Ending employment & the JobKeeper scheme

Published 16 July 2020 | Updated 2 November 2020

The information on this page is for qualifying employers and their employees.

Qualifying employers are employers that qualify for the JobKeeper scheme and receive payments for their eligible employees.

Legacy employers no longer receive JobKeeper payments but may be able to use some of the JobKeeper provisions. Learn what applies for ending employment at Pay, leave and ending employment for legacy employers.

Find out about what needs to happen when employment ends for qualifying employers and their employees under the JobKeeper scheme.

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

When an employer ends employment

The information in this section is for qualifying employers and their eligible employees.

Legacy employers and their employees can check what applies at Pay, leave and ending employment for legacy employers.

If a qualifying employer is ending an employee’s employment, the employee may be entitled to:

  • notice
  • payment of accrued entitlements including pay, annual and long service leave
  • redundancy pay
  • other entitlements.

When dismissing an employee, a qualifying employer should check the applicable award, enterprise agreement, employment contract and workplace policies that apply. They should also check the National Employment Standards (NES). These set out the rules and obligations when dismissing an employee. They also apply when dismissing an employee participating in the JobKeeper scheme.

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

  • discrimination
  • a reason, or 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:

  • Find my award
  • Fair Work Commission website - Find an agreement external-icon.png
  • Dismissal - How much notice?
  • Unfair dismissal
  • Dismissal while under a JobKeeper enabling stand down direction

    If a qualifying employer needs to dismiss an employee while a JobKeeper direction is in place, the usual rules about ending employment apply. This includes:

    Notice when an employer ends the employment

    Working less hours under a JobKeeper direction

    If an employee is given notice of termination while a JobKeeper direction to work reduced hours is in place, they continue to work the reduced hours for the notice period. This applies so long as their qualifying employer wants them to stay employed during their notice period.

    Example: Notice when an employer ends the employment - working less hours under a JobKeeper direction

    Damien works part-time at a gym. His employer qualifies for the JobKeeper scheme and gets payments for him.

    The gym’s opening hours are reduced because of an enforceable government direction. Damien’s employer issues a JobKeeper enabling stand down direction to reduce Damien’s hours from 20 to 10 hours a week.

    A month later, Damien’s employment is terminated and he’s given 2 weeks’ notice. During the 2-week notice period Damien continues to work 10 hours a week under the JobKeeper direction.

    Working no hours under a JobKeeper direction

    If an employee is given notice of termination while not working because of a JobKeeper direction, they stay stood down for the notice period. This applies unless the direction finishes, or is revoked before the end of the notice period. The employee’s 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:

    • the applicable JobKeeper payment, or
    • their usual pay for any work they 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 for qualifying employers and their employees.

    For information about the different applicable JobKeeper payments, visit the ATO website - Payment rates external-icon.png page.

    Example: Notice when an employer ends the employment – working no hours under a JobKeeper direction

    Maja works full-time as a bar attendant at Jane’s night club. Jane’s business qualifies for the JobKeeper scheme and gets payments for Maja.

    The night club closes because of an enforceable government direction. Because Jane has no alternative duties for Maja, she gives her a JobKeeper enabling stand down direction to work no hours for 12 weeks.

    6 weeks later, Jane terminates Maja’s employment. Jane gives Maja 4 weeks’ notice.

    Maja continues to receive the applicable JobKeeper payment for 4 weeks until the end of her notice period. This is because Jane had given Maja a stand down direction to work no hours for 12 weeks and this coincided with the notice period.

    Payment in lieu of notice

    Employees of a qualifying employer can be paid out notice instead of being asked to work during a notice period. This is called payment in lieu of notice.

    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 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:

    Example: Notice when an employer ends the employment – working no hours under a JobKeeper direction - payment in lieu of notice

    Amanda works full-time at a retail florist. Amanda’s employer qualifies for the JobKeeper scheme and gets payments for her.

    The florist closes because of an enforceable government direction and Amanda’s employer gives her a JobKeeper enabling stand down direction to work no hours for 3 months.

    2 months later, Amanda’s employer decides that the business won’t be able to continue operating and that Amanda’s position will be made redundant effective immediately. Amanda’s employer consults with her and tells her she’ll receive 1 week’s payment in lieu of notice, as required by her award.

    Before the JobKeeper direction, Amanda worked 38 hours and was paid $950 per week. Amanda’s payment in lieu of notice is calculated as if the JobKeeper direction hadn’t been given, so she is paid $950 in lieu of notice. JobKeeper payments aren’t included when calculating the payment in lieu of notice.

    Because Amanda’s employment was terminated during a JobKeeper fortnight, she also gets paid the applicable JobKeeper payment for that fortnight. This is because an employee who is on JobKeeper and receives payment in lieu of notice is still entitled to receive JobKeeper payments for the fortnight when they were still employed.

    For more information on stand downs and when employment ends, see our Library article Ending employment during a stand down.

    Redundancy

    Redundancy happens when:

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

    The JobKeeper scheme hasn’t changed the rules for calculating an employee’s redundancy entitlements. When an employee’s role is made redundant, they may:

    • get notice (or payment in lieu of notice)
    • be entitled to redundancy pay (also known as severance pay)
    • need to be consulted about the redundancy before it happens.

    See Redundancy pay & entitlements for more information on the usual rules. To calculate redundancy pay and entitlements, use our Notice & Redundancy Calculator.

    If a business is considering redundancy of 15 or more staff, employers need to give written notification to Services Australia of the proposed dismissals. More information, and a notification template, can be found on the Services Australia website external-icon.png.

    Redundancy pay

    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 gets redundancy pay based on their ordinary and rostered hours before the stand down direction was given.

    Final pay and JobKeeper payments

    The Australian Taxation Office (ATO) oversees the types of payments that can and can’t be covered by the JobKeeper payment. This includes the types of payments a qualifying employer needs to pay an employee in order to remain eligible for the JobKeeper payment.

    To learn about the ATO’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:

    Legacy employers

    Legacy employers and their employees can check what applies for ending employment at Pay, leave and ending employment for Legacy employers.

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    When an employee resigns

    The information in this section is for qualifying employers and their eligible employees.

    Legacy employers and their employees can check what applies at Pay, leave and ending employment for legacy employers.

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

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

    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. It can also end earlier if the employer and employee both agree.

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

    • their applicable JobKeeper payment, or
    • their usual pay for any work they perform during the notice period (including any leave payments or public holiday pay they are entitled to).

    For information about the different applicable JobKeeper payments, visit the ATO website - Payment rates external-icon.png page.

    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 enabling stand down direction is withdrawn by the employer or the JobKeeper scheme ends during their notice period.

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

    More information:

    Example: Notice period when an employee resigns

    Vishal works full-time for Caring Cricketers Café Pty Ltd. He is stood down due to an enforceable government direction. Because Vishal’s employer qualifies for Tier 1 JobKeeper payments, they pay him $1200 (before tax) per fortnight. The Australian Taxation Office pays Vishal’s employer the JobKeeper payments, in arrears each month.

    Vishal accepts a job offer with another employer. He gives Caring Cricketers 4 weeks’ notice of his resignation, as required under his award.

    Vishal continues to receive $1200 (before tax) per fortnight until the end of his notice period.

    Find out about the different tiers of JobKeeper payments and what applies to different employees at the ATO’s Payment rates external-icon.png page.

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    Calculating employee entitlements

    The information in this section is for qualifying employers and their eligible employees.

    Legacy employers and their employees can check what applies at Pay, leave and ending employment for legacy employers.

    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, entitlements when employment ends are calculated based on their usual ordinary hours before the direction was given. This includes notice and accrual of leave. Annual leave continues to accrue as though the direction had not been given, including if the employee has been directed to work no hours under a JobKeeper direction.

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

    Final pay and JobKeeper payments

    The ATO oversees the types of payments that can and can’t be included in the JobKeeper payment. 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 ATO’s list of included and excluded payments related to JobKeeper, go to ATO JobKeeper Employers section - Your eligible employees page external-icon.png.

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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. This includes information on the JobSeeker payment.

    When a business is bankrupt, also known as going into liquidation or insolvency, employees may be able to get financial assistance through the Fair Entitlements Guarantee. This can include payment for outstanding wages, leave, notice and redundancy pay.

    Find out who is an eligible employee and how to make a claim on the Attorney-General's Department Fair Entitlements Guarantee (FEG) page 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 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 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 during coronavirus, go to Other government information & assistance.

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    More information

    Ending employment

    Go to our Library for detailed information about:

    To check notice periods for common industries, go to:

    Legacy employers

    Legacy employers and their employees can check what applies for ending employment at Pay, leave and ending employment for Legacy employers.

    More information:

    JobKeeper

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