Termination of employment

About termination of employment

Your employment is terminated when your contract of employment with an employer is ended. Your employment can be terminated for several reasons, including if you resign, are made redundant, or are dismissed (fired).

If you want to resign, you may have to give notice to your employer. Your employment contract, award or enterprise agreement may set out the notice period. In some cases, if you don't give enough notice your employer may be able to withhold some of your final pay.

For more information, see Resignation and notice on the Fair Work Ombudsman website.

Notice of termination

If your employer dismisses you, they must give you notice unless you were dismissed because of serious misconduct. The minimum notice period your employer must give you is based on the length of time you were employed. Your award, enterprise agreement or contract could entitle you to a greater period of notice.

You are entitled to an extra week's notice if you are over 45 years old and you have at least two years of continuous service with your employer.

Not all employees are entitled to notice. For example, casual employees may not be entitled to notice. You should get legal advice if you have been dismissed and you are not sure how much notice you are entitled to.

For more information, see Dismissal and notice on the Fair Work Ombudsman website.

Payment in lieu of notice

Instead of giving you the required period of notice, your employer can pay you an amount equal to your wages for the period of notice you are entitled to and ask you to leave straight away. This is called a payment in lieu of notice.

If your employer decides to pay you in lieu of notice, you will normally receive this payment with your final termination pay. 

You should be paid your full rate of pay for the hours you would have worked until the end of the notice period. Your full rate of pay includes any overtime, penalty rates, allowances, bonuses or commissions you would have normally earned over that period. Your employer can deduct amounts for tax.

If you are not paid or you haven't been paid the right amount, there are steps you can take to try and recover the money that you are entitled to.

For more information, see What if my entitlements are not paid?

Redundancy

An employee's position is made redundant when their employer no longer needs a role to be performed, or no longer needs the same number of employees to perform certain tasks. An employee may be made redundant because:

• the job they have been doing is replaced because their employer introduced new technology (that is, it can be done by a machine)
• business slows down
• the business moves
• a merger or takeover happens
• the business restructures or reorganises
• the employer stops trading because they became bankrupt or went into liquidation.

If you are made redundant, you may be entitled to redundancy pay.

For more information, see Redundancy pay.

Responding to your termination

If you have been dismissed, your dismissal may have been unfair, or in breach of a general protection. If that is the case, you may be able to make a claim for either unfair dismissal or general protections dismissal. You cannot make both claims.

You may even have other options such as a:

• discrimination claim (if you have been discriminated against at work)
  
• bullying claim (if you are experiencing any workplace bullying).

You should get legal advice about your options.

If you have been dismissed and you believe you haven't been paid all your wages of other entitlements by your employer, you can also make a claim against them. You can still make this claim even if you have started an unfair dismissal or general protections dismissal claim. You can also make a claim if you resigned or are still working for the employer.

For information on the differences between an unfair dismissal claim, a general protections dismissal claim, and a claim for unpaid wages and entitlements, see How do I choose?

Unfair dismissal

Unfair dismissal is when your dismissal was harsh, unjust, or unreasonable. If you worked at a place with less than 15 employees, your employer must also follow the Small Business Fair Dismissal Code.

In some cases, if you have been the subject of an unfair dismissal, you can make an application to the Fair Work Commission. 

For more information about unfair dismissal, see Unfair dismissal.

Your dismissal will not be considered unfair dismissal if it was a genuine redundancy. However, if you are made redundant, you may be entitled to a payout. 

For more information, see Redundancy pay.

General protections dismissal 

General protections dismissal is when you were fired and your general protection rights were breached by your employer.

Your general protection rights are rights you have as an employee, and they include the right to be paid correctly, to take time off work if you are sick, not to be discriminated against and to join (or not join) a union.

In some cases, if you have been the subject of a general protections dismissal, you can make an application to the Fair Work Commission.

For more information, see General protections dismissal.

If you are a national system employee, you may be able to make a claim of unlawful termination if you can’t make a General protections dismissal because the reason you were dismissed was not prohibited by general protections provisions.

For more information, see Unlawful termination on the Fair Work Commission website.

State-system employees

Most employees are covered by the national laws relating to employment. If you work for a government agency, a Local Council or a NSW state government owned corporation, you may be a state system employee and your employment is covered by different rules.

If you are a state system employee and have been dismissed by your employer, you may be able to make a claim.

For more information, see:

• Unfair dismissals on the Industrial Relations Commission website 
• Unlawful termination on the Fair Work Commission website.