Notice of termination & redundancy pay

Overview An employee’s full pay rate includes the following:

Notice of termination and redundancy pay form part  incentive-based payments and bonuses
of the National Employment Standards (NES). The  loadings
NES apply to all employees covered by the national
 monetary allowances
workplace relations system, regardless of any award,
agreement or contract.  overtime or penalty rates
The NES establish the minimum entitlement to the  any other separately identifiable amounts.
notice period, or payment in lieu of notice, that an
Period of continuous service Minimum notice
employer must give an employee to end their
period
employment. This applies to all employees (other
than casuals), not just those covered by the national 1 year or less 1 week
workplace relations system. More than 1 year – 3 years 2 weeks
More than 3 years – 5 years 3 weeks
The NES also outline the redundancy pay an
employee may receive at the end of their More than 5 years 4 weeks
employment. This entitlement only applies to
employees covered by the national workplace Employees over 45 years old who have completed at
relations system. least 2 years of service when they receive notice are
given an additional week of notice.
Notice of termination Does nofice of terminafion apply to all
An employer must provide an employee with
employees?
written notice of the day of termination when
Under the NES, an employer does not need to
ending their employment. Some exceptions apply
provide notice of termination (or payment in lieu of
(see below).
notice) to employees who:
An employer may give notice to the employee by
 are casual
either:
 are employed for a set period of time or a
 delivering it personally season (for example, a fixed term contract
 leaving it at the employee’s last known or a seasonal fruit picker)
address  are fired because of serious misconduct (for
 sending it by pre-paid post to the example, engaging in theft, fraud, sexual
employee’s last known address harassment or assault)
 if the employee agrees, sending it  have a training arrangement and are
electronically by email or text message. employed for a set period of time or for the
An employee may also need to give their employer length of the training arrangement (other
notice of termination if their award or enterprise than an apprentice)
agreement specifies it.  are daily hire working in the building and
construction industry or the meat industry in
What amount of nofice must be given? connection with the slaughter of livestock
An employer must not dismiss an employee unless
 are weekly hire working in connection with
they have either:
the meat industry and whose termination
 given the minimum period of notice depends on seasonal factors (but not where
termination is due to other reasons).
 paid the employee instead of giving notice.
This is paid at the employee's full pay rate as An award or enterprise agreement may have
if they had worked the minimum notice different notice provisions for daily hire employees
period. which could apply instead of those listed above.

Fair Work Infoline: 13 13 94 www.fairwork.gov.au

An apprentice gets notice of termination, unless Period of continuous service Redundancy pay
they're: At least 1 year but less than 4 weeks
2 years
 employed for a set period of time, or
At least 2 years but less than 6 weeks
 fired for serious misconduct. 3 years
It can help to look at an employee’s employment At least 3 years but less than 7 weeks
contract to see if they’ve been employed for a set 4 years
period of time. At least 4 years but less than 8 weeks
5 years
Redundancy At least 5 years but less than 10 weeks
Redundancy occurs when an employer either 6 years
decides they no longer need an employee's job to be At least 6 years but less than 11 weeks
done by anyone, or the employer becomes insolvent 7 years
or bankrupt, and terminates their employment. At least 7 years but less than 13 weeks
The job itself, not the employee, becomes 8 years
redundant. Redundancy can happen when the At least 8 years but less than 14 weeks
business: 9 years
At least 9 years but less than 16 weeks
 introduces new technology (for example, the 10 years
job can be done by a machine) 12 weeks*
At least 10 years
 slows down due to lower sales or production
*There is a reduction in redundancy pay from 16
 closes down
weeks to 12 weeks for employees with at least 10
 relocates interstate or overseas years continuous service. This is consistent with the
 restructures or reorganises because a 2004 Redundancy Case decision made by the
merger or takeover happens. Australian Industrial Relations Commission.

What redundancy pay is payable? Reducing redundancy pay

Employees receive redundancy pay based on their An employer can apply to the Fair Work Commission
continuous period of service with their employer. to have the amount of redundancy they have to pay
This amount is paid at the employee's base pay rate reduced if:
for ordinary hours worked.  the employer finds other acceptable
An employee's base rate of pay (other than a employment for the employee, or
pieceworker) is the pay rate they receive for working  the employer can’t afford the full
their ordinary hours, but does not include the redundancy amount.
following:
Does redundancy pay apply to all employees?
 incentive-based payment and bonuses Some employees don't get redundancy pay when
 loadings their job is made redundant.
 monetary allowances The following employees don't get redundancy pay:
 overtime or penalty rates  employees whose period of continuous
 any other separately identifiable amounts. service with the employer is less than 12
months
 employees who are employed for a set
period of time, or a season
 employees who are dismissed because of
serious misconduct
 most casual employees
 trainees engaged only for the length of the
training agreement
 apprentices
 most employees of a small business.
Fair Work Infoline: 13 13 94 www.fairwork.gov.au
What is a small business? What happens if my employer goes
A small business employer, for the purpose of
determining redundancy pay, is an employer who bankrupt or into liquidation?
employs fewer than 15 employees at the time when Sometimes businesses shut down because they
notice is given. aren't profitable or run out of money. This can mean
that employees lose their jobs, and in some cases,
To determine whether the employer has fewer than the employer may not be able to pay them the
15 employees, the following factors need to be wages and entitlements they are owed.
considered:
When a business is bankrupt, also known as going
 all employees employed by the employer at into liquidation or insolvency, employees can get
that time are to be counted help through the Fair Entitlements Guarantee (FEG).
 a casual employee is not to be counted
The FEG is available to eligible employees to help
unless, at that time, they have been
them get their unpaid entitlements.
employed on a regular and systematic basis
 associated entities are taken to be one This can include:
entity  wages – up to 13 weeks unpaid wages
 the employee being dismissed and any other (capped at the FEG maximum weekly wage)
employees being dismissed at that time are  annual leave
counted.
 long service leave
A non-small business can become a small business as  payment in lieu of notice of termination –
part of the process of downsizing its workforce. This maximum of 5 weeks
can be due to insolvency in the period leading up to
 redundancy pay – up to 4 weeks per full year
(or after) becoming bankrupt, or going into
of service.
liquidation. Non-small business employers that
become a small business employer in these It doesn't include:
circumstances may still be required to pay their
 superannuation
employees redundancy pay.
 reimbursement payments
An award or enterprise agreement may have
 one-off or irregular payments
different redundancy provisions which could apply
instead of those listed above. These provisions, such  bonus payments
as industry-specific redundancy schemes, can  non-ongoing or irregular commission.
override the listed exceptions.
For more information visit the Department of
To check which award you're covered by use Employment and Workplace Relations FEG webpage
our Award Finder at fairwork.gov.au/findmyaward at dewr.gov.au/fair-entitlements-guarantee or call
the FEG Hotline on 1300 135 040.

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The Fair Work Ombudsman is commifted to providing you with advice that you can rely on. The Last updated: February 2024
informafion contained in this fact sheet is general in nature. If you are unsure about how it applies to © Copyright Fair Work Ombudsman
your situafion you can call our Infoline on 13 13 94 or speak with a union, industry associafion or a
workplace relafions professional.

Fair Work Infoline: 13 13 94 www.fairwork.gov.au