Ending Employment: What Employers Need to Know
- anytimeassist
- Feb 16
- 3 min read
At some point, businesses with employees will need to end an employment relationship. This can happen for many reasons — an employee resigns, a role is no longer required, or performance issues mean the role isn’t the right fit.
No matter the reason, employers have obligations under the National Employment Standards (NES), and often under awards, agreements or workplace policies as well. These obligations apply to all businesses, including small businesses.
Your core obligations when employment ends
When an employee’s employment ends, employers generally need to:
give written notice (unless an exception applies)
provide payment in lieu of notice if the employee doesn’t work out their notice period
pay the employee’s final pay, including any outstanding entitlements
You should also check:
the relevant Modern Award, if one applies
any enterprise agreement
the employee’s employment contract
These documents may include additional obligations or longer notice periods.
Dismissal
Dismissal is when the employer decides to end the employment relationship.
Key points to be aware of:
full-time and part-time employees are generally entitled to notice
notice can be worked, paid out, or a combination of both
casual employees aren’t entitled to notice, but minimum payment rules may still apply
small businesses (fewer than 15 employees) must follow the Small Business Fair Dismissal Code
eligible employees may be able to lodge an unfair dismissal claim if a dismissal is harsh, unjust or unreasonable
If dismissal is due to serious misconduct, notice isn’t required — but outstanding entitlements must still be paid.
Resignation
When an employee resigns, different rules apply.
Important things to know:
an award, agreement or contract may require the employee to give notice
the notice period starts the day after notice is given
employers can’t refuse a resignation
employers may allow the employee to work out the notice or pay it out
annual leave during a notice period can only be taken if both parties agree
If an employee leaves without notice, you’ll need to check whether any deductions are allowed under the award or agreement.
Redundancy
Redundancy occurs when a job is no longer required or the business closes.
Key considerations:
redundancy obligations differ from dismissals for performance or conduct
awards and agreements require consultation where major workplace changes occur
small businesses generally don’t have to pay redundancy pay, but some awards do require it
genuine redundancy prevents an unfair dismissal claim
It’s important to understand whether a redundancy is considered genuine, as this affects employee rights.
Notice periods and final pay
Minimum notice periods under the NES depend on an employee’s length of service, with an extra week for some employees over 45 years of age.
Final pay typically includes:
payment for hours worked
payment in lieu of notice (if applicable)
accrued but unused annual leave
long service leave, where applicable
Final pay must be paid within the timeframe set by the relevant award or agreement.
Protections at work
Employees are protected from adverse treatment when exercising workplace rights, such as:
asking about pay
requesting leave
raising concerns
Employees are also protected from discrimination based on attributes like age, race or pregnancy. These protections apply regardless of employment ending.
More Information
Ending employment is a normal part of running a business, but it’s important to approach it with clarity and care. Understanding your obligations around notice, final pay and employee protections helps ensure the process is fair, compliant and professionally handled.
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