Ending employment
Employment ends when an employee resigns, is made redundant or is dismissed.
Resignation
An employee has a right to resign but should give the employer notice in writing.
Redundancy
A job becomes redundant when the work performed by an employee is no longer necessary, because the job has been replaced by technology or the work is restructured.
Employees may be entitled to redundancy benefits, depending on the state award or the agreement they were employed under.
Dismissal
In order to dismiss an employee you must have a valid reason. This reason must be based on poor performance, conduct or changes to your operational requirements.
Dismissing an employee can take a number of forms, each with differing requirements. You must make sure you understand these requirements to ensure you avoid any legal problems later.
A dismissal is unfair when it is 'harsh, unreasonable or unjust'. There are both federal and state laws governing unfair dismissal. States and territories have publications outlining whether a termination is lawful and whether the reasons for termination are valid and fair considerations.
Tax implications
There are certain taxation implications when termination of employment occurs. The Tax Office provides guidance on meeting your obligations to employees who stop working for you.
What to do...
- Refer to the Fair Work Online website for information on termination of employment.
- See the Tax Office website about Eligible termination payments when employees stop working for you.
- Read information on ending employment in your state or territory.
