Understanding Termination Notices In Australia

Ending employment is never easy, but getting the notice and paperwork right makes the process clearer and legally safer for everyone involved.

Whether you’re an employer planning to end someone’s employment, or an employee preparing to resign, a termination notice sets expectations about timing, next steps and final entitlements. The key is knowing when notice is required, how much is required, and what should be included in writing under Australian law.

In this guide, we break down what a termination notice is, how the National Employment Standards (NES) apply, when immediate (summary) termination can occur, and what to include in the letter. We’ll also cover final pay and practical tips so you can navigate the process with confidence.

What Is A Termination Notice?

A termination notice is a written communication from one party to the other confirming the employment will end and stating the last day of employment. It is commonly given by an employer (dismissal) or by an employee (resignation).

For employers, the Fair Work Act’s National Employment Standards require written notice for most permanent (full-time and part-time) employees, unless the employee is being dismissed for serious misconduct. For employees, resignation notice usually comes from what’s in the employment contract or an applicable award or enterprise agreement (there’s no NES minimum for employee resignations).

A clear, dated notice helps both sides plan handover, manage access and property, and prepare the final pay correctly.

How Much Notice Is Required?

Under the NES, when an employer ends the employment of a permanent employee (other than for serious misconduct), the minimum notice periods are:

• Less than 1 year of continuous service: 1 week
• 1 to 3 years: 2 weeks
• 3 to 5 years: 3 weeks
• More than 5 years: 4 weeks
• Add 1 extra week if the employee is over 45 years old and has at least 2 years of continuous service

These are legal minimums. An award, enterprise agreement or employment contract may require a longer period, but never less than the NES minimum.

Employee Resignations

The NES doesn’t set a minimum resignation notice for employees. Instead, check the contract or any applicable award or enterprise agreement for resignation notice requirements. If it’s silent, reasonable notice may be expected in practice (depending on role and circumstances), but the safest position is to follow whatever the contract or award says.

Part-Time And Casual Employees

Part-time employees are covered by the same NES minimums as full-time employees.

True casual employees generally don’t receive, or need to give, notice under the NES because their work is irregular with no firm advance commitment. However, a specific contract or award can impose notice requirements for casuals, so it’s important to check the relevant instrument.

Fixed-Term Contracts

When a genuine fixed-term contract expires on its stated end date, the employment typically ends without additional notice (unless the contract or applicable award says otherwise). It’s still good practice to confirm the end date in writing, so there is no confusion.

Can You Terminate Immediately (Without Notice)?

Immediate termination, often called summary dismissal, is generally only lawful for serious misconduct (for example, theft, violence or serious breaches of policy). In those cases, the employee is not entitled to notice or pay in lieu of notice.

That said, summary dismissal is high-risk if the facts are unclear. Before making a decision, it’s wise to:

• Follow a fair process, including giving the employee a chance to respond to allegations (often via a show cause letter).
• Consider whether a short-term precautionary step like standing an employee down pending investigation is more appropriate while you gather facts.
• Assess unfair dismissal risks using factors in section 387 of the Fair Work Act (for eligible employees).

If you decide summary dismissal is justified, the written notice should say the employment ends immediately, explain the reason, and set out how final wages and any other entitlements will be handled.

How To Deliver Notice (And When To Use Payment In Lieu)

Best practice is to deliver notice in person where possible, followed by written confirmation on company letterhead. If in-person delivery isn’t practical, send it by email (to the employee’s known address) or by registered post. Keep a record of how and when you gave the notice.

If you want the employment to end straight away but the employee is entitled to notice, you can use payment in lieu of notice. This means you pay the amount the employee would have earned during the notice period and make the termination effective immediately.

• Learn how to structure payment in lieu of notice.
• Consider whether super applies to that payment with this guide to payment in lieu and superannuation.

Always check any award, enterprise agreement or contract for extra rules about notice, delivery method or payout options.

What Should A Termination Notice Include?

A clear, written termination notice or letter typically covers:

• Date of the letter and the employee’s name/position
• A clear statement that employment will end
• The last day of employment (or that the termination is immediate for serious misconduct)
• The reason for termination if appropriate (not always required, but often helpful for clarity)
• How notice will be handled (worked or paid in lieu)
• Outline of final pay components and timing (wages, annual leave, long service leave if applicable, redundancy if applicable)
• Practical steps: return of property, access removal, handover expectations, and a contact for questions

For resignations, employees should also provide a simple written notice stating that they’re resigning and the intended final day, consistent with any notice requirement in their contract or award.

Final Pay And Entitlements When Employment Ends

Getting final pay right is essential. The exact components depend on the reason for ending employment, the employee’s status and the applicable industrial instrument. As a starting point, think about:

• Final wages: Include all hours worked (and any payable overtime or allowances) up to the last day.
• Accrued annual leave: Permanent (full-time and part-time) employees are paid out unused annual leave on termination. Casuals do not accrue annual leave, so there’s no annual leave payout for casual employees.
• Long service leave: May be payable depending on state/territory legislation and the employee’s service. Timing and calculation rules vary by jurisdiction.
• Redundancy pay: Payable under the NES where criteria are met; some employers (for example, small business employers) are exempt. Check if an award or enterprise agreement changes or adds to these rules.
• Payment in lieu of notice: If you’re not having the employee work their notice period, make the appropriate payment in lieu (and consider whether super applies).
• Superannuation: Pay any super due on ordinary time earnings up to the termination date (and consider whether super applies to any other termination components).

For a step-by-step on timing and components, see this guide to calculating final pay. If the employee is leaving voluntarily, it’s also worth checking specific rules around annual leave on resignation.

If redundancy is involved, ensure the situation meets the legal definition and consider entitlements using a redundancy calculator as an initial sense-check (then verify against the NES and any applicable award or enterprise agreement).

Best-Practice Tips For Employers

• Check the paperwork first: Review the employment contract, any applicable award or enterprise agreement, and your policies before starting the process.
• Map the timeline: Confirm the correct notice period (if any), how it will be delivered, and whether you’ll use payment in lieu.
• Use a fair process: If termination relates to conduct or performance, follow a procedurally fair pathway (warnings, meetings, an opportunity to respond). This can reduce risk under the unfair dismissal factors in section 387.
• Document everything: Keep notes of meetings, copies of letters and emails, and confirmation of when notice was given.
• Be clear and respectful: Keep the tone professional in discussions and in writing, and offer a direct contact for questions.
• Close out access and property: Plan practical steps like collecting equipment and revoking system access on or after the last day.
• Pay on time: Process the final pay promptly and accurately, including any applicable leave and super.

Key Takeaways

• Employers must provide written notice for most permanent employees under the NES, unless it’s lawful summary dismissal for serious misconduct.
• Minimum notice depends on years of service (with an extra week for eligible employees over 45); contracts and awards can require more.
• Casual employees generally don’t receive or give notice under the NES, and they don’t accrue annual leave, so there’s no annual leave payout for casuals.
• Payment in lieu of notice is an option if you need the employment to end immediately; always check how super applies to any termination components.
• Final pay should cover wages to the last day, any accrued annual leave for permanent staff, long service leave where applicable, and redundancy pay if eligible.
• A fair, well-documented process (including appropriate letters) reduces legal risk and supports a respectful transition for everyone.

If you’d like a consultation on termination notices, notice periods or final pay obligations, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.