---
title: "Australia Termination & Severance 2026"
description: "Australia termination 2026: NES notice bands from 1 week to 5 weeks, redundancy scale peaks at 16 weeks then drops, unfair dismissal after 6 months service."
canonical: https://www.teamed.global/country-hiring-guides/australia/termination-and-severance
---

Australia · Termination child

Served by Teamed vetted partner-entity network in Australia

# How do you *terminate an employee in Australia* in 2026?

Australia's NES redundancy scale does something no other country's formula does: entitlement peaks at 16 weeks for nine to ten years of service, then falls to 12 weeks for ten or more years. Get the tenure band wrong and you either overpay or breach the [Fair Work Act 2009](https://www.fairwork.gov.au/ending-employment/redundancy/redundancy-pay).

Last reviewed 12 June 2026 · Australia guide

![Sydney Harbour at dusk, warm light on the water, the Opera House silhouette visible in the background.](/images/country-guides/australia-termination-severance.webp)

Illustration · Sydney, Australia

Answer.cite this

Australia's termination rules come from the National Employment Standards (NES) under the [Fair Work Act 2009](https://www.fairwork.gov.au/tools-and-resources/fact-sheets/minimum-workplace-entitlements/notice-of-termination-and-redundancy-pay). The law sets minimum notice by length of service. Under one year: 1 week. One to three years: 2 weeks. Three to five years: 3 weeks. More than five years: 4 weeks. Employees aged 45 or older with at least two years of service get one extra week. That brings the maximum to 5 weeks.

Redundancy pay starts after 1 year of continuous service. It follows a stepped scale, not a simple weeks-per-year rate. Entitlement starts at 4 weeks for one to two years. It peaks at 16 weeks for nine to ten years. Then it falls to 12 weeks for ten or more years. The drop at ten years reflects that employees often qualify for long service leave at that point. Small businesses with fewer than fifteen employees are exempt from NES redundancy pay.

Unfair dismissal protection starts after 6 months of continuous service at employers with fifteen or more employees. At small businesses, it starts after 12 months. All final pay must be settled within 7 days of the termination date.

![A desk in a light-filled office with a resignation letter resting on a keyboard.](/images/country-guides/australia-termination-polaroid-1.webp)

Notice given

## How much notice must you give an Australian employee?

The law sets minimum notice by length of service ([Fair Work Act 2009 s.117](https://www.fairwork.gov.au/tools-and-resources/fact-sheets/minimum-workplace-entitlements/notice-of-termination-and-redundancy-pay)). Under one year: 1 week. One to three years: 2 weeks. Three to five years: 3 weeks. More than five years: 4 weeks.

Employees aged 45 or older with at least two years of service get one extra week. That makes the maximum 5 weeks. Casual employees are not entitled to notice.

| Length of continuous service | Statutory minimum notice |
| --- | --- |
| Less than 1 year | 1 week |
| 1 year to less than 3 years | 2 weeks |
| 3 years to less than 5 years | 3 weeks |
| More than 5 years | 4 weeks |
| 45+ years old, 2+ years service (supplement) | +1 week |
| Statutory maximum (5 years service + age supplement) | 5 weeks |

These are statutory minimums. Modern awards and enterprise agreements frequently require longer notice; employment contracts may extend further. If the contract sets a longer period than the NES, the contract prevails for the employer's benefit but the employee can always rely on the statutory floor.

### Payment in lieu of notice

Employers can pay out the notice period rather than require the employee to work it. Payment in lieu of notice is taxable as ordinary income. During probation, notice is 7 days, consistent with the NES under-one-year band.

### Summary dismissal

No notice is required for serious misconduct. Serious misconduct under the Fair Work Regulations 2009 includes theft, fraud, assault, and conduct that causes serious and imminent risk to health and safety. The employer must still follow a fair process to establish that the conduct occurred before exercising summary dismissal rights.

## What makes a dismissal fair under Australian law?

Unfair dismissal protection starts after 6 months of continuous service at employers with fifteen or more employees. At small businesses it starts after 12 months ([Fair Work Act 2009](https://www.fairwork.gov.au/ending-employment/unfair-dismissal)).

A dismissal needs a valid reason. Valid reasons are conduct, capacity, or genuine redundancy. You must also follow a fair process. A valid reason on its own is not enough. Getting the process wrong can still result in an unfair dismissal finding.

The Fair Work Commission assesses unfair dismissal claims against criteria in s.387 of the Act, including whether there was a valid reason, whether the employee was notified and given a chance to respond, whether there was a support person present, any warnings given, and the business's size and access to HR expertise.

### The valid reasons for dismissal

1. **Conduct**, serious misconduct or a sustained pattern of conduct after warning
2. **Capacity**, including both performance below the required standard and ill health that prevents the employee from fulfilling the role
3. **Genuine redundancy**, meaning the role is no longer required and redeployment is not reasonably practicable

A "genuine redundancy" under s.389 of the Act requires three elements: the employer no longer requires anyone to do the job, the employer consulted any applicable modern award or enterprise agreement obligations, and redeployment within the employer's enterprise or an associated entity was not reasonably practicable.

### General protections

Separate from unfair dismissal, the Act's general protections (Part 3-1) prohibit adverse action against an employee for exercising a workplace right, because of their union membership, or on grounds including pregnancy, parental status, disability, and race. General protections apply from day one and carry uncapped compensation. They are not subject to the qualifying service period.

### High income threshold and exclusion

Employees earning above the high income threshold who are not covered by a modern award or enterprise agreement cannot access the unfair dismissal regime. They may still bring general protections claims and breach of contract claims. The threshold updates annually on 1 July; the applicable figure is set by the Fair Work Commission and can be verified at [fwc.gov.au/high-income-threshold](https://www.fwc.gov.au/high-income-threshold). Compensation for unfair dismissal is capped at the lesser of 26 weeks of remuneration or A$ 91,550 (the current cap based on the 2025-26 high income threshold).

1. Identify a valid reason Anchor the dismissal to conduct, capacity, or genuine redundancy. A termination without a valid reason is presumed unfair once the qualifying period of service is met.
2. Notify and invite a response Tell the employee in writing what the issue is and give them a genuine opportunity to respond before any decision is made. This step is required even where the reason is capability or redundancy.
3. Allow a support person Offer the employee the right to have a support person present at any meeting related to the dismissal. Refusing this request without reasonable grounds is a factor the Fair Work Commission weighs in an unfair dismissal claim.
4. Give written notice or pay in lieu Issue written notice of termination at the correct NES band length. If paying in lieu, the payment must be made on or before the termination date.
5. Settle final pay within seven days Pay all final entitlements, including outstanding wages, accrued annual leave, and any redundancy pay, within 7 days of the termination date under Fair Work Regulations 2009 reg. 3.36.

## How is redundancy pay calculated in Australia?

Redundancy pay starts after 1 year of continuous service. It follows a stepped scale by tenure band, not a simple weeks-per-year rate ([Fair Work Act 2009 s.119](https://www.fairwork.gov.au/ending-employment/redundancy/redundancy-pay)).

The scale peaks at 16 weeks for nine to ten years. Then it falls to 12 weeks for ten or more years. The drop happens because employees at that tenure typically become eligible for long service leave.

Fair Work Ombudsman · Redundancy pay

Australia's redundancy scale is stepped, not linear. Entitlement rises, peaks at 16 weeks between nine and ten years of service, then falls to 12 weeks at the ten-year mark and beyond. Use the full table below before calculating any redundancy payment.

Source: [Fair Work Ombudsman, Redundancy pay](https://www.fairwork.gov.au/ending-employment/redundancy/redundancy-pay)

| Continuous service | Redundancy pay entitlement |
| --- | --- |
| 1 year to less than 2 years | 4 weeks pay |
| 2 years to less than 3 years | 6 weeks pay |
| 3 years to less than 4 years | 7 weeks pay |
| 4 years to less than 5 years | 8 weeks pay |
| 5 years to less than 6 years | 10 weeks pay |
| 6 years to less than 7 years | 11 weeks pay |
| 7 years to less than 8 years | 13 weeks pay |
| 8 years to less than 9 years | 14 weeks pay |
| 9 years to less than 10 years | 16 weeks pay (peak) |
| 10 years or more | 12 weeks pay (drops at 10 years) |

Redundancy pay is calculated at the employee's base rate of pay, excluding overtime, penalties, allowances, and bonuses. There is no legislated weekly pay cap in Australia; the full base rate applies.

### Small business exemption

Employers with fewer than fifteen employees are exempt from NES redundancy pay obligations under s.121. They are still required to give proper notice. Genuine redundancy and unfair dismissal rules still apply to small businesses (with a longer qualifying period of 12 months).

### Final pay timing

All final entitlements, including redundancy pay, unused annual leave, and any outstanding wages, must be paid within 7 days of the termination date under Fair Work Regulations 2009 reg. 3.36. Payment in lieu of notice must be made on or before the termination date.

## What are the rules when making multiple employees redundant?

Australia has no fixed collective consultation period like the UK or EU. When you plan to make 15 or more employees redundant, you must notify [Services Australia](https://www.fairwork.gov.au/ending-employment/redundancy) in writing as soon as practicable.

Any consultation requirements beyond that come from your modern award or enterprise agreement, not the Act itself. Check your award or agreement before you proceed.

The s.530 notification obligation applies when the employer proposes to terminate the employment of 15 or more employees for reasons of an economic, technological, structural, or similar nature. The notification goes to Services Australia and must happen before the redundancies occur.

There is no prescribed consultation period in Australian statute for multiple redundancies. This differs materially from the United Kingdom, where failing collective consultation triggers a protective award. In Australia, the exposure for skipping consultation comes from:

- **Award obligations**, many modern awards include consultation clauses that require genuine consultation about the decision and its effects before notice is given
- **Enterprise agreement obligations**, enterprise agreements commonly include more detailed consultation requirements than the award minimum
- **Unfair dismissal risk**, a selection process that is not transparent or that doesn't genuinely consider alternatives can produce unfair dismissal findings for individual employees
- **General protections risk**, if any employee in the affected group has recently exercised a workplace right, raised a complaint, or is in a protected category, adverse action claims are possible regardless of headcount

Best practice for any multi-employee redundancy: check your modern award for consultation clauses, allow employees to respond to the proposed changes before notice is issued, consider alternatives to redundancy, and document the decision and the consultation process. The absence of a fixed statutory consultation period means procedural standards are set case by case by the Fair Work Commission.

## Deed of release and mutual termination in Australia

A deed of release is the standard way to end an Australian employment relationship with finality. It works like a UK settlement agreement. The employee receives compensation and gives up the right to bring claims. The employer gets certainty.

Australia does not require the employee to get independent legal advice before signing. But getting that advice is strong practice. It makes it much harder for the employee to later claim they signed under pressure or without understanding.

A deed of release under Australian law should clearly identify the claims being released, be executed as a deed (signed, witnessed, and delivered), and set out the consideration. Standard elements include:

- **Ex gratia payment**, above the statutory entitlements, negotiated between the parties
- **Notice pay**, either worked or paid out, taxable as income
- **Accrued annual leave**, always payable regardless of how employment ends, fully taxable
- **Long service leave**, pro-rata entitlement applies after seven years of service in most states; check the applicable state legislation
- **Contribution to legal fees**, common market practice, though not legally required
- **Reference clause**, agreed wording for any employment reference
- **Mutual non-disparagement**
- **Confidentiality**, covering the terms of the deed itself

General protections claims present a specific risk in deed negotiations. A release of general protections rights is valid, but if the employee later argues the termination itself was adverse action for exercising a workplace right, the Commission may look behind the deed. Obtain specific advice when the termination follows a complaint, union activity, or any exercise of a workplace right.

When a termination is by mutual agreement rather than employer-initiated, the employee typically does not qualify for NES redundancy pay (no "dismissal" occurred). The deed should be explicit about whether redundancy entitlements form part of the payment or whether the payment is entirely ex gratia.

## How Teamed runs Australia terminations

Teamed becomes your legal [employer of record](/lp/employer-of-record) in Australia for [**from $599 per employee per month**](/pricing), with **zero FX mark-up** in any currency. The employment relationship runs through Teamed's vetted in-country partner entity. That means the termination process runs through Teamed's Australia operations.

We handle the NES notice calculation, redundancy entitlement across the tenure band table, consultation documentation, and final-pay reconciliation on **one platform**. Decisions on which staff to dismiss, why, and on what terms stay with you.

**Real HR and legal experts** handle your Australia hires, from the first offer letter through every payroll cycle. **An actual person**, not a chatbot or a pooled queue. There is **no setup fee** and **no exit fee**, and employer cost **passes through at cost, itemised** on every invoice.

The split of responsibilities under EOR for Australia terminations:

| What Teamed handles | What the client decides |
| --- | --- |
| Notice period calculation against the NES band table | Whether to dismiss, why, and on what timeline |
| Redundancy pay calculation across the NES stepped scale | Whether to offer enhanced redundancy terms above the NES |
| Fair procedure documentation (warnings, response opportunities, meetings) | Performance standards and what constitutes a valid reason |
| s.530 Services Australia notification for qualifying multi-redundancies | Which roles are selected and on what criteria |
| Deed of release preparation with qualified employment-law partners | The commercial terms of any deed: ex gratia amount, reference wording |
| Final payroll within 7 days: wages, notice, annual leave, redundancy pay | Whether to contribute to the employee's legal fees beyond standard |
| Coordination of tribunal-stage support if an unfair dismissal claim is filed | Settlement vs defence strategy |

The NES redundancy scale's non-linear shape catches employers who assume entitlement keeps rising with tenure. At nine to ten years the entitlement peaks; at ten years it falls. Teamed's payroll system applies the correct band automatically, with the calculation visible on the invoice.

EOR payroll and contractor onboarding live on **one platform**. An Australia contractor who converts to payroll keeps their record, and that same employee can **graduate** to your own Australia entity without switching systems. Run the [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator) to see when EOR stops being right. EOR is the right model for a first Australia hire, **until it isn't**. Start from the Australia hiring overview.

Key sources: [Fair Work Ombudsman](https://www.fairwork.gov.au), [Fair Work Commission](https://www.fwc.gov.au), and [Australian Taxation Office](https://www.ato.gov.au).

## Frequently asked questions

How much notice must you give an employee in Australia?

Statutory minimum notice under Fair Work Act 2009 s.117 runs: 1 week for under one year of service, 2 weeks for one to three years, 3 weeks for three to five years, and 4 weeks for more than five years. Employees aged 45 or older with at least two years of continuous service receive one additional week, bringing the maximum to 5 weeks. Casual employees are not entitled to notice.

Who qualifies for redundancy pay in Australia?

Employees with at least 1 year of continuous service qualify for NES redundancy pay under s.119. Casual employees and employees of small businesses with fewer than fifteen employees are excluded. The entitlement follows a stepped scale by tenure band; it is not a simple weeks-per-year formula.

What is Australia's redundancy pay scale?

The NES scale runs from 4 weeks pay for one to two years of service, rising through the tenure bands to a peak of 16 weeks for nine to ten years, then falling to 12 weeks for ten or more years. Redundancy pay is calculated at the employee's base rate, with no statutory weekly pay cap. There is no upper limit on the total payment under the NES.

When does unfair dismissal protection apply in Australia?

Unfair dismissal protection applies after 6 months of continuous service for employers with fifteen or more employees, and after 12 months at small businesses. Compensation for unfair dismissal is capped at the lesser of 26 weeks of remuneration or A$ 91,550, based on the current high income threshold. General protections claims (adverse action, discrimination) apply from day one without a qualifying period.

When must final pay be issued after termination in Australia?

All final entitlements must be paid within 7 days of the termination date under Fair Work Regulations 2009 reg. 3.36. Payment in lieu of notice must be made on or before the termination date. Final pay includes outstanding wages, accrued annual leave, any redundancy pay owed, and other entitlements under the award or enterprise agreement.

Teamed Legal Operations

Australia's redundancy table catches people every time at the ten-year mark. The entitlement peaks in the nine-to-ten year band and then drops. An employer who assumes it keeps rising overpays; one who hasn't checked at all often underpays. The Fair Work Act is clear on the table but it doesn't warn you the direction changes.

A note from Tom Price-Daniel

Australia's NES redundancy scale peaks at 16 weeks between nine and ten years of service, then falls to 12 weeks at the ten-year mark.  
No other country's statutory formula works that way. Most employers don't know until they've already issued the letter.  
Get the band right before you calculate, not after.

Tom Price-Daniel · Co-founder, Teamed

## Related Australia guides

- Hiring in Australia, overviewparent
- [Employer of Record overview](/lp/employer-of-record)core
- [Pricing, Zero FX Fixed](/pricing)core
- [UK termination and severance](/country-hiring-guides/united-kingdom/termination-and-severance)neighbour
- [EOR vs Entity Crossover Calculator](https://www.teamed.global/tools/crossover-calculator)tool
- [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost)tool
- [Talk to an expert](https://www.teamed.global/contact)CTA

A note on this page.

This is a guide, not legal, tax or accounting advice. Rules change and vary by jurisdiction, so verify current requirements with the relevant authorities, the Fair Work Ombudsman (fairwork.gov.au) and the Fair Work Commission (fwc.gov.au) for Australia, or speak to a qualified professional, before relying on any specific framework. The unfair dismissal compensation cap updates annually on 1 July when the Fair Work Commission sets the new high income threshold; the figure shown reflects the cap applicable from 1 July 2025.