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You may deal with the exit of an employee at some stage of running your business. There are different rights, obligations and legislation that come as a result of ending employment.

Resignation

Employees can resign at any time without discussing the decision with you. However, modern awards, enterprise agreements and employment contracts may require a minimum notice period.

If you do not need the employee to work their notice period, you can pay them in lieu of notice and let them leave early.

Redundancy

A job becomes redundant when an employer either:

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

You may need to give employees redundancy pay and entitlements depending on their length of service and the award, agreement or contract they were employed under.

As part of the redundancy process, you can use and share the following information with employees about support and resources: 

  • Employees and their partners have immediate access to tailored employment services under the Early Access Initiative, before they're eligible for income support. For information about the available support services, visit Next steps if you lose your job.
  • The What’s Next? website is an online self-help resource for employees and employers.
  • The Employer Checklist helps employers know their obligations, entitlements and alternatives to retrenchment.

Dismissal

If you need to dismiss an employee, you must have a valid reason, such as:

  • poor performance
  • conduct
  • changes to operational requirements.

If you dismiss an employee, you may need to give them notice. Go to the Fair Work Ombudsman website to learn more about:

If you’re thinking about dismissing an employee, you must make sure you’re acting fairly and lawfully. Go to the Fair Work Commission’s website to learn about:

If you dismiss an employee, they can challenge the dismissal with the Fair Work Commission if they think it was unfair. However, if you’re a small business with fewer than 15 employees, an employee needs to have been working for you for at least 12 months before they can make a claim for unfair dismissal.

Exit interview

When an employee leaves your business, doing an exit interview with them can be a great way to learn from their experience.

An exit interview is a conversation that helps you find out:

  • why a staff member is leaving your business
  • how you could improve working conditions
  • aspects of the job the employee enjoyed most and lease
  • any relationships that need to be managed better
  • whether your recruitment, selection and training for staff need improving
  • the level of morale in your business.

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