Termination
Australia
Grounds
Termination can be brought about by mutual agreement; upon expiry of a fixed-term contract; by the employer, with or without notice (subject to law); or upon termination (ie, resignation) by the employee.
Who is subject to termination laws
Employees who have completed 6 months of service with their employer (or 12 months in the case of a small business employer with fewer than 15 employees, taking into account any employees of associated entities including foreign entities) and earn less than the high income threshold (currently AUD158,500); or who are covered by a modern award or enterprise (collective) agreement, are generally eligible to make a claim for unfair dismissal.
Prohibited or restricted terminations
Employers are prohibited from taking "adverse action" – including termination – against an employee because the employee has or exercises a "workplace right” or engages in "industrial activity," or because of a protected attribute, such as race, sex, age or disability. Further protections include a prohibition on an employer dismissing an employee because the employee is temporarily absent from work due to illness or injury for fewer than 3 months in a 12-month period.
Third-party approval for termination/termination documents
Not applicable.
Mass layoff rules
Reporting requirements apply where a decision is made to make 15 or more employees’ positions redundant, including notifying the relevant government agency and relevant unions.
Notice
Between 1 week and 4 weeks depending on length of continuous employment, although an employment contract, enterprise agreement or applicable modern award may specify a longer notice period. Where an employee is over 45 years of age and has completed at least 2 years' continuous service, they will be entitled to an extra week's notice.
Statutory right to pay in lieu of notice or garden leave
An Employer can usually make a payment in lieu of notice (subject to any applicable enterprise agreement or modern award). No right to garden leave unless specified in the contract.
Severance
The entitlement to severance as a result of a termination by reason of redundancy is based on a sliding scale and calculated by reference to the length of the employee's period of continuous service on termination.
Period of continuous service | Pay |
Less than 12 months of service | 0 |
12 months to less than 2 years of service | 4 weeks' pay |
2 years of service to less than 3 years of service | 6 weeks' pay |
3 years of service to less than 4 years of service | 7 weeks' pay |
4 years of service to less than 5 years of service | 8 weeks' pay |
5 years of service to less than 6 years of service | 10 weeks' pay |
6 years of service to less than 7 years of service | 11 weeks' pay |
7 years of service to less than 8 years of service | 13 weeks' pay |
8 years of service to less than 9 years of service | 14 weeks' pay |
9 years of service to less than 10 years of service | 16 weeks' pay |
10 years and over | 12 weeks' pay |
Note: The scale drops from 16 weeks to 12 weeks. This is a historical anomaly that persists and is usually justified by the employee's entitlement to long service leave after reaching 10 years' service.
A week's pay is generally calculated on the basis of the employee's base rate of pay.
Service prior to January 1, 2010 is only counted if the employee had an entitlement to redundancy pay under another instrument prior to that date.
There are some exceptions to this entitlement. An employment contract, enterprise agreement or modern award may also specify a greater entitlement.