26.03.2014

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  • Once notice is given, it can be withdrawn;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
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

Insurance Contract Law – Parliament finally gets to consider long-awaited reforms
In February 2022, the Ministry of Business, Innovation and Employment (MBIE) released an exposure draft of the Insurance Contracts Bill (MBIE’s Draft Bill) for public consultation and feedback.  MB...
24.04.2024 Posted in Insurance
Tower Troubles – Body Corporate 366567 (Harbour Oaks) v Auckland Council
Standing 40 storeys tall with 406 units, the Gore Street building in downtown Auckland (formerly known as “Harbour Oaks”) is presently the subject of New Zealand’s largest claim for residential ...
18.04.2024 Posted in Construction & Disputes
Construction Framework Wide BW
OIO Spotlight:  Government issues new directive on foreign investment for build-to-rent housing developments
Earlier this year, the coalition Government announced that it would be introducing a new streamlined consent pathway for build-to-rent developments by way of amendments to the Overseas Investment Act ...
16.04.2024 Posted in Business Advice & Property
Incorporated societies’ reregistration deadline – April 2026 may be closer than you think
The Incorporated Societies Act 2022 (2022 Act) came fully into force on 5 October 2023, meaning incorporated societies can now apply for reregistration under the 2022 Act.  Approximately 24,000 exist...
16.04.2024 Posted in Business Advice
iStock  Construction dpi
Call me? Care is required when calling on a bond
In the recent High Court decision Hawkins Ltd v Elizabeth Properties Ltd, Hawkins was successful in preventing EPL from calling on a $3m bond pending determination of a dispute principally over the ap...
10.04.2024
HH News NZS  Release
What You Need to Know About the New NZS3910:2023
The new NZS3910:2023 (conditions of contract for building and civil engineering construction) was released by Standards New Zealand in December 2024 (see our article here).  It is now gaining relevan...
10.04.2024 Posted in Construction
Money stack black and white
Income is classified as relationship property – surprised?
For all couples, embarking on the journey of building a life together involves not only love and commitment but also financial considerations.  As you navigate through shared finances, it’s imp...
26.03.2024 Posted in Private Wealth
SEND AN ENQUIRY
Send us an enquiry

For expert legal advice, please complete the form below or call us on (09) 375 8700.