Employment Termination Letter

What is an employment termination letter?

An employment termination letter is a formal legal notice issued by employers to end an employment contract in Australia. This letter defines all essential information required to terminate an employment contract in a compliant manner, including:

• reason for termination;
• parties’ details;
• compensation amount;
• notice period;
• last workday; and
• any other additional information required.

Providing a notice of termination of employment letter is legally required to comply with Australian employment laws, including the Fair Work Act 2009 and the National Employment Standards (NES). This document can be customised for use by well-established businesses, startups, employment agencies, partnerships and sole-traders operating in Australia.

When do you need a termination of employment letter in Australia?

This letter of termination of employment can be used in the following situations:

• poor performance at work;
• failure to pass the probation period;
• misconduct at the workplace;
• disciplinary issues;
• the expiry of a fixed-term job contract;
• failure to improve after prior warnings.

This letter is not suitable, however, for situations when the employee is resigning. In that case a separate resignation letter should be used instead. This document cannot also be used to terminate a service agreement or an independent contractor agreement.

What should be included in this termination of employment letter?

Although a termination of employment letter has a simple structure, inclusion of certain key elements is necessary to ensure compliance with Australian employment law.

Employer and Employee Details

The text of the letter should outline full identification details of both employer and employee, including:

• full legal name;
• ACN or ABN number for an employer;
• mailing or business registered address;
• contact email and phone number;
• job title for an employee.

Termination Reason

A good termination of employment letter example should outline the reason for termination. In many cases, the employment ends because employees fail to comply with the recommendations set out in the previous warning letters.

However, sometimes termination of employment may occur due to severe misconduct or violation of the company’s internal rules, including harassment and discrimination.

Notice Period

As a general rule, employment relations should be terminated by sending a prior written notice. The duration of a notice period is defined in the Fair Work Act 2009:

• if employment lasts less than 1 year – 1 week
• if employment lasts between 1 and 3 years – 2 weeks
• if employment lasts between 3 and 5 years – 3 weeks
• if employment lasts more than 5 years – 4 weeks

In a limited number of cases the notice period is not required when ending employment with casual employees or when the employer pays compensation in lieu of the notice.

Final Payment

Another important element of a notice of termination of employment letter is to define the employee’s final entitlements. Such entitlements usually include:

• pro-rate salary payment;
• compensation in lieu of notice (only if the employment ends immediately);
• bonuses (if applicable).

Why use this employment termination letter template?

By customising a notice of termination of employment letter with FasterDraft, you get the following benefits:

• a letter fully compliant with the Fair Work Act 2009 and the National Employment Standards (NES);
• a letter created by legal professionals, and never by AI;
• a document with a clear structure and written in plain English;
• a letter suitable for your individual circumstances;
• a document available for instant download after the purchase;
• a document that helps to terminate employment relations in a compliant manner.

How to customise this employment termination letter with FasterDraft?

To get a fully customisable document template, follow a few easy steps below:

1. Click the “Create Document” button.
2. Answer simple questions in the form.
3. Select a template’s format – Termination of Employment Letter Template Australia PDF or Word.
4. E-sign the letter for free.
5. Make a payment.

Your fully personalised letter template is ready for instant download right after the purchase.

Australian Termination of Employment Letter Checklist

After the purchase, you must follow a few additional steps:

Read the Letter

It is important to read carefully the termination of employment notice letter to ensure all information provided is accurate. Check all the company’s internal procedures, applicable modern awards or enterprise agreements, as well as existing employment contracts to check the minimum required notice period.

Sign and Send the Letter

A letter of termination of employment must be signed and dated by a company’s authorised person, such as the head of HR, the employee’s immediate supervisor or the director. Without a signature this letter does not become a legally valid notice.

This letter can be sent to an employee in either of the following ways:

• to work email;
• to the current mail address;
• in person.

If the letter is delivered in person, make sure that you have an employee’s written acknowledgement of the recipient of such a letter.

Finalise the Termination

On or before the last working date indicated in the employment termination letter, ensure that:

• Employee returns all working equipment such as laptops or mobile phones (if any);
• The employee’s salary, as well as other applicable entitlements, is paid in full.
• Non-compete or confidentiality agreements with an employee are signed (if required).