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Can you withdraw notice of dismissal?

Can we withhold termination monies if a position is no longer redundant?
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Can you withdraw notice of dismissal?

Can you withdraw notice of dismissal?

18 May 2021

Can we withdraw notice of dismissal to an employee and withhold termination monies if a position is no longer redundant?

Q Our company recently made some positions redundant which affected about 10 employees. Since being given notice of their termination, the company has realised one position needs to be maintained. The affected employee has already accepted an offer of employment with another company. Our view is the employee is required to accept the withdrawal of dismissal, otherwise the termination would be deemed a resignation by the employee, consequently forfeiting long service leave and redundancy pay entitlements.

Can we withdraw notice of dismissal to the employee and withhold monies due on termination because the position is no longer redundant?

A Industrial courts and tribunals have generally determined that notice, once given by an employer, cannot be withdrawn, except with the agreement of the employee. The reason for this is that an employee may have already obtained employment with another employer (as has happened in this instance), with the result that if an employer could unilaterally withdraw notice, the employee could be bound by two concurrent contracts of employment. See Re Birrell v Australian National Airlines Commission [1984] FCA 378.
In this case, if the employee does not agree to the notice being withdrawn by the employer, the original notice of dismissal will stand. This means the termination is ‘at the initiative of the employer’ and is not considered a resignation. The employee would be entitled to the appropriate entitlements in relation to the position becoming redundant.

Employee resignation

The same logic applies to the withdrawal of notice by an employee. The requirement for an employee to give the appropriate period of notice is to allow an employer sufficient time to fill the position.

If an employee could withdraw notice at any time it could result in the replacement employee being left without a job, having already terminated their employment with a previous employer to accept the vacated position. See Gunnedah Shire Council v Grout [1995] IRCA 694.
An exception to this is where the mental state of the employee at the time of the resignation meant the giving of notice was not considered a voluntary act.

Heat of the moment resignation

If words of resignation are unambiguous then an employer is entitled to treat them as such. However, words may be said by the employee “in the heat of the moment”, which industrial tribunals refer to as "special circumstances".

Where special circumstances arise it may be unreasonable for an employer to assume a resignation and accept it forthwith. A reasonable period of time should be allowed to lapse. If circumstances arise during that period which put the employer on notice that further enquiry is desirable to see whether the resignation was really intended and can be properly be assumed, then such enquiry is ignored at the employer’s risk.
An employer runs the risk that ultimately evidence may be forthcoming which indicates that in the "special circumstances" the intention to resign was not the correct interpretation when the facts are judged objectively. See Canh K Ngo v Link Printing Pty Ltd (1999) 94 IR 375; Bernadette Minato v Palmer Corporation Limited [1995] IRCA 316.

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