9.05.2018

TAKE NOTICE: YOUR GUIDE TO THE MYTHS AND LEGENDS ABOUT NOTICE

We expunge some of the myths.

Myths and legends abound when it comes to notice of termination.  To name just a few:

  • Once notice is given, it can be withdrawn;
  • An employer has to accept a resignation for it to be valid;
  • The period of notice is the pay period.

We expunge some of these myths.

What is notice?

Notice is the period of time contractually required to be given to terminate an employment agreement.  Notice is commonly two weeks, four weeks, or a month but can be any agreed period.  Employers and employees must give, at a minimum, the requisite notice period to lawfully bring employment to an end.

Express notice

In most cases notice will be provided for in a written employment agreement.  Most written employment agreements also require notice to be given in writing to avoid any doubt as to an employer’s or an employee’s intention.

However, the absence of a written agreement or written notice clause does not remove the obligation on either employee or employer to give notice.

Reasonable notice

Not all employment agreements are in writing (despite the Employment Relations Act 2000 requiring employment agreements to be in writing).  Further, some written employment agreements do not specify a period of notice.  In those circumstances “reasonable notice” is required.  Reasonable notice can take into account length of service, seniority of the position, what similar employment agreements require, and sometimes the particular circumstances of the termination.

What is Not Notice?

Intention to resign

Employers beware: an intention to resign is not notice.  It is simply advice that an employee intends to resign at some point in the future (whether specific or not).  If there is any doubt, ask the employee to clarify their intentions, and if they are wanting to give notice of resignation, ask for them to put it in writing.

Bad notice is no notice

A failure to give the correct period of contractual notice specified within an employment agreement or failure to give reasonable notice means that notice has not been given at all.  Adding the shortfall between the amount given and the amount required does not cure the issue: notice has not been legally effected and can only be remedied by giving new notice for the correct period.

Many employment agreements permit notice to be truncated by the ‘paying in lieu of notice’ of the remainder of the period.

Payment in Lieu of Notice

Often an employment agreement will allow an employer to pay an amount instead of notice: this is commonly referred to as paying in lieu of notice.  In these circumstances an employer exercising that right will terminate employment prior to the expiry of the notice period by making such payment, i.e. it is in lieu of or ‘instead of’ actual notice.  An employer is only able to pay in lieu if the employment agreement provides for it, or if the employer and employee agree.

If there is no contractual ability to make a payment in lieu of notice, and an employer gives less than the required amount of notice, then it has not given notice at all (see “Bad notice is no notice” above).

Accepting Notice

An employer does not have an option of accepting an employee’s resignation or not.  Once notice is given the dye is cast and employment will terminate unless both the employer and employee agree to a variation.

Furthermore, it is not possible for an employee, or for that matter an employer, to withdraw notice once it has been given.  Either party giving notice has exercised a contractual right that brings to employment to an end.  That notice cannot then be unilaterally withdrawn.  If the parties wish their employment to continue, the employment agreement will need to be varied by an agreement to rescind the notice.

Pay period

It is an urban myth that the notice period is the pay period.  The pay period, and frequency of pay, has nothing to do with the period of notice.  If the pay period and the period of notice are the same, that is contractual coincidence.  It is not the law.

Do you need expert legal advice?
Contact the expert team at Hesketh Henry.
Kerry_100x100 1
Media contact - Kerry Browne
Please contact Kerry with any media enquiries and with any questions related to marketing or sponsorships on +64 9 375 8747 or via email.

Related Articles / Insights & Opinion

COVID-19 and the Future of Force Majeure
Not since Y2K have force majeure clauses been of so much focus.
Shareholder Agreements:  The Corporate “Pre-nup”
You’ve got a great idea for a business and you’re pumped to get to work. 
23.06.2020 Posted in Business Advice & Company Law
Wake Up Call for #Influencer Marketers
A recent decision by New Zealand’s Advertising Standards Authority (“ASA”) concerning a sponsored Instagram story posted by a well-recognised New Zealand personality, serves to remind all partie...
12.06.2020 Posted in Advertising Law
COVID-19: Weekly Construction Briefings
12 June 2020 New Zealand has moved into Alert Level 1 from 8 June 2020. While this means that life has largely returned to normal, as physical distancing and other restrictions have been removed, upd...
12.06.2020 Posted in Construction Law & COVID-19
Liquidated damages and penalty clauses: the last word on Honey Bees
The Supreme Court’s judgment in 127 Hobson Street Limited & Anor v Honey Bees Preschool Limited & Anor [2020] NZSC 53 confirms the test for determining when a clause in a contract designed t...
10.06.2020 Posted in Construction Law
COVID-19: OIO Urgent measures – Coming soon!
The Overseas Investment (Urgent Measures) Amendment Act 2020 (“Amendment Act”) was passed on 28 May 2020 and received Royal Assent on 2 June 2020.  The majority of the Amendment Act will ...
Retentions Regime: Government Announces Changes
On 27 May 2020 the Government announced several in-principle changes to strengthen the retentions regime (Regime) in the Construction Contracts Act 2002 (the CCA). Despite the Regime’s introduction ...
04.06.2020 Posted in Construction Law
Send us an enquiry
For expert legal advice, please complete the form below or call us on (09) 375 8700.
  • This field is for validation purposes and should be left unchanged.