Employee resigns without notice — what can you do?

It is Monday morning and there is an email in your inbox: "I resign, effective immediately." Or the message came as a mid-shift walkout with no warning at all. Before you do anything — before you dock a day's pay, change the locks, or respond to the employee — it is worth knowing exactly what Australian employment law allows you to do and, just as importantly, what it does not.

What is actually at stake

The immediate instinct is to focus on the inconvenience — a vacant role, unfinished work, disrupted clients. The legal exposure, however, runs in the other direction: it is the employer who is most at risk of getting the response wrong.

Deducting wages without a lawful basis exposes you to a Fair Work Ombudsman complaint and civil penalties. Withholding accrued annual leave as punishment for a short-notice exit is unlawful. Failing to pay final entitlements on time can also attract penalties. The employee may have breached their contract by leaving without notice, but two wrongs do not make a compliant payroll run.

There is also a secondary exposure: how you handle the exit shapes whether confidential information, client relationships, and IP walk out the door with the person.

Step 1: Work out what the contract and any applicable award actually say

Before you decide what to do, you need to know what you are entitled to expect. Pull out the employment contract and identify the applicable modern award or enterprise agreement (if any).

The National Employment Standards (NES) under the Fair Work Act 2009 (Cth) set minimum notice periods for when an employer terminates employment — they do not set minimum notice periods for employee resignations. That obligation, if it exists at all, comes from:

the employment contract;
a modern award clause that specifies employee resignation notice; or
where there is no written term and no award requirement, an implied term of "reasonable notice" (which is notoriously hard to enforce in practice).

Casual employees generally have no notice obligation at resignation unless an award or agreement says otherwise, because there is no firm commitment to ongoing work.

If your contract is silent and no award clause applies, you may have a moral argument but a weak legal one. Make note of that now — it will affect how far it is worth pushing back.

Step 2: Choose your immediate response

Once you know your contractual and award position, you have three practical paths. They are not mutually exclusive — you can combine elements depending on circumstances.

Accept the resignation effective immediately. This is the cleanest option when keeping the employee in the business creates a safety, cultural, or information-security risk, or when you simply cannot enforce the notice period in any meaningful way. Confirm in writing, state the last day of employment, and move promptly to Step 4.

Ask the employee to work out their notice period. Where notice is required under the contract or award, you can remind the employee of that obligation in writing. You cannot physically compel someone to work, but you can make clear that leaving before the end of the notice period may constitute a breach of contract.

Place the employee on garden leave. If your employment contract expressly permits it, you can direct the employee to remain employed and paid through their notice period without attending work or accessing systems. Garden leave is useful when you want to preserve post-employment restraints, prevent a competitor from engaging the person early, or protect client relationships — without the operational awkwardness of having a checked-out employee in the office. The Fair Work Ombudsman recognises this as one of the options available where a contract supports it.

Things to nail down before choosing:

Is garden leave expressly permitted in the contract? If not, directing an employee to stay home while paid is on shaky legal ground.
Is the role one where a short-notice exit genuinely exposes clients or confidential data, or is continuity manageable internally?
Is there any award provision that permits an employer to deduct from wages for insufficient resignation notice? (Some awards include this; most do not — check carefully.)

Step 3: Secure the business immediately

This step runs in parallel with Step 2 — do not wait until the paperwork is sorted.

Revoke or suspend system access: email accounts, cloud storage, CRMs, code repositories, and any customer-facing portals.
Retrieve company property: devices, access cards, keys, and any confidential documents. Record the handback in writing.
Brief anyone who needs to know — a trusted team member who can manage the employee's client relationships or workload, without broadcasting the departure before you are ready.
Review what the employee had access to: client lists, pricing data, product roadmaps, and supplier terms. If any of that is at heightened risk, document it now so you have a contemporaneous record.

If your contract includes confidentiality, non-solicitation, or restraint of trade clauses, send a short, polite written reminder of those continuing obligations. You do not need to threaten litigation — a clear, professional reminder is usually sufficient to put the employee on notice that you are watching.

Step 4: Calculate and pay final entitlements — correctly

This is where many employers stumble, particularly under the pressure of a surprise exit.

Final pay must include:

wages for all hours worked up to and including the last day of employment;
any accrued but unused annual leave, paid out at the rate the employee would have received had they taken the leave (including applicable leave loading); and
any other contractual entitlements that have accrued.

Accrued annual leave must be paid out on termination — including where the employee resigns without notice. It cannot be withheld as a penalty for failing to give notice. This is a firm legal obligation: see the Fair Work Ombudsman's guidance on final pay.

On deductions — proceed with extreme caution.

Under s 324 of the Fair Work Act 2009 (Cth), an employer can only make a deduction from an employee's pay if:

the deduction is authorised in writing by the employee and is principally for the employee's benefit (not the employer's);
the deduction is authorised by or under a modern award, enterprise agreement, or Fair Work Commission order; or
the deduction is authorised by or under a Commonwealth, state, or territory law, or a court order.

A deduction you make unilaterally because the employee did not work their notice is almost certainly not permitted under any of these categories. Some awards contain a specific provision allowing a limited deduction where an employee fails to give the required resignation notice — but those clauses must be followed exactly, and the s 324 framework still applies. If your award has such a clause, read it carefully and get advice before acting.

What about suing for breach of contract? In theory, an employer can pursue a damages claim for loss caused by a failure to give adequate notice. In practice, these claims are rarely economic: you would need to prove actual, quantifiable loss directly caused by the short notice, and the cost of litigation almost always exceeds the recovery.

Step 5: Document everything and extract the lesson

Once the immediate crisis is managed, close the loop properly.

Retain a file note of the resignation, the date and method of communication, your written response, and any further correspondence.
Keep a record of the final pay calculation, showing each component and how it was calculated.
Note what property was returned, by whom, and when.
If post-employment obligations are in play (confidentiality, restraints), flag a calendar reminder to monitor for obvious breaches over the coming weeks.

Then ask: why did this happen without warning, and what would have made it easier to manage? Often the answer points to a contract that was drafted years ago and has never been updated, or to notice provisions that were set too short to be practically useful, or to the absence of a garden leave clause that would have given you options.

How Artificer Legal can help you respond and prepare

If you are dealing with a resignation right now and you are uncertain whether a deduction is permitted, whether your restraint clause will hold, or whether garden leave is available to you, the situation calls for prompt legal advice rather than a best guess.

An Artificer Legal practitioner can:

Review your employment contract to identify what notice rights and remedies you actually have, and advise on whether any deductions or set-offs are lawful given your specific award or agreement.
Draft a written response to the employee that accepts or addresses the resignation, restates post-employment obligations, and documents your position clearly — without creating new legal risk.
Advise on enforceability of any restraint of trade, confidentiality, or non-solicitation clause if you are concerned the departing employee may approach your clients or team.
Update your contracts and policies so that the next sudden departure does not leave you scrambling. That means reviewing notice periods, adding (or correcting) garden leave provisions, payment-in-lieu clauses, and return-of-property procedures — and making sure any deduction mechanism is properly authorised.

The one thing worth remembering tomorrow

The contract is your leverage — but only if it was drafted correctly in the first place.

Employers who react badly to a no-notice resignation (by docking pay without authority, refusing to release accrued leave, or making threats without a legal basis) often end up in a worse position than if they had simply accepted the resignation and moved on. The law is structured to make unlawful deductions easier to prosecute than breach-of-contract claims are to win.

The durable fix is not in how you handle this resignation — it is in reviewing your employment contracts now so that the next one gives you actual options: a garden leave clause you can invoke, a payment-in-lieu mechanism that is properly drafted, and a notice period that reflects the genuine operational impact of the role. If your current contracts do not include those provisions, this situation is as good a prompt as any to fix them.

Key points:

Notice on resignation is set by the employment contract or applicable award — the NES does not set minimum notice for employees resigning.
Casual employees generally have no notice obligation at resignation unless an award or agreement provides otherwise.
Employers can accept the resignation, ask the employee to work notice, or place them on garden leave (if the contract permits it).
Accrued annual leave must be paid out on termination — it cannot be withheld as a penalty for short notice.
Deductions from wages are only lawful under the narrow grounds in s 324 of the Fair Work Act 2009 (Cth); check whether an award deduction clause applies before acting.
Damages claims for breach of contract are theoretically available but rarely worth pursuing for most small and medium businesses.
Strong contracts — with proper notice, garden leave, and payment-in-lieu provisions — are the most effective preparation for a sudden exit.