Ending employment and redundancy
Published 27 March 2020 | Updated 8 April 2021
Find out about employment ending during coronavirus, including what employers need to do and what employees are entitled to.
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Before ending employment
There are a number of things employers need to be aware of before ending an employee’s employment.
Under the Fair Work Act, an employee is protected from being dismissed because of a temporary absence due to illness or injury. The Fair Work Act also includes protections against being dismissed because of:
- a reason that is harsh, unjust or unreasonable, or in a way that is harsh, unjust or unreasonable
- another protected right.
These protections continue to apply to employees whose employment is impacted by coronavirus. For example, employees have protections at work if they need to quarantine or self-isolate under a workplace health and safety law.
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Notice and final pay
If an employee loses their job because of the impacts of coronavirus, their entitlements will depend on how and why their employment ends. For example, if employment ends because the business closes down permanently, or because the role is no longer required, the employee may be entitled to redundancy pay.
Dismissal – when the employer ends the employee’s employment
If an employer is ending the employment, their employee may be entitled to notice, redundancy pay (if the dismissal is a genuine redundancy) and other entitlements.
When dismissing an employee, employers need to check the National Employment Standards and any applicable award, agreement, employment contract or workplace policies for information about what their employees are entitled to.
For more information, see Ending employment.
Not sure which award covers you? Use our Find my award tool. For employees covered by an agreement, search for agreements on the Fair Work Commission website – Find an agreement .
Dismissal during leave or a stand down
If an employee is on leave or has been stood down, the usual rules about dismissal still apply (for example, rules about unfair dismissal and redundancy).
If an employer dismisses an employee during a period of approved leave or during a stand down, they need to give the employee any required notice in writing.
The employer can:
- let the employee stay employed through their notice period
- pay the notice period out to them (also known as pay in lieu of notice), or
- give a combination of the two.
If the employer lets the employee stay employed through their notice period, the notice period can run at the same time as a period of stand down.
Employment ends either at the end of the notice period or on the date that payment in lieu of notice is made, whichever is earlier. It can’t end on a date earlier than the day the notice is given.
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When an employee resigns from their job
If an employee is ending the employment, they may need to give their employer notice of termination. They may also be owed entitlements (for example, accrued annual leave). Employees need to check their obligations under any applicable award, agreement, employment contract, or workplace policies.
An employee’s notice period can run at the same time as:
- approved leave (such as annual leave or public holidays), or
- a stand down (such as a general stand down under the Fair Work Act).
Employment ends either at the end of the notice period or on the date that payment in lieu of notice is made, whichever is earlier.
Read more about the rules for Notice of termination and leave in our Library.
Example: Employee made redundant after a business closure
Ragnar has worked full-time as a level 3 employee at a manufacturing facility for 4 years under the Food, Beverage and Tobacco Manufacturing Award. Ragnar's employer tells him that the business is closing and his and the other employees’ jobs are now redundant. His employer explains the steps they’ve taken to try to avoid closing and says they’ll be paid out their notice instead of having to work.
Ragnar's employer calculates the amount of notice and redundancy pay they need to provide to their 18 employees using the Notice and Redundancy Calculator. As Ragnar is over 45 years old and a level 3 employee under the Food, Beverage and Tobacco Manufacturing Award, he is entitled to 4 weeks’ notice of termination and 8 weeks’ redundancy pay. Because Ragnar's employment ended without notice, the 4 weeks’ notice is paid out instead.
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Some employers may need to make employees’ positions redundant in response to a business downturn or closure. Redundancy happens when either:
- an employer doesn't need an employee’s job to be done by anyone, or
- the business becomes insolvent or bankrupt.
If an employee’s job is made redundant, their employer may have to give them redundancy pay and any other entitlements owed to them.
Go to Redundancy pay and entitlements for information about entitlements and obligations in this situation.
Employers need to make sure a redundancy is genuine. Go to Redundancy for information on what is a genuine redundancy.
Redundancy and stand down
If an employer makes an employee’s job redundant while the employee is stood down, the employer can:
- let the stand down continue, and at the end of the notice period, pay the employee the required redundancy pay
- let the employee return to work through their notice period, pay them for any time worked, and at the end of the notice period, pay the required redundancy pay
- pay the notice period out to them (known as payment in lieu of notice) and pay the appropriate redundancy pay, or
- give a combination of the above.
If an employee is given notice of termination, they stay employed through their notice period. The employee’s notice period runs at the same time as:
- the stand down
- any authorised absence by the employee
- any work that is done (if the employee works some hours).
Their employment ends at the end of the notice period (or earlier by agreement or if payment in lieu of notice is paid) and they accrue leave for the notice period. They are also paid their appropriate redundancy pay.
Payment in lieu of notice
If payment instead of notice and the appropriate redundancy pay is paid to the employee, their employment ends at the time that payment is made.
Any payment in lieu of notice is calculated based on the employee’s full pay rate and usual hours and days of work (as if the stand down didn’t apply). For example, an employee who is entitled to 3 weeks’ notice will get 3 weeks’ pay at their full rate for their usual hours.
Redundancy entitlements for an employee working reduced hours under an award variation
The Fair Work Commission has recently varied some awards as a result of coronavirus. Some of these changes affect employee entitlements.
Employees working reduced hours under these awards continue to accumulate entitlements based on their original hours before the change. Redundancy and final pay entitlements need to also be based on their original hours.
For more information and to find out which awards are affected, see Changes to workplace laws during coronavirus.
Changing from full-time or part-time to casual
If an employer wants to change an employee’s position from full-time to part-time or casual, they will usually have to come to an agreement with the employee. For more information see Changing from full-time to part-time or casual employment.
Redundancy of 15 or more employees
If an employer is considering making 15 or more employees redundant, the employer has to give written notice to Services Australia. More information and a template can be found on the Services Australia website .
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Support for employees after ending employment
There are different forms of support available for employees who lose their job because of the impacts of coronavirus.
For help and services for individuals financially affected by coronavirus, including Centrelink payments and support, go the Services Australia website .
For information and services to assist job seekers, go to:
- I want a job on the Department of Education, Skills and Employment’s website – information on employment programs and services that can help
- Help for workers who have recently lost their job on the Department of Education, Skills and Employment’s website – resources for workers who have been made redundant, including information about rights, entitlements and support services.
- What employers want on JobActive – information about the kinds of things employers are looking for when hiring employees.
- JobSeeker Payment on the Services Australia website – for information on receiving financial help if you are looking for work.
For other government services and agencies providing information, advice and services relating to coronavirus, go to Other government information and assistance.
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- Visit our Library for detailed information about:
Award and agreements
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