Issuing A Notice Of Dismissal In Australia: Employer’s Legal Requirements

Letting someone go is one of the hardest parts of running a team. As an employer in Australia, you not only have to handle a sensitive conversation - you also need to get the legal steps right.

Issuing a notice of dismissal sits at the centre of that process. Done properly, it helps you comply with the Fair Work system, tidy up final entitlements, and reduce the risk of disputes.

In this guide, we’ll break down when you need to give notice, the minimum notice periods under the National Employment Standards (NES), how to provide notice (including pay in lieu), and where unfair dismissal and redundancy rules fit in. We’ll also share a practical, step-by-step process and the key documents to have ready so you can move forward with clarity and confidence.

What Is A Notice Of Dismissal (And When Is It Required)?

A notice of dismissal is the written communication you give an employee to confirm that their employment will end and the date it ends. Under the Fair Work Act 2009 (Cth), most employees are entitled to notice (or pay in lieu) when you terminate their employment.

In general, notice is required when you end an ongoing employment relationship, including for performance, conduct or capacity reasons, or due to operational changes in your business.

There are some common exceptions where notice is not required under the NES:

• Serious misconduct that justifies summary (immediate) dismissal
• Casual employees (as defined under the Fair Work Act)
• The expiry of a genuine fixed-term contract (unless an award, enterprise agreement or contract requires notice)

If you’re unsure whether notice applies in your situation, check the employment contract, any relevant modern award or enterprise agreement, and the NES. Where the circumstances are complex, it’s wise to speak with an employment lawyer early.

Minimum Notice Periods Under The NES

The NES sets the minimum notice an employer must give (or pay in lieu), based on the employee’s continuous service:

• Less than 1 year: 1 week
• 1 to under 3 years: 2 weeks
• 3 to under 5 years: 3 weeks
• 5 years or more: 4 weeks

Employees who are at least 45 years old and have completed at least 2 years of continuous service are entitled to one additional week of notice.

You can always provide more notice than the minimum, but not less. Employment contracts and modern awards can extend minimum notice requirements. If you’re calculating lead times for workforce changes, it helps to confirm your obligations against a clear guide to employment notice periods in Australia.

Do I Have To Give Reasons In The Notice Letter?

The Fair Work Act requires notice of termination to be given in writing and to specify the end date. It does not require the letter itself to set out detailed reasons in every case. That said, it’s good practice to keep your records clear and, where appropriate, briefly summarise the basis for ending employment in the letter or in accompanying documents (especially where performance or conduct is relevant). The key is consistency with the process you’ve followed and what’s already been discussed with the employee.

How Do I Deliver The Notice?

Notice must be in writing and given to the employee. In practice, employers commonly:

• Hand the letter to the employee in person at a meeting
• Send it by pre-paid post to the employee’s last known address
• Provide it electronically if your contract or policies allow and you can verify receipt

Whichever method you use, keep evidence that the notice was given and the date it took effect.

Pay In Lieu, Final Pay And Closing Out Employment

Instead of requiring an employee to work through their notice period, you can provide payment in lieu. The amount must equal the pay the employee would have received if they had worked to the end of the notice period, including ordinary wages and any loadings or allowances they would have earned.

For clarity around when and how to do this, many employers follow a clear internal process aligned with guidance on payment in lieu of notice.

When employment ends, you also need to pay final entitlements promptly. This typically includes:

• Outstanding wages up to the last day of employment (or to the end of the notice period if paying in lieu)
• Accrued but unused annual leave (and annual leave loading if applicable)
• Long service leave (according to state or territory legislation)
• Redundancy pay if applicable (see redundancy section below)
• Superannuation on ordinary time earnings; whether super applies to particular termination amounts depends on the rules around ordinary time earnings, including superannuation treatment of payment in lieu

It’s a good idea to reconcile everything in a single statement and ensure payroll is aligned with your final pay calculation.

Fair Process, Unfair Dismissal And Small Business Rules

It’s normal to wonder how much process is “legally required.” Here’s the practical way to look at it.

Procedural Fairness And “Valid Reason”

The Fair Work Act doesn’t mandate a one-size-fits-all disciplinary process for every dismissal. However, if an employee is eligible to bring an unfair dismissal claim, the Fair Work Commission will consider whether there was a valid reason related to capacity or conduct and whether a fair process was followed (e.g. notifying the employee of concerns and giving them a chance to respond) when deciding if the dismissal was harsh, unjust or unreasonable.

As a rule of thumb, if an employee has completed the minimum employment period (generally 6 months, or 12 months for a small business with fewer than 15 employees) and earns under the high-income threshold or is covered by an award/enterprise agreement, treat these procedural elements seriously to reduce risk.

Small Business Fair Dismissal Code

For employers with fewer than 15 employees, the Small Business Fair Dismissal Code applies. If you comply with the Code (including offering warnings for underperformance or relying on a reasonable belief of serious misconduct for summary dismissal), this can be a strong defence to an unfair dismissal claim. Keep simple, contemporaneous records of meetings, warnings and decision-making.

Serious Misconduct

Summary dismissal may be justified if you reasonably believe the employee engaged in serious misconduct (such as theft, fraud or violence). Even then, it’s sensible to suspend or stand the employee down while you consider the matter and to offer an opportunity to respond before making a final decision. Many employers use a structured approach that can include a show cause process (see show cause letters) and, where appropriate, standing an employee down pending investigation.

Redundancy Vs Dismissal For Conduct/Performance

Redundancy is different from dismissal for conduct or performance. A job is redundant when it’s no longer required to be done by anyone due to changes in your operational requirements (for example, a restructure, technology change or downturn).

Consultation And Redeployment

Most modern awards and enterprise agreements include consultation obligations about major workplace change. If an employee is covered by an applicable award or EA with a consultation term, you must consult them (and any representatives) before making a final decision, consider their input and explore reasonable redeployment opportunities. If no award or EA applies, consultation may still be best practice and relevant to whether a redundancy is “genuine” for unfair dismissal purposes.

Redundancy Pay (And The Small Business Exemption)

Employees (other than casuals) may be entitled to redundancy pay under the NES based on length of service, unless an exemption applies. There is an exemption for small businesses with fewer than 15 employees. There are also role-specific and tenure-based exemptions. If redundancy pay is payable, you’ll need to calculate it alongside notice and other final entitlements - tools like a redundancy calculator and guidance on calculating redundancy payments can help you scope the cost before you consult.

Genuine Redundancy And Unfair Dismissal

A dismissal will not be unfair if it’s a “genuine redundancy” - meaning the job is no longer required, you complied with any consultation obligations in an award/EA, and it wasn’t reasonable to redeploy the employee within your business or an associated entity. Keep records of your consultation steps and redeployment checks.

Practical Steps To Issue A Notice Of Dismissal (The Right Way)

Here’s a simple, legally sound workflow you can follow. Adapt it to suit the nature of the dismissal and any award/EA obligations.

1. Check coverage and eligibility. Confirm the employee’s award/EA, service length and whether they could bring an unfair dismissal claim. For small businesses, note the Small Business Fair Dismissal Code.
2. Review the contract and policies. Look for termination clauses, notice, disciplinary steps, and any agreed method of notice (e.g. electronic delivery). If your template needs an update, consider implementing a robust Employment Contract for future hires.
3. Plan the process. For conduct/performance, gather documents, prior warnings and meeting notes; for redundancy, prepare your consultation plan and consider redeployment options.
4. Meet with the employee. Where possible, hold a private meeting with a support person or witness available. Explain the decision, timing and next steps, then hand over the written notice.
5. Confirm in writing. Provide the notice letter and any other relevant documentation (e.g. a separation certificate if requested). Ensure the letter clearly states the termination date and how final pay will be processed.
6. Finalise entitlements. Calculate notice (or pay in lieu), accrued leave, redundancy (if any), and superannuation. Align payroll with your final pay obligations.
7. Close out access and property. Arrange return of company property, cease systems access, and update HR files. Keep a tidy record trail in case questions arise later.

Common Pitfalls (And How To Avoid Them)

• Short-changing the notice period. Cross-check the NES, any award/EA and the contract. If there’s any doubt, err on the side of giving more notice or pay in lieu.
• Not documenting the process. Keep a simple file note after each meeting and store copies of warnings, performance plans and the final letter. Good records make a big difference if your decision is reviewed.
• Skipping consultation for redundancies covered by an award/EA. If a consultation term applies, follow it before you decide. This is critical to a finding of “genuine redundancy.”
• Unclear communication around final pay. Provide a breakdown: wages, leave, redundancy (if applicable) and super. Make sure the timing is prompt and consistent with legislation and your policies.
• Relying on outdated contracts. Old or generic templates can create uncertainty. Refresh your Employment Contract templates and consider a simple termination paperwork pack, such as an Employee Termination Documents Suite, to standardise the process.

Key Documents To Have Ready

You don’t need a mountain of paperwork, just the right set of documents for a clean and compliant exit:

• Employment Contract: Sets out notice, termination rights, and role obligations. A clear contract helps avoid disputes and guides your steps.
• Performance Records/Warnings: Emails, meeting notes, improvement plans and any show cause letters to demonstrate procedural fairness for eligible employees.
• Notice Of Termination Letter: Written notice confirming the last day of employment (and confirming pay in lieu if you are not requiring work during notice).
• Separation Certificate (on request): Many departing employees ask for this for government purposes; see your obligations around employer separation certificates.
• Final Pay Statement: A clear breakdown of wages, leave payouts, redundancy pay if applicable, and super treatment (including where superannuation applies to termination amounts).
• Release/Settlement Deed (where appropriate): For complex departures or negotiated exits, a deed can help both parties finalise obligations - get advice before using one.

Special Scenarios: Probation, Fixed-Term And Casual

During Probation

You still need to provide notice (or pay in lieu) consistent with the contract, award/EA and NES. While employees in probation often haven’t reached the minimum employment period for unfair dismissal, a respectful process and short file note are still best practice. If you need a quick refresher on approach and timing, see guidance on terminating during probation.

Fixed-Term Contracts

If a genuine fixed-term contract comes to an end on the specified date, you typically do not need to give notice under the NES (subject to any contractual or industrial instrument requirements). If you want to end a fixed-term early, normal notice requirements and fair process considerations can apply, depending on the contract and circumstances.

Casual Employees

Casuals are generally not entitled to notice under the NES. However, consider any contractual commitments or rostering practices that may be relevant. If a casual has been working on a regular and systematic basis, it’s still wise to communicate clearly and pay all final amounts promptly.

Key Takeaways

• Most terminations require written notice (or pay in lieu) under the NES; confirm the minimum period by service length and check any award/EA and contractual terms.
• You don’t always need to set out detailed reasons in the notice letter itself, but good records and a fair process matter - especially for employees eligible to claim unfair dismissal.
• For small businesses, the Small Business Fair Dismissal Code sets out what a fair process looks like and can help defend claims if followed.
• Redundancies involve different rules: consult under any applicable award/EA, consider redeployment and check if redundancy pay applies (noting the small business exemption).
• Close out employment cleanly: align notice or pay in lieu, calculate final pay accurately, and provide documents like a separation certificate on request.
• Well-drafted templates - from your Employment Contract to your termination letters - make the process smoother and reduce risk next time.

If you’d like a consultation or a quick review of your process for issuing a notice of dismissal, reach out to us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.