I took approved annual leave during resignation notice: can the employer deduct a week?

Approved leave during notice is not the same as short notice

Under the Fair Work system, taking approved annual leave during your resignation notice period is possible if your employer agrees. The Fair Work Ombudsman’s guidance explains that most awards allow limited deductions from an employee’s pay for failing to give the required notice, but only under specific conditions. These deductions are generally taken from award wages, not from accrued leave entitlements. If your employment is covered by an enterprise agreement, you must check that agreement separately because its notice and deduction rules may differ. Being away on approved leave does not automatically mean you failed to give notice.

Do not assume that because you were on leave, your resignation notice was invalid. The key question is whether you actually gave the required notice, not whether you worked during the notice period.

Put all dates on one timeline

To assess your situation, write down the date you communicated your resignation, the proposed last day of employment, the notice period required by your award or agreement, and the date your annual leave was approved. Keep any later messages that changed the end date. Distinguish clearly between the last day you physically worked and the day your employment actually ends. If your employer asked you to finish earlier than your proposed end date, record whether you agreed to that change or whether the employer terminated your employment. Do not assume that you shortened your notice just because you stopped working early.

Request an itemised basis for the deduction

Ask your employer to provide the specific award or agreement clause that allows the deduction, the calculation used, and the pay category from which the amount was withheld. Compare that explanation with the actual notice you gave and the leave approval you received. On your final pay statement, keep accrued annual leave, ordinary wages, and other payments separate. A payroll label such as “notice deduction” does not by itself prove that the conditions were met or that the amount deducted was lawful.

If the deduction remains disputed

If you believe the deduction is incorrect, send your employer a dated comparison of the notice you gave, the leave approval, and the deduction explanation. Seek advice specific to your award or enterprise agreement, and bring your final pay statement and all relevant messages. Do not accept a rewritten resignation date that you believe is inaccurate merely to obtain payment. This guide cannot decide every notice clause or enterprise agreement. Its purpose is to help you separate approved leave, early termination, and a genuine failure to give the required notice.

Example: how to check your own situation

Suppose you gave four weeks’ notice, your award requires four weeks, and your employer approved two weeks of annual leave within that period. Your employer later deducts one week’s pay, citing “insufficient notice.” To check this, you would compare the date you gave notice, the required notice period, and the approval. If your notice was actually four weeks, the deduction may not be justified. But if you gave only three weeks’ notice, the deduction might be allowed under your award, subject to its conditions. Ask your employer: “Which clause allows this deduction, and how was the amount calculated?”

Next steps if the issue is unresolved

If your employer does not provide a clear explanation, or you believe the deduction is unlawful, you can contact the Fair Work Ombudsman for assistance. Before doing so, gather your resignation communication, leave approval, final pay statement, and any messages about your end date. Explain that you took approved leave during your notice period and ask whether the deduction is permitted under your award or agreement. The Ombudsman can help you understand your rights, but it cannot decide every individual case. If you are covered by an enterprise agreement, you may also need to consult that document directly.

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