Alex is Sprintlaw's co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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Ending employment is never easy, and the rules around notice can feel confusing - especially when the employee is aged 45 or over.
If you’re planning a restructure, dealing with performance or simply need to understand your obligations, it’s important to get the “notice period over 45” rule right. Getting it wrong can lead to underpayments, disputes and penalties.
In this guide, we’ll explain exactly when the extra week of notice applies, how to calculate the correct notice period, and your options for managing notice (including payment in lieu and garden leave). We’ll also cover common pitfalls and practical steps so you can stay compliant and keep things respectful and efficient.
What Is The “Notice Period Over 45” Rule?
Under the National Employment Standards (NES) in the Fair Work Act, an employee who is aged 45 or over and has completed at least 2 years of continuous service is entitled to one additional week of notice when you terminate their employment. That additional week is on top of the standard NES minimum notice (which ranges from 1 to 4 weeks based on length of service):- Less than 1 year’s service: 1 week
- 1-3 years’ service: 2 weeks
- 3-5 years’ service: 3 weeks
- 5+ years’ service: 4 weeks
When Does The Extra Week Apply - And When Doesn’t It?
When it applies
- Employee is at least 45 years old at the time notice is given; and
- They have 2 or more years of continuous service with you; and
- You are terminating their employment (for any reason other than serious misconduct).
When it does not apply
- Serious misconduct: If you dismiss for serious misconduct, you can terminate without notice. Use a fair, documented process and consider a show cause letter before making a final decision.
- Casual employees: NES notice entitlements don’t apply to true casuals (check the relationship is genuinely casual).
- Fixed term ends: If a genuine fixed-term contract naturally expires at the end date (no early termination), the NES notice rules typically don’t apply to that expiry event.
- Employee resigns: The employee’s own notice obligations come from the applicable award/enterprise agreement or their contract - the over-45 extra week only applies to employer-initiated termination.
How Do I Calculate Notice For An Employee Over 45?
Start with the employee’s continuous service and then add the age-related extra week if they’re eligible. Here’s a simple approach:- Identify continuous service (ignore most unpaid breaks like unpaid parental leave, which don’t count as service).
- Apply the NES minimum based on years of service (1-4 weeks as set out above).
- If the employee is 45+ and has 2+ years’ service, add one extra week.
- Check the award/enterprise agreement and the Employment Contract - if any of these provide a longer notice period, use the longest period (you can’t go below the NES).
- Consider whether you will require them to work the notice, place them on garden leave, or use payment in lieu.
What Are My Options For Managing The Notice Period?
Once you’ve worked out the correct length of notice, you have a few practical options for how the notice is served.1) Work the notice
The employee keeps working their usual duties until the notice period ends. This is common when a proper handover or business continuity is essential. You’ll still need to manage workplace dynamics and access as appropriate.2) Payment in lieu of notice (PILON)
You can end employment immediately and pay the full value of the notice period (including the extra week if applicable). This can reduce disruption and risk. Make sure you calculate correctly - salary or wages, allowances, and any contractual components required to be included. For the rules and practical tips, see payment in lieu of notice.3) Garden leave
With garden leave, the employment continues during the notice period, but you direct the employee not to attend work or to stay away from clients and systems. This option can protect confidential information and client relationships while preserving the employment link to enforce post-employment obligations. Learn more about the pros and cons of garden leave in Australia.Can I refuse the employee’s request not to work notice?
Often, yes - if the contract or award requires notice to be worked, you can direct them to work it, or you can agree to shorten it. If they refuse to work, check your rights around deductions or set-off, and be careful with any decision to treat it as abandonment. Our article on employees not working the notice period covers options and risks.How Does The Over 45 Rule Interact With Redundancy, Probation And Misconduct?
Redundancy
If the role is genuinely redundant, you may need to provide both notice (or payment in lieu) and redundancy pay depending on service and headcount thresholds. The over-45 extra week still applies to the notice component if the employee has at least 2 years’ service. Redundancy can be complex - consult your award or agreement, maintain a fair consultation process, and ensure the final pay includes all owed components such as notice, redundancy pay, any accrued annual leave and long service leave where applicable. This is where a clear final pay calculation helps prevent underpayments.Probation
The over-45 extra week does not apply unless the employee has 2+ years’ service. If you’re ending employment during the probation period, check the contract and applicable award/enterprise agreement to confirm the shorter notice that usually applies. For process points and risks, see termination during probation.Misconduct and serious misconduct
For serious misconduct, there is no requirement to give notice under the NES, regardless of age. Make sure you follow a procedurally fair process - issue a show cause letter, consider the response, and gather facts before making a decision. For non-serious misconduct, normal notice rules apply.Leave, Public Holidays And Other Entitlements During Notice
The notice period often overlaps with leave requests, sick days and public holidays - here’s how to approach common scenarios.Annual leave and notice
Employees continue to accrue annual leave during notice. If they have approved annual leave during notice, that time typically still counts towards the notice period. On termination, pay out any accrued but unused annual leave at the correct rate. For employer obligations when an employee resigns, see annual leave on resignation (the calculation principles are similar on employer termination).Personal/carer’s leave (sick leave)
If an employee is genuinely unwell during notice and provides evidence if requested, paid personal leave applies as usual. You can manage excessive or suspicious absences with reasonable evidence requests. Practical guidance is in sick leave during the notice period.Public holidays
If a public holiday falls during notice, you pay the public holiday in accordance with the relevant instrument. It usually doesn’t extend the notice period itself unless your award or agreement says otherwise.Practical Steps To Get It Right
1) Check the instruments
Confirm the applicable modern award or enterprise agreement and the Employment Contract. Identify any longer notice requirements and how they interact with the NES extra week for employees over 45 with 2+ years’ service.2) Decide how the notice will be managed
Choose between working notice, payment in lieu, or garden leave. Document your decision and ensure payroll can process any payments on time. If paying in lieu, follow the compliance points in PILON.3) Prepare a clear termination letter
Confirm the last day of employment, notice arrangements, any garden leave directions, company property return, confidentiality obligations and how final pay will be handled. Keep it professional and factual.4) Calculate final pay accurately
Include notice (or payment in lieu), outstanding ordinary wages, allowances, accrued annual leave, and long service leave where applicable. Our final pay guide outlines common inclusions and timing.5) Be consistent and fair
Apply policies consistently and avoid decisions that could appear discriminatory based on age. The over-45 extra week is about minimum entitlements, not a basis for different treatment elsewhere.6) Protect your business
If the employee has access to clients or sensitive information, consider a period of garden leave and ensure post-employment restraints and confidentiality obligations in the contract are enforceable and proportionate.Common Mistakes Employers Make (And How To Avoid Them)
- Forgetting the 2-year service threshold: The extra week only kicks in if the employee is 45+ and has at least 2 years’ service. Double-check service calculations.
- Overlooking the award or agreement: Many instruments require longer notice than the NES minimums. You must comply with the longest applicable period.
- Underpaying payment in lieu: If you choose PILON, calculate the full value correctly and pay on time.
- Skipping process in misconduct matters: Even where notice might not be required for serious misconduct, procedural fairness matters. Use a show cause process and keep records.
- Assuming notice doesn’t apply during probation: Shorter notice might apply, but it’s rarely zero. Check the contract and instrument, or review probation termination rules.
- Failing to manage non-attendance: If an employee refuses to work their notice, don’t rush to punitive steps. See your options in our guide on employees not working notice.
What Should Be In Your Employment Contracts And Policies?
Strong contracts help you manage notice periods smoothly and reduce disputes. It’s worth reviewing and updating these documents before you need to rely on them.- Employment Contract: Set out notice requirements, the ability to give payment in lieu, garden leave directions, confidentiality, IP ownership, and any post-employment restraints. If you need a robust template for salaried staff, consider a well-drafted Employment Contract.
- Workplace Policies: Include procedures for performance management, investigations, misconduct, and leave. Clear policies support consistent, defensible decisions.
- Confidentiality/IP Clauses: Ensure your contracts protect sensitive information and clearly assign intellectual property created in the role.
- Termination Procedures: Internally document who calculates notice, who prepares letters, sign-off points, and payroll timelines.
Key Takeaways
- Employees aged 45 or over with at least 2 years’ service are entitled to one extra week of notice on top of the standard NES notice.
- Always check the award, enterprise agreement and Employment Contract - you must apply the longest applicable notice period.
- You can manage notice by working it, using payment in lieu, or placing the employee on garden leave, provided your contract allows it.
- For serious misconduct, notice may not be required, but a fair, documented process (such as a show cause step) remains critical.
- During notice, handle leave, public holidays and final pay carefully to avoid underpayments or disputes.
- Up-to-date contracts and policies make it easier to apply the rules consistently and protect your business.
