How To Write A Casual Termination Letter (Fair Work)

Managing casual staff gives your business flexibility, but ending a casual engagement still needs to be handled carefully.

Even though the Fair Work Act treats casuals differently to permanent staff, you can still run into disputes if the process isn’t clear, fair and well-documented.

In this guide, we’ll unpack what “termination” looks like for casual employees under Fair Work, when a casual termination letter is useful, how to write one, and what you should pay on exit. We’ll also share practical tips to reduce legal risk.

What Does Fair Work Say About Ending Casual Employment?

Under the National Employment Standards (NES), a “casual employee” has no firm advance commitment to ongoing work with an agreed pattern of hours. In practice, many casuals work regular and systematic hours over long periods, so it’s important to consider both the legal definition and the reality on the ground.

Key points for employers:

• No notice or redundancy pay under the NES: Casuals are generally not entitled to notice of termination or redundancy pay under the Fair Work Act. However, check any applicable award, enterprise agreement or contract in case it goes above the NES (some instruments require minimum notice for roster changes or cancellation of shifts).
• Regular and systematic casuals and unfair dismissal: Casuals may be able to bring an unfair dismissal claim if they worked on a regular and systematic basis, had a reasonable expectation of ongoing work, and meet minimum employment periods (6 months, or 12 months for a small business employer with fewer than 15 employees).
• General protections apply to everyone: From day one, a casual has protection from adverse action (e.g. termination because they used a workplace right or due to a protected attribute). This is separate to unfair dismissal and doesn’t require any minimum service period.
• Casual conversion obligations: You may have obligations to consider or offer conversion to permanent employment after a certain period, depending on the NES and any applicable award. Make sure you’ve complied with these before ending the engagement.

In many cases, you can simply stop offering shifts to a casual. However, it’s usually smart to confirm the end of the engagement in writing. That way, the arrangement is crystal clear and you’ve got a record if questions arise later.

Do You Need A Casual Termination Letter?

There’s no universal legal requirement to issue a termination letter to a casual. That said, giving a short letter helps to:

• Document the end date and reason at a high level (without over-explaining).
• Confirm final pay details and company property return.
• Show you acted consistently and respectfully if a dispute later arises.

If your Employment Contract (Casual) or workplace policy promises written notice, you should follow that process. If you don’t have documented processes yet, now is a good time to implement them so future decisions are simpler and lower risk.

Also consider your broader termination paperwork. Many employers streamline the process with standardised termination documents, especially where there might be conduct or performance concerns.

How To Write A Fair Work-Compliant Casual Termination Letter

Keep it short, factual and respectful. You don’t need to list every detail. Avoid language that could be misread as discriminatory or punitive unless you have properly investigated and documented the issue.

What To Include

• Employee details and the role (e.g. “casual retail assistant”).
• Confirmation that the casual engagement is ending and the effective date.
• A brief, neutral reason (e.g. decreased business needs; end of seasonal period; conduct concerns following process).
• Final pay timing and what it covers (outstanding wages, loading, allowances, any long service leave if applicable under state law).
• Return of company property and confidentiality reminders.
• Who to contact for questions.

Where you have a genuine conduct or performance issue, consider using a prior “show cause” process so the employee has an opportunity to respond before a decision is made. This supports procedural fairness and helps if there’s later scrutiny. If you’re unsure, review our guidance on show cause letters.

Tone And Detail

Be clear and courteous. Don’t include commentary or assumptions. If the reason is operational (e.g. no shifts are available), say so briefly. If the reason is conduct-based, state that the decision follows an investigation and prior communication, without inserting unnecessary detail into the letter.

Sample Casual Termination Letter (Template)

Private and confidential

Re: End of Casual Employment

Dear ,

We are writing to confirm that your casual employment as  with  will end effective .

The reason for this decision is . As a casual employee, you are not entitled to notice or redundancy pay under the National Employment Standards. If any additional entitlements apply under your award or contract, these will be included in your final payment.

Your final pay will be processed on  and will include:
• All hours worked (including applicable casual loading and allowances), and
• Any other applicable entitlements required by law.

Please return all company property by , including . We also remind you of your ongoing obligations regarding confidentiality and company information.

If you have any questions about this letter or your final pay, please contact  at .

We thank you for your contribution to  and wish you all the best.

Yours sincerely,

This template is a starting point only. Tailor it to your award, enterprise agreement and internal policies, and ensure it aligns with any process you’ve followed.

Procedural Fairness And Risk: Unfair Dismissal And General Protections

Even with casuals, process matters. If a casual has been working regular and systematic hours and expects ongoing work, they may be eligible to claim unfair dismissal once they pass the minimum employment period (6 months, or 12 months for small business employers).

When the Fair Work Commission looks at unfair dismissal, it considers factors such as whether there was a valid reason, whether the employee was notified of the reason, and whether they had a chance to respond. These decision-making factors are set out in section 387 of the Fair Work Act.

Small businesses benefit from the Small Business Fair Dismissal Code, but you still need a fair reason and a reasonable process. If conduct is alleged, a simple investigation, a chance for the employee to respond, and a record of your reasoning can make a big difference.

Separately, “general protections” (adverse action) claims can be made from day one if a casual is treated adversely for a prohibited reason (e.g. because they took sick leave, made a complaint, or due to a protected attribute). Good documentation and consistent decision-making are your best protections here.

Finally, be careful with “non-offer of shifts” as the only tool. If a long-term casual is simply starved of hours without explanation, it can look like a de facto termination. A short, respectful letter that closes the engagement reduces ambiguity and helps demonstrate a genuine operational reason.

What Should You Pay A Casual On Termination?

Casuals don’t accrue paid annual leave or paid personal leave, so the final payment is typically simpler. Still, accuracy matters. Your final pay should usually include:

• All hours worked up to the final day (including the correct casual loading and any applicable penalty rates or allowances under the award or agreement).
• Accrued but untaken long service leave if required by the relevant state or territory legislation (some jurisdictions grant long service leave to casuals who meet service thresholds).
• Reimbursement of authorised expenses (if outstanding).
• Any applicable statutory or contractual entitlements that go beyond the NES (for example, some enterprise agreements or contracts add benefits).

Timing matters too. Pay outstanding amounts promptly after the end date (check the award or agreement for any specified timeframes). For a step-by-step approach to getting this right, see our guide to final pay.

Notice pay is usually not owed to casuals under the NES. If you’re unsure about notice (for example, where a contract promises it), read up on how payment in lieu of notice works and check the interaction with your award or agreement. As a rule of thumb, stick to what your contract and industrial instrument say where they offer more generous terms than the NES.

Be cautious with pay deductions. If you intend to deduct for items like unreturned uniforms, you’ll need a lawful basis and written authorisation that primarily benefits the employee. Otherwise, you may breach the Fair Work Act. Our overview on withholding pay from employees covers the rules.

If there’s a conduct investigation, it’s often safer to complete that process first (including any suspension where appropriate) and then finalise pay. Where necessary, review your options around standing down an employee pending investigation to preserve fairness and minimise risk.

Practical Tips For A Smooth Exit

• Check status before acting: Confirm whether the person is still a genuine casual or has been working in a way that increases dismissal risks (regular and systematic, expectation of ongoing work).
• Align documents and practice: Make sure your award, enterprise agreement, Casual Employment Contract and policies match how you roster and pay casuals.
• Use a simple process: Where possible, follow a short, consistent process - confirm the decision in writing, specify the effective date, and set out final pay and property return.
• Document your reason: Keep a file note outlining your operational basis or the steps taken on conduct/performance matters. If an issue escalates, you’ll be grateful for the paper trail.
• Pay correctly and on time: Final pay accuracy and timeliness reduce the chance of claims.
• Train your managers: The way a conversation is handled can be the difference between a clean exit and a complaint.

Key Takeaways

• Casuals generally have no NES entitlement to notice or redundancy pay, but awards, agreements or contracts can add obligations - check them before acting.
• A brief termination letter isn’t always legally required, but it provides clarity, documents the end date, and reduces the risk of misunderstandings.
• Process still matters: regular and systematic casuals may access unfair dismissal after the minimum employment period, and general protections apply from day one.
• Keep letters concise and respectful, and consider a show cause step for conduct or performance concerns to support procedural fairness.
• Finalise pay accurately (hours, loading, allowances, long service leave where applicable) and on time; avoid unlawful deductions.
• Align your contracts, policies and practices - standardised termination documents and a robust Casual Employment Contract help prevent disputes.

If you’d like a consultation on preparing a fair and compliant casual termination letter for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.