may request a further 12 months). During this time, their job is protected - meaning they have a right to return to their pre-leave position (or a suitable available position if that role no longer exists).

Some employees decide not to return after their maternity leave and choose to resign. They can do this at any time, including during leave, as long as they follow their contractual or award-based notice requirements.

Your role as the employer is to accept the resignation, confirm the end date according to any required notice, and process final pay and entitlements correctly. Throughout, it’s important to maintain a supportive, respectful tone and keep your communications clear and timely.

Do Employees Have To Give Notice While On Parental Leave?

Yes - the usual notice rules apply even if the employee is currently on unpaid parental leave. The required amount of notice will be set by the employee’s Employment Contract, an applicable award or enterprise agreement, and (if relevant) the National Employment Standards.

As a general rule, the employee’s notice period starts when they provide written notice and runs as normal, even though they aren’t actively working during leave. You don’t need them to return to work to “work out” their notice.

If the employee doesn’t provide the required notice, some awards allow a limited deduction (commonly up to one week’s wages) from termination pay. However, deductions are strictly regulated - always check section 324 of the Fair Work Act and any applicable award before making deductions, and review your obligations around withholding pay.

Tip: It’s often helpful to confirm the resignation and notice arrangements in writing. You can include the resignation acceptance, final day of employment, the process for returning company property, and how final pay will be calculated.

What Happens To Leave And Entitlements When They Resign?

When an employee resigns during maternity leave, you need to calculate their final pay correctly. Here are the common components to consider.

Accrued Annual Leave

Any accrued but unused annual leave must be paid out on termination. Unpaid parental leave generally doesn’t accrue annual leave, so the balance you pay out will usually be what was accrued up to the start of parental leave (plus any accrual from paid components like annual leave taken before leave commenced).

Get across your obligations around annual leave on resignation, including timing and rates.

Personal/Carer’s Leave

Personal/carer’s leave (sick leave) is not paid out on resignation under the National Employment Standards. (Exceptions can apply under specific agreements, so always check the instrument that covers the employee.)

Long Service Leave

Long service leave is governed by state and territory laws. Pro-rata entitlements on resignation can apply once an employee meets a minimum period of continuous service (for example, five, seven or ten years, depending on the jurisdiction). Whether unpaid parental leave counts towards long service leave accrual also depends on local legislation, so confirm the rules that apply in your state or territory before you calculate this component.

Superannuation

Superannuation is generally payable on ordinary time earnings, but different rules apply to termination payments and certain leave payouts. Review whether super is owed on the components of the employee’s termination pay with this overview of superannuation on termination payments, and check the award or enterprise agreement as well.

Final Pay Timing

Many awards specify when final pay must be paid (for example, within seven days). Even where there’s no specified timeframe, best practice is to process payment promptly. This guide to calculating final pay covers what to include and how to approach timing.

How To Manage The Resignation Process Step-By-Step

Resignations during maternity leave can be sensitive. A clear, supportive process helps you stay compliant and maintain a positive relationship.

1) Acknowledge The Resignation In Writing

Confirm receipt of the resignation, the required notice period (with reference to the contract or award), and the confirmed end date. If you decide to waive some or all of the notice, clearly document that decision and the agreed termination date.

2) Clarify Practicalities (Equipment, Access, Handover)

Outline what needs to be returned (laptop, phone, security pass), how systems access will be removed, and what information you need for a handover. If the role is difficult to cover, consider whether a short handover discussion or written summary is possible and reasonable given the employee is on leave.

3) Calculate Final Pay And Entitlements

Work through accruals (annual leave, long service leave if applicable), any adjustments, and superannuation. Be cautious about deductions - any deduction must be lawful, reasonable and authorised. If in doubt, seek advice before making any offset or deduction against amounts owed.

4) Provide Required Documentation

Depending on the employee’s circumstances, they may ask for an employment separation certificate. Ensure you understand your obligations around employer separation certificates and issue payslips and final payment summaries as required.

5) Close Out Employment Records And Policies

Update your HRIS/payroll records with the termination date, ensure confidentiality and restraint provisions (if any) are noted, and set calendar reminders for any post-employment obligations (for example, IP assignment deliverables or destruction of confidential materials where applicable).

6) Communicate With Care

Keep the tone supportive and practical. Thank them for their contribution, and provide a single point of contact for any questions about final pay or the return of property. Smooth communication reduces confusion and potential disputes.

Can You Encourage Or Refuse A Resignation? Risks To Avoid

Resignations must be voluntary. You cannot pressure or coerce an employee to resign because they are pregnant, on parental leave, or for a reason that would otherwise be unlawful. General protections under the Fair Work Act make adverse action based on these attributes illegal, so avoid any conduct that could be construed as forcing a resignation.

On the practical side, you can’t refuse a valid resignation. If the employee gives proper notice and confirms their intention to resign, your role is to process it in line with the contract and applicable industrial instrument.

If there’s a mismatch between the notice in your contract and the award, apply the provision that is more beneficial to the employee. This is a good time to review your template arrangements for clarity on resignation notice periods and ensure your contracts align with awards and the National Employment Standards.

Also be careful around deductions if the employee doesn’t work the required notice. Lawful deductions must meet strict criteria under the Fair Work Act and any award. When in doubt, check your contract, confirm award clauses, and review your options before relying on any deduction or set-off (including a re-read of section 324 and your policy on withholding pay).

Frequently Asked Practical Questions

Can We Ask For More Notice Than The Contract Or Award?

You can ask, but the employee isn’t obliged to give more notice than what’s required under their contract or any applicable award or enterprise agreement. If you both agree to a longer or shorter notice, record that in writing.

What If They Want To Use Accrued Annual Leave To “Cover” Their Notice?

Annual leave during notice is generally allowed unless reasonably refused for operational reasons or limited by an award or agreement. Remember that annual leave is paid; unpaid parental leave is not. If they are on unpaid parental leave, they can request to transition to paid annual leave for the notice period if entitlements are available. Consider the request reasonably and confirm any arrangement in writing.

Do We Need To Offer Their Job Back Before Accepting The Resignation?

No. The right to return applies if they choose to come back from parental leave. If they elect to resign, you can proceed with the resignation process as long as you’ve checked notice requirements and confirmed the effective date in writing.

What If The Employee Changes Their Mind?

Once a resignation is accepted, you don’t have to agree to withdraw it. However, if it makes sense for the business and the team is aligned, you can mutually agree to rescind the resignation. If you do, set out the new arrangements in writing (including any updated leave or return-to-work plan).

What About Sick Leave Or Personal Leave During Notice?

If the employee moves onto paid annual leave to run down their notice (rather than remaining on unpaid parental leave), the normal rules for sick leave during notice can become relevant. If those circumstances arise, check your obligations around sick leave during the notice period and any evidence requirements under the award or contract.

Compliance Tips And Documentation To Review

Even when an employee resigns, a few preventative checks help you avoid issues and improve your processes for next time.

• Check the contract: Make sure your template clearly sets out resignation notice, post-employment obligations and confidentiality. If it’s outdated, consider updating your Employment Contract template across the business.
• Confirm the award or agreement: Re-check which instrument applies and whether it affects notice, final pay timing, deductions or super on termination.
• Final pay workflow: Use a consistent checklist for accruals, loadings and super. This reduces errors when calculating final pay.
• Leave settings: Ensure your payroll system doesn’t accrue annual or personal leave during unpaid parental leave by default, unless required by a specific instrument or law.
• Separation documentation: Have a standard pack ready (acceptance letter, property returns, IP/confidentiality reminder, and, where requested, an employer separation certificate).
• Record-keeping: Keep copies of the resignation, your acceptance, calculations and any correspondence in case of a later query.
• Culture and care: A supportive exit experience protects your employer brand and leaves the door open for future re-engagement.

Key Takeaways

• Employees can resign during maternity leave, and standard notice rules still apply under their contract or any award or agreement.
• Final pay usually includes accrued annual leave and may include long service leave depending on state or territory rules; sick leave isn’t paid out on resignation.
• Be cautious with deductions for insufficient notice - check award terms and the rules in section 324 of the Fair Work Act before withholding any amounts.
• Confirm the resignation and end date in writing, outline return-of-property and access steps, and process final pay promptly and accurately.
• Discrimination and adverse action laws apply - resignations must be voluntary and handled with care.
• This is a good opportunity to tighten your documentation and processes, including your Employment Contract templates and final pay workflows.

If you’d like tailored advice on handling an employee resignation during maternity leave, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.