An employer cannot end an employment contract without communicating the intention to the employee. A contract of employment might expressly provide for its termination by the employer immediately without it first being communicated to the employee (e.g. upon the occurrence of an event stipulated in the contract). However, other than in that case, it is difficult to contemplate that an employment contract could terminate retrospectively even by agreement between the employer and the employee.

Does the rule against retrospective dismissal apply when an employee gives notice of resignation? A retrospective dismissal date deprives an employee of time to file an application contesting their dismissal, and that may result in them missing the filing deadline. However, that is not necessarily the case in terms of a retrospective resignation date because the employee is the one selecting the retrospective date.

This issue was considered in Stay v R & K M Jordin Pty Ltd (2024). An employee emailed a resignation letter indicating he had resigned with effect 4 days earlier. The Fair Work Commission (FWC) needed to determine when the employee’s employment terminated to ascertain if his unfair dismissal claim had been lodged within the 21-day limit.

The FWC found a case like this is different to cases where, pursuant to a settlement agreement, the employer agrees to change its records to indicate the employee resigned on an earlier date.

The FWC referred to practical problems with the proposition that a resignation can operate retrospectively. The employee will inevitably be bound to comply with the employment contract and implied duties until the employer becomes aware of the resignation. Likewise, the employer will be bound to comply with obligations to an employee until they are aware of the resignation. That may include having workers’ compensation insurance to cover the employee.

The FWC observed that it would be odd, for example, if an employee is able to potentially circumvent actions for breaching the employment contract or implied duties during a period of employment by retrospectively resigning, effective from a date that preceded the relevant breach.

Therefore, the termination date was found to be the date on which the resignation was communicated, and the unfair dismissal claim was ruled to be within the 21-day time limit.