How To Write an Employee Termination Letter (Australia)

Ending someone’s employment is tough. But a clear, accurate and respectful employee termination letter helps you meet your legal obligations, reduce confusion, and close things out professionally.

In Australia, written notice of termination is generally required under the Fair Work Act for most employees, so the letter isn’t just “best practice” - it’s part of a compliant offboarding process. In this guide, we’ll cover what the law expects, what to include, a step-by-step drafting process, a simple template, and common mistakes to avoid.

If you’re handling a performance, misconduct or redundancy matter, it’s normal to feel unsure about wording. The good news is you can follow a straightforward structure and get the details right from the start.

What Is An Employee Termination Letter?

An employee termination letter is the written notice that confirms the end of employment. It sets out the decision, the last day of employment, any applicable notice (or payment in lieu), final pay and entitlements, and what needs to happen next (like returning company property).

Beyond clarity, it creates a contemporaneous record of what was communicated and when, which can be crucial if there’s a later dispute. A well-drafted letter uses plain English, stays factual, and avoids emotional or unnecessary detail.

Is A Written Termination Letter Legally Required?

Yes, in most cases. Under Australian law, employers must give written notice of termination to employees (with limited exceptions). The written notice must state the day employment ends. Key points:

• Written notice is generally required for permanent employees. The requirement applies even when employment ends immediately for serious misconduct (notice of termination still needs to be confirmed in writing; the difference is no notice period is owed).
• Casual employees typically aren’t entitled to notice, but it’s still wise to confirm the end of engagement in writing to keep a clear record.
• Some fixed-term contracts end automatically on the expiry date. If you’re ending early, written notice will usually still be required under the contract and the law.
• Modern awards and enterprise agreements can impose additional consultation or notification steps (especially for redundancy or roster changes). Always check the instrument that applies to your workplace before you finalise the letter.

Where you are paying out a notice period instead of having the employee work it, make sure your approach aligns with payment in lieu of notice rules and any relevant award or agreement.

What To Include In A Termination Letter

Use this as your practical checklist. Your termination letter should include:

• Date of the letter: The date you issue the notice.
• Employee details: Full name, position title and (optionally) employee ID.
• Clear statement of termination: Confirm employment is ending and specify the final date of employment (last day).
• Reason (brief and factual): Redundancy due to genuine operational change, underperformance following a process, serious misconduct, end of fixed term, business closure or restructure. Keep it objective.
• Notice period or payment in lieu: State the amount of notice that applies under the National Employment Standards (NES), any award/enterprise agreement, and the contract - and whether the employee will work it or be paid in lieu.
• Final pay and entitlements: Outline what will be paid and when (e.g. unpaid wages to last day, unused annual leave, and any redundancy pay if applicable). If relevant, link the approach back to your payroll schedule and how the payment will be made. A helpful reference here is our guide to calculating final pay.
• Superannuation: Super is typically paid to the employee’s nominated fund (not as cash in the final payslip). Whether super is payable on specific termination components depends on the rules for ordinary time earnings and the nature of the payment - see super on termination payments and ordinary time earnings for detail.
• Company property and information: Laptops, phones, keys, access cards, documents and confidential information - specify how and when these must be returned, and how accounts will be deactivated.
• Post-employment obligations: Remind the employee of any ongoing duties, such as confidentiality or restraints, consistent with their Employment Contract and your policies.
• Supporting documents and next steps: Confirm who to contact (HR/payroll) for questions. If requested by the employee for government support, you must provide an employment separation certificate - it isn’t automatically required in every termination.
• Signature: Signed by the authorised decision-maker (manager, HR or director).

Keep the tone professional and courteous. You don’t need to recap every conversation or attach all evidence - the letter’s job is to clearly confirm the decision, key dates and entitlements.

Step-By-Step: Drafting And Delivering The Letter

1) Check Your Instrument And Process

• Review the contract, any applicable modern award or enterprise agreement, and your workplace policies (performance management, misconduct, redundancy and consultation).
• Make sure you have followed a fair process appropriate to the reason for termination. For conduct or performance matters, that often includes prior communication and, where appropriate, a show cause letter and consideration of the employee’s response.

2) Confirm Notice And Final Day

• Work out the minimum notice based on continuous service and any additional obligations under an award/enterprise agreement or the contract.
• Decide whether the employee will work the notice period or receive payment in lieu. If paying in lieu, calculate the right amounts and timing.

3) Draft The Letter (Keep It Factual)

• Start with a clear statement that employment is ending and state the last day of employment.
• Provide a short reason (e.g. genuine redundancy following consultation obligations, unsatisfactory performance after warnings, serious misconduct). Avoid editorialising.
• List what will be paid (and when), such as unpaid wages to the last day, unused annual leave, and redundancy pay if applicable. If relevant, note how superannuation will be contributed to the nominated fund, and consider whether particular components attract super based on superannuation rules.
• Set out return-of-property arrangements and access removal timeframes.
• Provide a contact point for questions and note any document you will provide on request (e.g. an employment separation certificate).

4) Double-Check Dollars And Dates

• Cross-check calculations against your payroll system and your obligations - especially for redundancy and long service leave where state and award rules can differ. This final pay guide and our redundancy payment overview are helpful references.
• Confirm the last day of employment, last working day (if different), and when final payments will be processed.

5) Deliver The Letter Correctly

• Provide written notice in person where practical, and follow up by email if appropriate. If delivering remotely, send to the employee’s last known address (as allowed by law) and/or by email if permitted by the contract or agreed practice.
• Keep evidence of how and when you sent the letter and any attachments (payslips, entitlements summary, property checklist).

6) Close Out System Access And Property Return

• Have a checklist to collect property, disable system access and retrieve confidential information. Confirm the post-employment obligations that continue (for example, confidentiality or reasonable non-solicitation, where applicable).

Simple Termination Letter Template

Use this general template as a starting point and tailor it to the reason for termination, your legal instrument and your facts.

Dear ,

RE: NOTICE OF TERMINATION OF EMPLOYMENT

We write to confirm that your employment with  will end on .

Reason
Your employment is ending due to .

Notice
In accordance with the National Employment Standards and your , your notice period is . .] 

Final Pay
You will receive:
- Unpaid wages up to and including your last day
- 
- Accrued but unused annual leave 
- 

These amounts will be processed on  and paid to your nominated bank account. Any superannuation contributions will be made to your nominated fund in line with our usual payroll cycle and applicable superannuation rules.

Company Property
Please return all company property (including ) by  and ensure all company information (including electronic files and passwords) is returned or securely deleted as directed.

Further Information
If you have questions about your final pay or employment records, please contact  at . If you require an employment separation certificate for Services Australia, please let us know and we will provide it.

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

Yours sincerely,

For higher-risk situations or complex entitlements, it’s sensible to have your documents reviewed or to engage a tailored suite of termination documents to keep everything consistent and compliant.

Legal Requirements, Timing And Common Pitfalls

Notice Periods And Payment In Lieu

Under the National Employment Standards, permanent employees are entitled to minimum notice based on length of service (plus an extra week if the employee is over a specified age and has a certain period of service). You can require the employee to work out the notice or you can provide payment in lieu of notice. The decision (and the calculation) should be clearly explained in the letter.

Whether superannuation is payable on a payment in lieu depends on whether that payment counts towards ordinary time earnings - see this overview of payment in lieu and superannuation.

Redundancy Must Be Genuine

If the reason is redundancy, ensure it’s a genuine redundancy (you no longer require the job to be done by anyone due to operational changes), you’ve met any consultation obligations, and you’ve explored redeployment where reasonable. Entitlement to redundancy pay will depend on service length and employer size, with some exemptions. If redundancy pay applies, explain it clearly and consider attaching a calculation summary, using our redundancy calculation guide as a cross-check.

Unfair Dismissal Risk And Process

Unfair dismissal claims turn on whether the termination was harsh, unjust or unreasonable and whether a fair process was followed. Before you finalise the letter, make sure you have:

• Identified the valid reason (e.g. capacity, conduct, or genuine redundancy).
• Provided the employee an opportunity to respond to concerns, where required and reasonable.
• Considered any relevant factors such as length of service, prior performance record, and the availability of support people during meetings (where appropriate).

The termination letter should reflect that the required steps have been taken. If in doubt, consider tailored advice - particularly for misconduct or capability matters.

Employment Separation Certificate

You don’t need to automatically issue a separation certificate. However, if an employee asks for one to support a Services Australia claim, you must provide it. Your letter can simply note that the business will provide it upon request - and keep a copy of what you provide for your records. Our guide to employer separation certificates outlines common questions.

Superannuation On Termination Payments

Super isn’t a “lump sum” to the employee on exit; it’s contributed to their fund. Some termination components attract super while others don’t. To avoid errors (and potential penalties), check which components are ordinary time earnings and which aren’t. Start with this explainer on superannuation on termination payments and align your payroll settings accordingly.

Delivery And Record-Keeping

Make sure the written notice is actually received. Deliver in person where possible, or send to the last known address and (if permitted) by email. Keep proof of delivery and copies of everything you sent. If a dispute arises later, contemporaneous records are your best friend.

Respectful Tone And Consistency

The letter should be respectful and consistent with prior communication. Avoid new allegations or language that could be misconstrued. If you’ve relied on a performance process or misconduct findings, the letter should summarise the outcome, not relitigate every detail.

Post-Employment Obligations

It’s reasonable to remind the employee about ongoing obligations like confidentiality. If you rely on any restraint of trade (for example, non-solicitation of clients for a limited time), ensure it’s reasonable and consistent with the contract and local law before referencing it expressly.

Key Takeaways

• Written notice of termination is generally required in Australia and must state the last day of employment - your termination letter is how you meet that requirement and keep the process clear and professional.
• Include the essentials: dates, a brief reason, notice or payment in lieu, final pay and entitlements, property return and a contact point for questions.
• Align notice and entitlements with the NES, any award/enterprise agreement and the contract, and calculate final pay correctly using a simple checklist or a final pay guide.
• Redundancy must be genuine and consulted on; if it applies, set out redundancy pay clearly and check your numbers against a redundancy calculation.
• Super is paid to the fund, not as cash to the employee, and whether super applies to particular exit payments depends on ordinary time earnings rules.
• If the employee requests it for Services Australia, you must provide an employment separation certificate; it’s not automatically required in every case.
• Deliver the letter properly and keep thorough records - clear documentation is your best protection if a dispute arises.

If you’d like a consultation on drafting or reviewing an employee termination letter - or need help with a compliant end-to-end termination process - you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.