An employment relationship can be ended by you or your employee.

Use our information and free tools to make sure you follow the law – quickly and easily.

On this page:

Get things right

Use the information on this page to understand ending employment.

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  • Understand the essentials: read the information on this page to get the basics.
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Your obligations

If you’re ending someone’s employment, you need to meet certain obligations under the National Employment Standards (NES). This applies even to small businesses.

Key points

  • The obligations include:
    • giving required notice in writing
    • if the employee won’t be required to work out their notice period, giving them payment instead of notice (known as payment in lieu)
    • paying them their final pay, including paying out any entitlements.
  • You may also have obligations under your award, registered agreement or workplace policy. Remember to check each of these:

Resources and tools

Dismissal (termination or firing)

Dismissal (termination or firing) is when you end an employee’s employment.

Key points

  • When you dismiss a full-time or part-time employee, you have to give them notice.
  • You can let the full-time or part-time employee:
    • stay employed through their notice period
    • pay it out (also known as pay in lieu of notice), or
    • offer a combination of the 2.
  • While casuals aren’t entitled to notice, they may still be entitled to be paid for a minimum number of hours when they are dismissed at work (even if they don’t work the hours).
  • Awards and agreements may contain minimum payment obligations that need to be complied with when an employee is dismissed whilst at work.
  • Small businesses (less than 15 employees) need to be mindful of their obligations under the Small Business Fair Dismissal Code.
  • Dismissed employees can apply for unfair dismissal if eligible.
  • Unfair dismissal is when an employee’s dismissal is harsh, unjust or unreasonable.

Resources and tools

Resignation

If your employee resigns, they may have to give you notice and meet other obligations.

Key points

  • An employee’s award, agreement or contract may set out how much notice they need to give (if any) to you.
  • The employee’s notice period:
    • starts the day after the employee gives notice that they want to end the employment
    • ends on the last day of employment.
  • You don’t have the choice of accepting or rejecting a resignation.
  • You should ensure an employee’s resignation notice is correct and allow the employee to work through their notice period or pay out the notice period.
  • An employee can take annual leave during a notice period, but only if you agree to it.

Resources and tools

  • More information: check all the rules that apply for resignation and giving notice at Resignation and notice.
  • Guide: use our step-by-step guide for information about your options if your employee has left without giving notice: My employee left without giving notice.
  • Templates: we have free templates you can use to manage; ending employment via our Templates page.

Redundancy

Redundancy happens when:

  • you don't need an employee’s job to be done by anyone anymore, or
  • the business closes due to bankruptcy (also known as going into liquidation or insolvency).

Key points

  • There are different rights and obligations when a job is made redundant or when a business is bankrupt.
  • There is a difference between a redundancy and genuine redundancy – ensure you know the difference.
  • When an employee's dismissal is a genuine redundancy, the employee can’t make an unfair dismissal claim.
  • All awards and registered agreements have a consultation process for when there are major workplace changes, including redundancies.
  • In most circumstances, small businesses don’t have to pay redundancy pay when making an employee redundant.
  • Some small businesses may still have to pay redundancy under their award or agreement. To check if small businesses need to pay redundancy pay, select your industry in Redundancy pay and entitlements.
  • Sometimes a non-small business employer downsizes and becomes a small business employer. For example, during bankruptcy or liquidation. In this situation, the employer may still have to pay redundancy entitlements.

Resources and tools

Protections at work

Employees can’t be treated differently or worse because they have, or have exercised, a workplace right.

Key points

  • All employees have protections at work – full-time, part-time and casuals.
  • Protections at work include workplace rights such as:
    • asking to take leave
    • asking about pay information, or
    • for other protected reasons.
  • Employees also have ‘protected attributes’ and can’t be unlawfully discriminated against – for example, because of age, race or pregnancy.
  • For protections issues, employees can apply to the Fair Work Commission if they believe they’ve been dismissed because of a breach of their general protections.
  • For discrimination issues, employees may be able to apply to federal, state or territory anti-discrimination bodies if they believe you unlawfully discriminated against them because of a protected attribute.

Resources and tools

More information for small business