Can I make a termination payment in lieu of notice?

Payment in lieu of notice can only be made in the event of an employer terminating an employee’s employment; not if an employee resigns.

If the employer chooses to make payment in lieu of notice, the amount paid must be equal to the full amount that the employee would have been expected to work for the notice period.

This includes

  • Incentive-based payments and bonuses
  • Loadings
  • Allowances
  • Overtime
  • Penalty rates and
  • Any other separately identifiable amounts

Annual leave doesn’t accrue on payments made in lieu of notice.