Termination Letter
A formal termination letter is essential documentation for ending an employment relationship — and a critical record if the decision is later challenged.
What is a Termination Letter?
A Termination Letter formally communicates the decision to end an employment relationship. Under the Fair Work Act, an employer must give an employee written notice of termination unless termination is for serious misconduct (in which case summary dismissal — immediate termination without notice — may apply). The letter must state the reason for termination, the notice period or that payment in lieu of notice will be made, and the last day of employment.
From an employer's perspective, the termination letter is also an important risk management document. If the employee makes an unfair dismissal claim, the General Protections claim, or alleges they were not given proper notice, the letter provides contemporaneous evidence of what was communicated and when. It should be factual, professional, and free of language that could be construed as discriminatory or retaliatory.
When do you need a Termination Letter?
- ✓When terminating any employee for any reason, including redundancy, performance, or misconduct
- ✓At the end of a fixed-term contract to formally notify the employee the contract will not be renewed
- ✓When accepting a resignation where a specific last day needs to be confirmed in writing
- ✓Any time an employment relationship ends — even by mutual agreement
Key provisions to include
Reason for Termination
Clear statement of the ground — redundancy, performance (with reference to the PIP process), serious misconduct, mutual agreement, or fixed-term expiry.
Notice Period
Notice in accordance with the contract and NES, or payment in lieu.
Last Day of Employment
Specific date so there is no ambiguity.
Entitlements on Exit
Accrued annual leave payout, superannuation, and return of company property.
Confidentiality Reminder
Post-employment confidentiality obligations continue.
Right of Response
For performance terminations, reference to the opportunity already provided to respond.
Common mistakes to avoid
Not giving the required notice under the NES (based on length of service) or more if the contract requires it
Using emotional or accusatory language — keep the letter factual and professional
For redundancy: not checking whether genuine redundancy requirements are met (role no longer required, consultation, redeployment considered)
Forgetting to calculate and include accrued annual leave in the final payment
Frequently asked questions
What is the minimum notice period I must give an employee in Australia?
The NES minimum notice period depends on the employee's period of continuous service: less than 1 year = 1 week; 1–3 years = 2 weeks; 3–5 years = 3 weeks; over 5 years = 4 weeks. Employees over 45 with at least 2 years of continuous service get an extra week. The employment contract may require longer notice, in which case the contract notice period applies.
Can I terminate an employee immediately for serious misconduct?
Yes. Summary dismissal (immediate termination without notice) is available for serious misconduct under the Fair Work Regulations, which defines it as wilful or deliberate behaviour inconsistent with the employment relationship (e.g. theft, assault, fraud, intoxication, serious breach of OHS). The employer must still follow procedural fairness — notify the employee of the allegation and give them an opportunity to respond — before deciding to dismiss.
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