Understanding Termination and Notice Periods in Australia

Australian employment law provides clear frameworks for termination procedures, whether initiated by employers or employees. Both parties can end employment relationships during probation periods or upon contract completion, with or without stated reasons. However, specific circumstances dictate notice requirements and severance obligations that employers must understand to maintain compliance.

When Notice Periods Apply

Employers must provide notice before termination unless specific conditions exist. Notice exemptions apply when terminating fixed-term contracts at their natural conclusion, addressing serious misconduct, or ending seasonal employment. Serious misconduct includes theft, fraud, physical assault, refusal to follow reasonable instructions, and actions compromising workplace safety or business operations.

Notice Period Requirements Based on Tenure

The required notice period increases with employee tenure according to these standards:

1 year or less: 1 week notice
1-3 years: 2 weeks notice
3-5 years: 3 weeks notice
Over 5 years: 4 weeks notice
Employees over 45 with 2+ years service: Additional 1 week notice

Consider a case where a technology company needed to restructure its Melbourne office. Employees with seven years of service received four weeks' notice plus an additional week for those over 45, ensuring full compliance with Australian standards.

Severance Pay Calculations

Redundancy situations require severance payments based on continuous service. Employees with less than one year of service aren't eligible. The scale progresses as follows:

1-2 years: 4 weeks' pay
2-3 years: 6 weeks' pay
3-4 years: 7 weeks' pay
4-5 years: 8 weeks' pay
5-6 years: 10 weeks' pay
6-7 years: 11 weeks' pay
7-8 years: 13 weeks' pay
8-9 years: 14 weeks' pay
9-10 years: 16 weeks' pay
Over 10 years: 12 weeks' pay

Exceptions to Severance Requirements

Severance pay isn't required when:

Companies employ fewer than 15 people
Employees resign voluntarily
Employment lasted less than 12 months
Termination results from serious misconduct

A recent case involved a Sydney-based marketing firm with 12 employees that avoided severance payments during downsizing due to its small workforce size, though notice periods still applied.

Unemployment Benefits Eligibility

Australian citizens, permanent residents, and qualifying temporary residents may access unemployment benefits between ages 22 and retirement age. Applicants must demonstrate active job search efforts or provide medical evidence of incapacity. Payments range from AUD$510 to $793 fortnightly, depending on individual circumstances and asset tests.

Navigating Australian termination laws requires careful attention to tenure calculations, notice requirements, and exemption conditions. SailGlobal provides expert compliance consultation to help international employers manage these complex regulations effectively.

Australian Termination Laws: Notice Periods, Severance Pay & Compliance Guide