Ending Employment in Australia: A Simple Guide for Employers and Employees
Employment relationships do not last forever. At some point, a job may come to an end because an employee resigns, is dismissed, or their role becomes redundant. When employment ends, both employers and employees must follow certain legal rules under Australian workplace laws.
Understanding these rules can help avoid disputes and ensure that everyone receives the correct entitlements.
What Does “Ending Employment” Mean?
Ending employment simply means that the working relationship between an employer and employee has come to an end. This can happen in several ways, including:
-
An employee resigns from their job
-
An employer dismisses the employee
-
The position becomes redundant
-
A fixed-term contract ends
Regardless of the reason, employers and employees must follow the legal requirements relating to notice, final pay, and employee entitlements.
Notice of Termination
In most situations, an employer must give an employee written notice before ending their employment. The notice tells the employee when their employment will end.
Instead of requiring the employee to work during the notice period, an employer may choose to provide payment in lieu of notice, which means the employee is paid for the notice period but does not have to work during that time.
Minimum Notice Periods
Under the National Employment Standards, the minimum notice period depends on how long the employee has worked for the employer:
| Length of Service | Minimum Notice |
|---|---|
| 1 year or less | 1 week |
| 1 – 3 years | 2 weeks |
| 3 – 5 years | 3 weeks |
| More than 5 years | 4 weeks |
Employees over the age of 45 who have worked for the employer for at least two years are generally entitled to an additional week of notice.
Final Pay When Employment Ends
When employment ends, employees are entitled to receive their final pay. This is the last payment made by the employer after the employment relationship finishes.
Final pay usually includes:
- wages for hours worked
- unpaid overtime or allowances
- payment for unused annual leave
- payment in lieu of notice (if applicable)
- redundancy pay (if applicable).
However, unused sick leave or personal leave is generally not paid out when employment ends.
Redundancy
Redundancy occurs when an employer no longer requires the job to be performed by anyone. In some circumstances, employees may be entitled to redundancy pay based on their length of service.
Redundancy payments are separate from notice of termination and may be required in addition to notice or payment in lieu of notice.
Unfair Dismissal
Employees may be able to make a claim for unfair dismissal if they believe they were dismissed in a way that was harsh, unjust, or unreasonable. Workplace laws also protect employees from being dismissed for certain prohibited reasons, such as discrimination or exercising workplace rights.
If an employee believes their dismissal was unfair, they should seek legal advice as soon as possible because strict time limits apply.
Getting Legal Advice
Ending employment can be legally complex. Employers must ensure they follow the correct process, and employees should understand their rights and entitlements.
Obtaining legal advice can help:
- ensure the correct notice and final pay are provided
- identify potential unfair dismissal issues
- resolve disputes between employers and employees.
Final Thoughts
The end of an employment relationship can be stressful for both employers and employees. Knowing the basic rules around notice periods, final pay, and redundancy can help prevent misunderstandings and legal disputes.
If you need advice about employment termination, workplace rights, or unfair dismissal, seeking legal guidance early can help protect your position and clarify your options.
