Termination Letter (Redundancy)

This Termination Letter (Redundancy) explains that you are terminating an employee on the basis of redundancy. It is important that you follow the correct procedures when terminating an employee by meeting with the employee and issuing them with a formal letter. The termination of any employee should always be set out in writing. A written record can help protect your business if any questions or legal issues arise regarding the termination, such as a legal claim or refusal to return company property. It is recommended that you seek legal advice before terminating an employee as there are a number of legal options available to a disgruntled employee, including commencing proceedings against an employer for unlawful termination or unfair dismissal.

What’s the difference between a termination letter and deed of release?

A termination letter is used when an employer needs to terminate an employee either due to layoffs, poor performance or any other appropriate reasons. It is important to have a termination letter as it provides a physical record of termination in the event that legal proceedings are initiated.

A deed of release is a formal agreement by which an employer and employee seek to settle a dispute. A deed of release is usually used when an employee has made, or is considering to make, a claim against their employer due to unfair dismissal, unlawful termination or unpaid entitlements.

As an employer, do I have do give a reason to terminate an employee?

An employer must follow its own disciplinary procedures and policies, in which require procedural fairness to be given to employees. However, there is no common law obligation on an employer to give reasons for terminating an employment contract on notice.

Further, there is no implied right of an employee under an employment contract to be head in relation to grounds for intended dismissal. However, failure to provide an employee a reasonable opportunity to respond to grounds for dismissal prior to the decision will increase the likelihood of the dismissal to be found to be unfair by the Fair Work Commission unfair dismissal scheme.

So legally, no, you do not need to provide a reason to terminate an employee. However, for legal security, it is best to communicate the grounds that concern the individuals employment and provide an opportunity for the employee to respond to such grounds prior to dismissal.

How much notice are employers required to provide employees upon termination?

Although this may be stipulated in an employment agreement, the minimum notice period will depend on the period of continuous service. The minimum notice periods may be found on the Fair Work website.

How do I terminate an employee before the end of their probation period?

Employers can put their employees on a probation period (also known as a probationary period) to assess if employees are suitable for the role and business. A probation period can range from a few weeks to a few months. In the event that an employer seeks to terminate an employee before their probation period they still need to follow the appropriate legal procedures. It is important to know the probation period is still a normal period of employment, during which the employee is entitled to the statutory minimum entitlements of employment. Further, it is important to be acutely aware of the probation period and be informed as to whether the employee is to receive further entitlements after the probation period concludes.

Although the probation provides a safer option for employers to test the waters with new employees, it must be noted that an employer can not terminate an employee during any period for an unlawful reason, such as race, sex, age, religion etc. Further, an employee can not be terminated due to a lodged workplace complain or due to an enquiry the employee has made as this would conflict the general protections regime.

How is an employee’s annual leave handled following termination?

Following termination an employee is entitled to ‘final pay’, which includes any financial commitments owed by the employer during the employment period.

Under final pay an employee is entitled to any accumulated annual leave, including annual leave loading that would have been paid during the employment period.

There may be a specified date in which final pay must be paid under an award, employment contract or registered agreement. If no agreement exists, it usually best practice for an employee to be paid on their last day of work or the following day.