Ending employment & the JobKeeper scheme

Published 16 July 2020 | Updated 16 September 2020

Extension of JobKeeper provisions in the Fair Work Act

On 1 September 2020, the JobKeeper provisions in the Fair Work Act were extended with some changes.

We’ve added new information about:

We've also created a 10% decline in turnover template certificate for legacy employers, with other template documents being published soon. We encourage you to check back regularly for updates.

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Find out about what needs to happen when employment ends under the JobKeeper scheme.

Not in the JobKeeper scheme? Find out about Ending employment & redundancy during coronavirus.

When an employer ends employment

If an employer is ending an employee’s employment, their employee may be entitled to notice, redundancy pay (if the dismissal is a genuine redundancy) and other entitlements. When dismissing an employee, an employer should check the National Employment Standards, and any applicable award, agreement, employment contract or workplace policies.

They will outline the rules and obligations when dismissing an employee. These rules and obligations apply when dismissing an employee participating in the JobKeeper scheme.

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 external-icon.png.

The Fair Work Act also includes protections against being dismissed because of:

  • discrimination
  • a reason that is harsh, unjust or unreasonable
  • in a way that is harsh, unjust or unreasonable
  • another protected right.

These protections at work continue to apply to employees impacted by coronavirus and for those participating in the JobKeeper scheme.

More information:

Dismissal while under a JobKeeper enabling stand down direction

Under the JobKeeper scheme, an employer can give a JobKeeper enabling stand down direction for an employee to work reduced (or no) hours.

If an employer needs to dismiss an employee while a JobKeeper enabling stand down direction is in place, the usual rules about ending employment apply. This includes notice of termination, redundancy and unfair dismissal.

Notice period when an employer ends the employment

If an employee is given notice of termination while a JobKeeper enabling stand down direction to work reduced hours is in place, and their employer wants them to stay employed during their notice period, they continue to work the reduced hours for the notice period.

If an employee is given notice of termination while under a JobKeeper enabling stand down direction to work no hours, they remain stood down for the notice period unless the JobKeeper enabling stand down direction finishes or is revoked before the end of the notice period.

Their employment ends at the end of the notice period.    

For the time they are still employed and the JobKeeper enabling stand down direction still applies, the employee needs to be paid the greater of:

  • their JobKeeper payment equivalent to $1500 (before tax) per fortnight, or
  • their usual pay for any work they do perform during that fortnight (including any leave payments or public holiday pay they are entitled to).

Go to Pay and the JobKeeper scheme for more information on JobKeeper payments.

Payment in lieu of notice

Employees can be given payment in lieu of notice instead of being asked to work during a notice period.

If this happens, the employee’s final pay is calculated on their full pay rate and usual hours and days of work, as if the JobKeeper enabling stand down direction hadn’t been given. For example, an employee who is entitled to 3 weeks’ notice will get 3 weeks’ pay at their full rate of pay for their usual hours.

Go to our Library for detailed information about:

More information:

Redundancy

Redundancy is when:

  • an employer doesn’t need the employee’s job to be done by anyone, or
  • the business becomes insolvent or bankrupt.

When an employee’s role is made redundant, they need to get notice (or payment in lieu of notice) and they may be be entitled to redundancy pay (also known as severance pay). The employee may also need to be consulted about the redundancy before it happens. These rules still apply under the JobKeeper scheme. See Redundancy pay & entitlements for more information.

Redundancy pay is paid based on an employee’s original and usual rostered hours, not the hours under any JobKeeper direction. For example, an employee working fewer or no hours under a JobKeeper enabling stand down direction is entitled to redundancy pay based on their ordinary and rostered hours before the stand down direction was given.

The JobKeeper scheme hasn’t changed the rules for calculating an employee’s redundancy entitlements. To see what rules apply, employers and employees should check the National Employment Standards and any applicable award, agreement, employment contract or workplace policies.

To calculate redundancy pay and entitlements, use our Notice & Redundancy Calculator.

Final pay and JobKeeper payments

The Australian Taxation Office oversees the types of payments that can and can’t be included in the $1500 JobKeeper payment. This includes the types of payment an employer needs to pay an employee in order to remain eligible for JobKeeper.

To learn about the Australian Taxation Office’s list of included and excluded payments for the JobKeeper payment, go to the ATO JobKeeper Employers section – Paying your eligible employees page external-icon.png.

More information:

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When an employee resigns

An employee can resign when receiving JobKeeper payments from their employer, including if there is a JobKeeper enabling direction to work fewer hours, change duties, or change work location in place.

When an employee resigns, they need to give their employer any required notice. Employees should check the rules about giving notice in their award, agreement, employment contract or workplace policies.

Not sure of your award? Use our Find my award tool. For employees covered by an agreement, search for agreements on the Fair Work Commission website – Find an agreement external-icon.png.

Notice period when an employee resigns

An employee’s notice period can run at the same time as a JobKeeper enabling stand down direction and any rostered work. Employment ends at the end of the notice period, or earlier if the employer and employee agree.

During the notice period, an employee gets paid the same as if they hadn’t given notice. For an employee receiving JobKeeper payments, this is the greater of:

  • their JobKeeper payment (equivalent to $1500 before tax per fortnight), or
  • their usual pay for any work they do perform during the notice period (including any leave payments or public holiday pay they are entitled to).

If a JobKeeper enabling stand down direction ends or is revoked before the end of the notice period, the employee’s pay will go back to normal. This could happen if the JobKeeper scheme ends, or if the JobKeeper enabling stand down direction is withdrawn by the employer.

Learn more about resignation under a JobKeeper enabling stand down direction in Ending employment during a stand down in our Library.

More information:

Final pay and JobKeeper payments

The Australian Taxation Office oversees the types of payments that can and can’t be included in the $1500 per fortnight. This includes the types of payments an employer needs to pay in order to remain eligible for the JobKeeper payment and some amounts payable to an employee at the end of their employment (such as leave or redundancy).

To find out more about the Australian Taxation Office’s list of included and excluded payments related to JobKeeper, go to ATO JobKeeper Employers section – Paying your eligible employees page external-icon.png.

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Calculating employee entitlements

Employees working under a JobKeeper enabling direction continue to accumulate entitlements (such as annual leave) as if the direction had not been given.

For an employee working reduced hours under a JobKeeper enabling stand down direction, their entitlements for when employment ends are calculated based on their usual ordinary hours before the direction was given.

To calculate employee entitlements, use our Pay and Conditions Tool:

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Support for employees after employment ends

There are different types 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 external-icon.png.

For information and services to assist job seekers, go to:

  • I want a job external-icon.png 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 external-icon.png 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 external-icon.png on JobActive – information about the kinds of things employers are looking for when hiring employees.

For other government services and agencies providing information, advice and services relating to coronavirus, go to Other government information & assistance.

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More information

Ending employment

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