Employment can end for many different reasons. An employee may resign or they could be dismissed by their employer.
Use our information and free tools to make sure you follow the law.
On this page:
Get things right
Use the information on this page to understand ending employment.
We recommend you:
- Understand the essentials: read the information on this page to get the basics.
- Get the full picture: use the links back to our main website if you want to know more.
- Free and fast learning: consider free online learning to upskill in workplace issues — start with our 20-minute Workplace basics quiz.
- Take the stress out: use our free tools and templates to take the stress out of ending employment.
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 the required written notice
- paying out the notice period, if the employee won’t be required to work it (known as payment in lieu)
- paying the employee their final pay, including paying out any entitlements owing.
- Check for other obligations under your award, enterprise agreement or workplace policy:
- Access a copy of your award at List of awards or search by using our Pay and Conditions Tool
- If an enterprise agreement applies, search the business name on the Fair Work Commission's Find an agreement database.
Resources and tools
- More information: read up on your NES responsibilities at National Employment Standards.
- Quiz: check your knowledge on ending employment with our Workplace basics quiz.
Dismissal
Dismissal (termination or firing) is when you, the employer, end an employee’s employment.
Key points
- When you dismiss a full-time or part-time employee, you must give them notice.
- You can:
- let these employees work their notice period
- end their employment early and pay it out (also known as pay in lieu of notice), or
- offer a combination of these options.
Example: Employee not working the full notice period
Gunter is a permanent full-time employee who has been working at a steel mill for 5 months.
They’re still within their 6-month probation period.
Gunter’s manager calls them into a meeting and tells them that they have made the decision to end their employment.
The manager explains to Gunter that they’re still in their probation period and are entitled to one week of notice.
Gunter is given notice of termination on Tuesday. This means Wednesday is the first day of their notice period.
Gunter is told that they will only need to work 3 days of the notice period and that their employment will end on the Friday. They’ll then be paid out the 2 days remaining of the notice period.
Their final pay includes:
- payment for the hours they’ve worked
- 2 days of payment in lieu of notice
- the unused annual leave they’ve accumulated.
- 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 during their shift (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 while working.
- Small businesses (less than 15 employees) need to know 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
- More information: understand your responsibilities when dismissing an employee at Dismissal.
- Online training: if you need to need to have a difficult talk, consider taking our free Difficult conversations in the workplace – manager course (it’s free and takes 25 minutes).
- Small Business Fair Dismissal Code: download the Small Business Fair Dismissal Code (DOCX) Small Business Fair Dismissal Code (PDF) to understand your responsibilities for fair dismissals.
- Templates: access our free templates to help end employment at Templates.
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 say how much notice they need to give you (if any).
- The employee’s notice period:
- starts the day after the employee gives notice that they want to end their employment
- ends on the last day of employment.
- You don’t have the choice of accepting or rejecting a resignation.
- You should make sure 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.
- 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: access our free templates to manage ending employment at Templates.
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 – make sure 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 enterprise 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. It is important to check.
- 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
- More information: go to our Redundancy section to understand all the rules and obligations that apply for redundancy.
- Calculator: use our Notice and Redundancy Calculator to calculate notice periods that apply to your business based on the award that applies.
- Guide: work at best practice for communication and use our Consultation and cooperation in the workplace guide.
- Templates: access our free templates to manage redundancy at Templates.
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
- other protected reasons.
- Employees also have ‘protected attributes’ and can’t be unlawfully discriminated against – for example, because of their 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: learn more about Protections at work and Protection from discrimination at work.
- Training: a diverse and inclusive workforce is good for business – take our free 20-minute training on Diversity and discrimination at work.
- Fair Work Commission: understand general protections claims and your obligations from Fair Work Commission – General protections applications involving dismissal.