How To Write a Resignation Policy for Your Workplace

A clear resignation policy helps your team leave well and your business keep running smoothly. It sets expectations, reduces confusion, and ensures you’re meeting your legal obligations when someone chooses to move on.

In Australia, there’s no one-size-fits-all rule for resignations. Notice periods, final pay timing, deductions and handover expectations often come from a mix of contracts, awards or enterprise agreements, and your internal policies.

In this guide, we’ll walk through what a practical, legally sound resignation policy should cover, how to handle tricky scenarios like resignations without notice or for health reasons, and a simple process to draft and roll it out across your workplace.

What Is a Resignation Policy?

A resignation policy is an internal document that explains how employees resign from your business and how you’ll manage the process. It usually covers notice requirements, how to give notice, handover and return of property, final pay and entitlements, and the tone you want to set around respectful exits.

Think of it as a roadmap for a potentially sensitive transition. A good policy creates consistency for managers and staff, sets expectations early, and reduces the risk of disputes over notice, pay or access to systems and information.

Why Your Workplace Needs One in Australia

There are a few reasons every workplace should have a clear resignation policy.

• Clarity and consistency: Everyone understands the steps, who to notify, and what happens next. That helps managers handle resignations fairly and professionally.
• Legal compliance: Notice, deductions, and entitlements are often governed by contracts and modern awards or enterprise agreements. A policy helps you apply the right rules in a consistent way.
• Risk management: Clear handover, confidentiality reminders and timely return of devices and documents reduce operational and security risks.
• Positive culture: A respectful framework for exits supports morale and protects your employer brand, even when people are moving on.

What To Include In Your Resignation Policy

1) Notice Periods and How To Give Notice

Set out the expected notice period, where that requirement comes from, and how to give notice. In Australia, employee notice periods typically come from their resignation notice periods in the employment contract or a modern award/enterprise agreement that applies to the role.

• Source of notice: State that notice must be provided in line with the employee’s contract and any applicable award or enterprise agreement. If a contract or award is silent, your policy can ask employees to provide reasonable notice and to speak with their manager about timing.
• Written notice: It’s best practice to require written notice (email is usually fine) to the employee’s manager and HR. While not mandated by the Fair Work Act, written notice avoids disputes and creates a clear record.
• Working the notice: Clarify that the expectation is the employee works their notice unless different arrangements are agreed.
• Early release: Explain when you might agree to an early finish, use paid leave during notice, or consider Payment in Lieu of Notice if it suits both parties and is consistent with the contract or award.

2) Final Pay and Entitlements

Be specific about what the business will pay on resignation and when it will be paid.

• What gets paid: Final wages to the last day worked, any accrued and unused annual leave, and other entitlements in the contract or applicable instrument. For clarity, note that unused personal/carer’s leave (sick leave) is generally not paid out. You can cross‑reference your payroll process or link to your internal FAQ on annual leave on resignation.
• Timing of payment: Advise when final pay will be processed (for example, on the next regular pay cycle or within a set number of days). Some awards or agreements specify timeframes, so note that you’ll follow any applicable rules.
• Permitted deductions: If an employee doesn’t give required notice, deductions from wages are tightly regulated. Only make a deduction if it’s permitted under an award or enterprise agreement, or the employee has a compliant written authorisation and it meets the Fair Work Act rules. Outline that your payroll team will assess any deduction in line with law and your policy on withholding pay.
• How you’ll calculate: Point to your internal checklist or payroll process for calculating final pay to keep it consistent.

3) Return Of Property, Access and Confidential Information

• Property and access: Set a deadline for returning laptops, phones, ID cards, keys and any physical files. Clarify how and when system access will be removed, including email, shared drives and third‑party tools.
• Confidentiality: Remind employees of their ongoing confidentiality obligations and any post‑employment restraints in their contract. If your contracts permit it, you can also explain when a short period of garden leave may be used.

4) Handover and Exit

• Handover plan: Explain what a reasonable handover looks like for your business (for example, a written status summary, sharing key files, and introducing a replacement to stakeholders).
• Exit interview: Note whether exit interviews are optional or encouraged, and how feedback is used to improve the workplace.

5) Contact Details and Communication

• Who to notify: Provide the email or HR system employees should use to submit written resignation and where to send questions.
• Tone and support: Emphasise respectful communication and your commitment to supporting a professional transition.

Handling Special Scenarios Fairly And Lawfully

Resignation Without Notice

Occasionally, someone will resign effective immediately. You can’t force an employee to work if they choose to leave, but you can manage the consequences in line with the contract, award or agreement.

• Be clear in advance: Your policy should explain the expected notice and the potential consequences if notice isn’t provided, including whether a permitted deduction from wages may apply (subject to award/enterprise agreement rules and the Fair Work Act).
• No blanket withholding: Avoid across-the-board withholding of final pay. Any deduction must be lawful and calculated properly, and you cannot deduct from accrued annual leave payouts unless the applicable instrument clearly allows it.
• Plan for continuity: Have a rapid handover checklist for “no notice” cases (passwords, key files, customer status) so operations continue smoothly.

Health and Mental Health Resignations

People sometimes resign due to illness, injury or mental health. Your policy should encourage compassion, privacy and practical support.

• Privacy first: You should not require details of a diagnosis. Keep records secure and limit access to those who need to know.
• Immediate resignation: Where health requires an earlier finish, explain that you’ll explore options such as waiving part of the notice, leave during notice or lawful Payment in Lieu of Notice where appropriate.
• Access to support: Where available, signpost your EAP or other support channels in your policy and acceptance-of-resignation emails.

Probationary Period Resignations

Probation is set by the contract and isn’t defined by the Fair Work Act. Notice requirements during probation will come from the contract and any applicable award or enterprise agreement (often shorter than for ongoing employment).

• Be explicit in contracts: Ensure each Employment Contract clearly sets probation length and the notice required from both sides during that period.
• Policy alignment: Your resignation policy should reflect those contract terms so managers apply them consistently.

Leave, Working (or Not Working) Notice and Early Release

Set expectations about what happens during the notice period.

• Using leave: Make it clear when annual leave can be taken during notice and how requests will be considered in light of business needs.
• Not working notice: If an employee asks not to work their notice, outline your process for deciding between early release, leave or pay in lieu, and reference your stance on not working the notice period.

Drafting And Rolling Out Your Policy: Step-By-Step

Step 1: Map Your Legal Framework

List each role or group of roles and note which modern award or enterprise agreement (if any) applies. Check those instruments for employee notice obligations, deduction rules and any final pay timeframes.

Review your standard contracts for notice clauses, post‑employment restraints and confidentiality so your policy aligns with what employees have agreed to.

Step 2: Decide Your Business Settings

Choose your default expectations for notice, handover, garden leave (if contracts allow), return of property and timing for final pay. Build a simple exceptions process for unusual cases (e.g. immediate health-related resignations).

Step 3: Draft in Plain English

Write short, clear sections that managers and employees can follow without legal training. Use headings, bullet points and examples. Keep tone supportive and professional.

Step 4: Align With Your Employment Documents

Make sure the policy is consistent with your Employment Contract templates and any enterprise agreements. Where there’s a conflict, the contract or award/agreement will usually prevail - so update the right document, not just the policy.

Step 5: Add Related Templates

Prepare standard emails and letters (acknowledging resignation and confirming last day), a handover checklist, a return-of-property form and a brief manager’s guide for exit conversations. If you use them in your business, keep a template separation agreement and a process for Workplace Policy updates.

Step 6: Communicate and Train

Launch the policy to staff, upload it to your intranet, and brief managers on how to apply it. Encourage employees to read the policy before they resign so they understand notice, handover and final pay.

Step 7: Apply and Review

After a few resignations, review what worked and what didn’t. Update the policy to close any gaps, and keep it aligned with changes to awards or your contracts.

Key Takeaways

• A practical resignation policy sets clear steps for notice, handover, return of property and final pay, and reduces the risk of disputes.
• Employee notice requirements usually come from contracts and applicable awards or enterprise agreements - build your policy around those rules.
• Only consider deductions for no-notice resignations where they’re permitted by an award/agreement or meet Fair Work Act requirements, and never as a blanket approach.
• Handle health and mental health resignations with compassion and privacy; consider early release, leave or lawful payment in lieu where appropriate.
• Keep your policy aligned with your Employment Contract templates, and use standard letters, checklists and manager guidance to ensure consistent application.
• Process final wages, annual leave and other entitlements on time and in line with your contracts, awards and final pay process.

If you’d like a consultation on drafting or updating your workplace resignation policy, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.