Minimum Notice Period for Termination of Employment in Australia

Ending employment is sometimes unavoidable as your business evolves. Whether it’s performance, restructuring or changing operational needs, getting termination right matters.

One of the most common questions we hear from employers is simple: what is the minimum notice period for termination of employment in Australia?

In this guide, we’ll break down the National Employment Standards (NES) minimums, when notice isn’t required, how payment in lieu and garden leave work, and the practical steps to follow so you stay compliant and reduce risk.

What Does “Minimum Notice” Mean Under The NES?

Under the National Employment Standards in the Fair Work Act 2009 (Cth), most employees are entitled to a minimum period of notice when you terminate their employment.

Two key points to remember:

• The NES sets the legal minimum. An applicable award, enterprise agreement or contract can increase the notice period, but not reduce it.
• Notice must be given by you (the employer) when you initiate the termination, unless an exception applies (more on this below).

In practice, you can have an Employment Contract that specifies longer notice. That’s often a good idea for senior or client-facing roles. But you can’t agree to less than the NES.

Minimum Notice Periods And Common Exceptions

NES Minimum Notice Periods (By Service)

For most permanent employees (full-time and part-time), the NES minimum notice periods are:

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

Plus, add 1 extra week if the employee is over 45 years old and has completed at least 2 years of continuous service.

“Continuous service” generally means unbroken employment, excluding certain types of unpaid leave. If you’re unsure how to count service for a complex scenario (e.g. transfers between group companies, long unpaid absences), it’s worth getting tailored advice.

Who Doesn’t Get Notice?

There are some important exceptions where minimum notice doesn’t apply:

• Serious misconduct: If you dismiss an employee for serious misconduct (e.g. theft, violence, serious safety breach), you can terminate without notice. You should still follow a fair process to establish the facts (see our process section below).
• Casual employees: Genuine casuals don’t get notice under the NES. Keep in mind that casual conversion rules and patterns of regular work can complicate “genuineness,” so assess the arrangement carefully.
• Fixed-term contracts ending at the nominated date: If a fixed-term agreement naturally ends on its expiry date (and you’re not ending it early), notice under the NES isn’t required.
• Some industry-specific arrangements: Certain daily hire arrangements (e.g. in building and construction) have special rules. Always check the applicable award.

How Does Redundancy Interact With Notice?

Redundancy is about the role no longer being required, not the person. If you’re making a role redundant, you’ll typically need to provide both notice (or payment in lieu) and redundancy pay (unless an exception applies).

Redundancy pay is separate from notice and depends on service length and whether you’re a “small business employer” (fewer than 15 employees). To understand potential costs, you can check a simple redundancy calculator and seek advice early.

Payment In Lieu, Garden Leave And Working Out Notice

Can You Pay Out Notice Instead?

Yes. Instead of having the employee work through the notice period, you can generally provide payment in lieu of notice (often called “PILON”).

This means you pay the full amount the employee would have earned during the notice period, and their employment ends immediately.

Consider the practical benefits of PILON: it can reduce disruption and risk (e.g. where ongoing access to systems or clients is a concern), and provide a clean break.

Be mindful of payroll and superannuation treatment when paying out notice. There are specific rules on whether super applies to this payment - see this overview of payment in lieu and superannuation for employers.

What About Garden Leave?

Garden leave is when an employee remains employed and paid during their notice period, but you direct them not to attend work (or to stay away from clients/systems). It’s a useful, lower-risk option for sensitive roles.

Whether you can place someone on garden leave depends on the contract and overall reasonableness. For an overview of how it works, read about garden leave.

Do You Have To Let Employees Use Accrued Leave In Notice?

Annual leave can be taken during notice by agreement, or directed in certain circumstances if an award/enterprise agreement or the Fair Work Act allows it. If annual leave is taken during notice, it generally counts towards the notice period. Any unused annual leave must be paid out on termination.

How Do Awards And Contracts Change The Notice You Must Give?

Many modern awards and enterprise agreements prescribe longer notice for certain classifications, or specific termination processes (e.g. consultation obligations if you’re making changes to rosters or structure).

Your Employment Contract can also set a longer notice period than the NES. That’s common for managers and executive roles, where handover time is valuable.

Remember, you can go above the minimums but never below. If different sources conflict, apply the most beneficial term for the employee in relation to notice.

Also consider the flow-on effects of how you manage the process. For instance, ensuring your process is fair and well-documented helps reduce unfair dismissal risks. The Fair Work Commission assesses fairness using factors in section 387 of the Fair Work Act - which include whether the employee was notified of the reason, had an opportunity to respond, and whether the dismissal was procedurally fair.

Step-By-Step: How To Terminate An Employee Lawfully

Here’s a practical workflow you can adapt to your business. Adjust the steps to fit performance, misconduct, redundancy, or capability-based terminations.

1) Review The Framework (NES, Award/EA, Contract, Policies)

Check the applicable modern award or enterprise agreement, the employee’s contract, and your policies to confirm minimum notice, any longer contractual periods, consultation requirements, and process steps you must follow.

If there are performance or conduct issues, ensure you’ve documented prior coaching, warnings and expectations. For redundancy, confirm genuine operational reasons and consult where required.

2) Assess The Appropriate Path (Performance vs Misconduct vs Redundancy)

• Performance/capability: Consider a performance improvement process, reasonable goals, and a fair timeframe. If issues persist, termination with notice (or PILON) may follow.
• Misconduct: For alleged misconduct, consider suspension on pay while you investigate, or “stand down” if the award/EA or law permits. See this guide on standing an employee down pending investigation.
• Redundancy: Ensure the role is genuinely no longer required, consult as required, explore redeployment options, and then implement notice and redundancy pay (if applicable).

3) Follow A Fair Process And Keep Records

Issue clear allegations or concerns and give the employee a reasonable chance to respond (and a support person, where appropriate). For misconduct or serious underperformance, a well-drafted show cause letter is a key step before making a final decision.

Good records help you evidence a valid reason and fair procedure if the dismissal is later challenged.

4) Decide On Notice: Work It, Garden Leave Or PILON

Confirm the applicable notice period and choose the cleanest approach for your risk profile. If you’re using payment in lieu or garden leave, check your contract allows it and issue a letter that clearly sets out the final employment date and entitlements payable.

5) Communicate The Decision In Writing

Provide a termination letter that:

• States the termination reason (where appropriate)
• Confirms the notice period or that payment in lieu will be made
• Specifies the final day of employment
• Summarises final payments (wages, unused annual leave, redundancy pay if applicable)
• Addresses return of property and ongoing obligations (confidentiality, restraints)

Having a suite of compliant termination documents makes this step faster and reduces errors.

6) Process Final Pay Correctly

Pay all outstanding wages and entitlements by the deadline required in the applicable award or industrial instrument (some set specific timeframes). If you’re paying out notice, confirm superannuation treatment using your payroll settings and the ATO’s guidance (and see our overview of notice and superannuation considerations).

7) Reduce Unfair Dismissal Risk

Even with correct notice, a dismissal can be challenged if it wasn’t fair. Build your process around the section 387 factors. For small businesses, the Small Business Fair Dismissal Code is relevant - but it’s not a free pass. A fair, documented process is still essential.

What About Employee Notice When They Resign?

The NES doesn’t require employees to give notice to you; the obligation usually comes from the contract or an award/EA. If an employee doesn’t give the required notice, some awards permit a limited deduction from wages. Deductions must be authorised and compliant with the Fair Work Act’s rules (see the principles in section 324 on lawful deductions).

Special Note: Medical Capacity And Other Complex Cases

Terminations relating to medical incapacity or extended illness are legally sensitive. Anti-discrimination laws and temporary absence rules can apply. If you’re in this situation, get advice before acting - this high-level guide on termination on medical grounds outlines the key risks for employers.

Key Takeaways

• The NES sets the minimum notice period when you terminate: 1-4 weeks based on continuous service, plus 1 extra week if the employee is 45+ with at least 2 years’ service.
• No notice is required for serious misconduct, casuals, or when a fixed-term contract naturally ends - but always confirm any award or contractual rules first.
• You can usually use payment in lieu or garden leave to manage risk during the notice period, provided your contract allows it and you calculate entitlements correctly.
• Awards, enterprise agreements and contracts can increase (but not reduce) the notice you must give, and may set process requirements like consultation.
• Follow a fair, well-documented process - including clear reasons, a chance to respond and compliant letters - to reduce unfair dismissal risk.
• For redundancies, remember notice and redundancy pay are separate obligations. Plan the timeline and cost impact before you act.

If you’d like a consultation on minimum notice and managing terminations in your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.