When a staff member hands in their resignation, most business owners immediately focus on the practicalities. Who will take over their work? How quickly can a replacement be found? How do we keep the team moving?
What often receives far less attention is the period between the resignation and the employee’s final day.
For many businesses, this is simply a time to hand over work and say goodbye. But for others, it can be the point at which the business is most exposed.
Departing employees often still have access to confidential information, client relationships, systems, intellectual property and company assets. Managing that risk isn’t about expecting the worst from every employee, but rather about having the right protections and processes in place if things don’t go according to plan.
The Notice Period Is Not Always Business as Usual
When an employee resigns and gives notice, they generally remain employed until their employment ends. Unless you decide otherwise, they will usually continue performing their normal duties and retain access to the same information, systems and relationships they had before resigning.
For most employees, this presents little or no risk.
However, some departures deserve closer consideration, particularly where the employee:
- is moving to a direct competitor;
- has access to confidential information, pricing or commercially sensitive data;
- manages key client relationships;
- has access to critical business systems or intellectual property; or
- has shown signs of conflict, disengagement or misconduct leading up to their resignation.
In these situations, allowing the employee to continue working their notice period should be a conscious business decision, not simply the default approach.
Assess the Risk Before Deciding What Happens Next
Every resignation provides an opportunity to pause and assess the level of risk before deciding how the notice period should be managed.
Ask yourself:
- Does the employee have access to information that could damage the business if misused?
- Are they joining a competitor?
- Is there any concern about clients or employees being approached after they leave?
- Could continued access expose the business to unnecessary operational or commercial risk?
Depending on the circumstances, the employment contract and any applicable award or enterprise agreement, employers may decide to:
- allow the employee to work through their notice period as normal;
- direct the employee not to attend work during the notice period while they remain employed (commonly referred to as garden leave), where the employment contract provides for this; or
- agree with the employee to end the notice period early and make any required payment; or
terminate the employee’s employment before the resignation takes effect and provide the notice or payment in lieu required under the applicable contract, award, enterprise agreement and legislation. (Ending employment during a resignation notice period can create dismissal-related risks. Employers should obtain advice before taking this step.)
There is no one-size-fits-all approach. The right decision will depend on the employee’s role, the level of risk and the contractual arrangements in place.
What is garden leave?
Garden leave is a period during which an employee remains employed and continues to receive their usual pay and contractual entitlements but is directed not to attend work or perform some or all of their normal duties.
Because the employment relationship continues, the employee generally remains bound by ongoing duties and contractual obligations, including confidentiality. An employer’s ability to place an employee on garden leave will usually depend on the employment contract and the circumstances of the departure.
Your Employment Contract Matters
How much flexibility you have when managing a departure often depends on what your employment contract says.
A well-drafted employment contract should do much more than set out salary, hours of work and leave entitlements. It should also help protect the business when the employment relationship comes to an end.
Some of the key provisions worth reviewing include:
- Confidentiality obligations that continue after employment ends and protect client information, pricing, internal processes and commercially sensitive information.
- Intellectual property clauses confirming that work created during employment belongs to the business.
- Return of company property provisions requiring employees to return laptops, phones, access cards, keys, documents and other company assets on or before their final day.
- Garden leave clauses that allow the business, where appropriate, to direct an employee not to attend work during their notice period while remaining employed.
- Non-disparagement provisions to help protect the reputation of the business after employment ends.
- Post-employment restraint clauses, such as non-solicitation or non-compete clauses, where they are appropriate for the role.
Post-employment restraints are not automatically enforceable. Their enforceability depends on factors including the wording of the clause, the employee’s role, the interest being protected and whether the restriction is reasonable in the circumstances.
Proposed changes to non-compete clauses
The Australian Government has proposed banning non-compete clauses for most employees earning below the Fair Work Act high income threshold. The threshold increased to $190,100 per annum on 1 July 2026.
The reforms are intended to commence in 2027 but remain subject to consultation and legislation passing Parliament. Businesses that rely on restraint clauses should review their employment contract framework now and ensure they also have appropriate confidentiality, intellectual property and non-solicitation protections in place.
Offboarding Is More Than an Administrative Task
A resignation should not simply trigger payroll processing and a farewell morning tea.
Offboarding is an important risk management process and should be treated with the same level of care and attention as onboarding.
A structured offboarding process should include:
- reviewing the systems, applications and confidential information the employee can access;
- disabling or limiting access to systems at the appropriate time;
- recovering all company property, including laptops, phones, access cards, keys and hard copy documents;
- confirming that confidential information has been returned or deleted from personal devices or cloud storage, where appropriate;
- reminding the employee in writing of their ongoing contractual obligations, including confidentiality and any applicable post-employment obligations;
- conducting an exit interview where appropriate; and
- documenting the completion of the offboarding process.
These practical steps can significantly reduce the risk of confidential information being retained, company assets going missing or disputes arising after employment ends.
Don’t Wait Until a Difficult Departure
Most employees leave on good terms. They work through their notice period, complete a professional handover and move on.
The departures that create problems are usually the ones where no one stopped to assess the level of risk, the employment contract didn’t provide the necessary protections, or the offboarding process wasn’t followed consistently.
Ideally, it’s best to prepare for those situations before a resignation lands on your desk, not after it happens.
- Review your employment contracts to ensure they remain current, compliant and fit for purpose.
- Develop a structured offboarding checklist that managers follow consistently every time an employee leaves.
- Make sure your contracts contain the protections your business needs.
- Ensure that your managers understand when a departure requires more than a standard handover.
Businesses invest significant time and money attracting, recruiting and onboarding employees, yet few give the same attention to how employees leave. A well-managed departure won’t eliminate every risk, but it will significantly reduce your exposure when an employee exit becomes more complicated than expected.
A thoughtful offboarding process protects more than your information and assets. It protects your clients, your people, your reputation and the future of your business.
If your employment contracts or offboarding processes haven’t been reviewed recently, now is a good time to confirm they provide the protections and flexibility your business may need when an employee leaves.
