Termination and Redundancy: The Legal Essentials Every Employer Must Know
Termination and redundancy are the highest-risk HR processes. Get the procedure wrong and you face unfair dismissal claims, back pay, and reputational damage.
The legal framework
The Fair Work Act sets out: - Minimum notice periods (or pay in lieu). - Redundancy pay by years of service. - Unfair dismissal jurisdiction (most employees with 6+ months service, or 12+ months for small businesses). - General protections (no adverse action for exercising a workplace right).
Genuine redundancy — the three-part test
- The employer no longer requires the role to be performed by anyone.
- The employer has complied with consultation obligations in the award/agreement.
- It would not have been reasonable in the circumstances to redeploy the employee.
Fail any of the three and the redundancy can become unfair dismissal.
Notice periods
| Continuous service | Notice |
|---|---|
| ≤ 1 year | 1 week |
| 1 – 3 years | 2 weeks |
| 3 – 5 years | 3 weeks |
| > 5 years | 4 weeks |
Add one week if the employee is over 45 with 2+ years service.
Redundancy pay (NES)
| Years of service | Weeks |
|---|---|
| 1 – 2 | 4 |
| 2 – 3 | 6 |
| 3 – 4 | 7 |
| 4 – 5 | 8 |
| 5 – 6 | 10 |
| 6 – 7 | 11 |
| 7 – 8 | 13 |
| 8 – 9 | 14 |
| 9 – 10 | 16 |
| 10+ | 12 |
Small business employers (fewer than 15 employees) are exempt from NES redundancy pay.
Procedural fairness in performance terminations
- Specific concerns put in writing.
- Opportunity to respond, with a support person.
- Reasonable time to improve where appropriate.
- Final meeting documented with witnesses.
HRPPL's offboarding workflow guides managers through the right steps, calculates entitlements, and produces compliant termination letters and ATO finalisation in one pass.