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Termination in Australia – A Guide for Overseas Employers

Employing staff abroad will require your company to follow the termination rules in the host country, and this is true in Australia where terminating employees can be more difficult than in other locations. In general, any termination requires that there be some reasonable cause, or for a business reason such as redundancy.

No matter the grounds for termination, there are notice periods based on length of service, and in some cases severance pay. If you are new to the Australian market, how will you learn all of the rules about termination, especially if they differ from your home country?
Where can you find a local resource to guide you through the termination process when necessary? Here is an example to give you an idea of what is involved:

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Client Case Example: Redundancy in Australia

One of our clients needed to terminate a local Australian employee due to redundancy (the position was no longer needed). The employee was past the probation period, but had been employed less than 12 months.

Solution: Here’s how we helped
We told our client that the termination rules according to their employee’s situation were as follows:

  • The employee can be terminated with one month notice, or payment in lieu.
  • Must be paid any accrued annual leave.
  • The employee is not entitled to severance/redundancy pay because they have been employed less than 12 months.
  • The employee can not claim for unfair dismissal because they have been employed less than 6 months which means a valid reason for ending their employment is not required in this situation.

The termination process is as follows:

  • We told the client they should advise us in advance the termination date so we can prepare an estimate on the final payroll cost and the amount payable to the employee.
  • We will prepare an official notice of termination which the client then can present to the employee in a meeting.
  • The client should set a meeting with the employee in termination and advise them that they are being made redundant. The employee should agree to the final work day, handover process and equipment being returned to the client.
  • The client will also explain the payout which the employee will receive (this is also listed in the official notice of termination).
  • The employee should be advised that they will interact with us in processing their final payroll. We typically make the final payment including all payout amounts on the final work day. But this can also be on the next normal payroll date depending on the timing.

Need more information about Australia?

This is only one example of how we work closely with our clients and local partners to make sure that all employment laws are followed, including the termination of employees. If you need more information about Australia, we can answer your questions about:

What are the notice periods and justifiable causes for termination?

When do you need to pay severance?

How do you calculate the amount of annual leave that has to be paid out to a terminated employee?

We make international employment simple, in the areas of payroll, immigration and legal compliance.

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