Termination Of Employment | Notice & Procedure | Assurance HR Management Tasmania

Termination of Employment Australia: A Guide for Employers

Need to terminate someone’s employment? Termination of employment in Australia is a complex area of workplace relations. It is often the hardest part of being an employer. Australian legislation sets strict guidelines for how this must happen. You must follow a specific order and meet tight timeframes. Getting these steps wrong can be very costly for your business.

Every situation is different. Factors include your business size, the employee’s length of service, and their Modern Award. Because this information is general, we recommend you contact Assurance HR at 1800 577 515 for specific advice.

What is Termination of Employment?

In simple terms, termination of employment in Australia refers to any situation where a person’s job ends. This can happen for several reasons:

The employee resigns.
The employer fires the employee.
The role becomes redundant.
The business declares bankruptcy or liquidates.

Regardless of the reason, you must fulfill your legal obligations. These include providing the correct notice period and paying out all entitlements.

Steps for a Legal Termination

To end a period of employment, you must notify the employee in writing. This letter must state their final day of work. The minimum notice you must provide depends on how long the employee has worked for you. If you cannot find the employee, you should mail the letter to their last known address.

Unless a Modern Award or contract says otherwise, use this table for termination of employment in Australia notice periods:

Period of Continuous Service	Minimum Notice Period
1 year or less	1 week
Between 1 and 3 years	2 weeks
Between 3 and 5 years	3 weeks
Over 5 years	4 weeks

Note: If the employee is over 45 and has worked for you for more than two years, give them an extra week of notice.

Are There Exceptions?

Yes. Notice periods do not apply to:

Casual employees.
Fixed-term contract workers.
Seasonal workers (e.g., fruit pickers).
Employees fired for serious misconduct (e.g., theft or fraud).

Paying Out the Notice Period

Can you pay an employee instead of having them work their notice? Generally, yes. You can choose to let them work, pay them “in lieu of notice,” or use a combination of both.

If you pay out the notice, the amount must equal the full pay they would have earned by working. This includes:

Bonuses and incentive payments.
Loadings and penalty rates.
Overtime and monetary allowances.

When you pay out the notice, the employment ends immediately. The employee stops accruing entitlements like annual leave on that date.

Avoiding Unlawful Termination and Unfair Dismissal

Many businesses face legal trouble because they provide poor reasons for dismissal. Valid reasons for termination of employment in Australia usually include:

Capacity: The employee cannot do the job.
Performance: The employee does not meet the standards in their contract.
Misconduct: The employee behaves poorly or breaks workplace rules.
Redundancy: The business no longer needs the role.

Unlawful termination occurs if you dismiss someone for discriminatory reasons, such as race, sex, age, or temporary absence due to illness. If you get this wrong, you could face penalties of up to $66,600 per contravention.

Unfair dismissal happens when the Fair Work Commission deems a firing “harsh, unjust, or unreasonable.” They will check if you gave the employee a chance to respond to performance issues or allowed them to have a support person present during discussions.

How Assurance HR Can Help

Navigating termination of employment in Australia is difficult, but you don’t have to do it alone. Assurance HR exists to guide you through every step.

We can help you: