Termination Letter Pack | s.119 Fair Work Act 2009

An employment termination letter is the employer's formal written notification that the employment relationship will end, stating the ground for dismissal, the effective date and the way notice is being handled. Australian law does not require dismissal to be in writing as a general rule, with one hard exception: section 117(1) of the Fair Work Act 2009 provides that an employer must not terminate an employee's employment unless written notice of the day of termination has been given. That single subsection does most of the work. A verbal dismissal followed by a payslip is technically non-compliant notice, and the Commission treats sloppy paperwork as circumstantial evidence of a sloppy process.

The distinction that matters is between a termination letter and a letter of separation or employment separation certificate. The separation certificate is a Services Australia form completed after the event so a former employee can claim income support; it has no evidentiary weight in a dismissal dispute. The termination letter is the operative document. It fixes the employer's stated reason at the moment of dismissal, and the employer cannot later invent a better reason. Where an employer writes "restructure" and then argues performance at hearing, the Commission reads the inconsistency as a sign the redundancy was never genuine within section 389. Templates covering the front end of the relationship sit in our Australian employment contracts and offer letters collection, and the termination letter should always be read against the contract it ends.

Termination in Australia runs on the Fair Work Act 2009 (Cth), supplemented by the Fair Work Regulations 2009 and any modern award or enterprise agreement covering the role. Notice comes from section 117, which sets a scale running from one week for service of a year or less to four weeks for more than five years, with an extra week for employees over 45 who have completed at least two years of continuous service. Notice may be worked or paid out in lieu at the full rate the employee would have received for ordinary hours. Redundancy pay comes from section 119, and the statutory scale is the arithmetic that most letters get wrong. The scale is not linear. The Fair Work Ombudsman's published scale runs from four weeks at one year of continuous service through to sixteen weeks at nine years, then drops back to twelve weeks at ten years or more, on the logic that long service leave picks up the slack at that tenure. Redundancy pay is calculated at base rate for ordinary hours and excludes bonuses, loadings, allowances, overtime and penalty rates. See the Fair Work Ombudsman's official guidance on National Employment Standards redundancy pay and continuous service for the full table and the award carve-outs.

Two exclusions decide whether section 119 bites at all. Redundancy pay is owed only where the employee has at least one year of continuous service and the employer employs at least fifteen people. Small business employers sit outside the NES redundancy obligation, though certain awards, notably in timber and building, impose one anyway.

Unfair dismissal is the risk the letters are designed against. Section 383 sets the minimum employment period at six months for a non-small-business employer and one year for a small business employer, and section 394 gives a dismissed employee 21 calendar days from the date the dismissal takes effect to apply to the Commission. Serious misconduct takes its meaning from regulation 1.07 of the Fair Work Regulations 2009: conduct causing serious and imminent risk to health and safety or to the reputation or profits of the business, or conduct inconsistent with the continuation of the contract.

The most frequent trigger is an operational restructure where a role genuinely disappears. Section 389 is strict about what "genuine" means: the job must no longer be required to be performed by anyone because of changes in the operational requirements of the business, the consultation obligation in the applicable award or enterprise agreement must have been met, and redeployment elsewhere in the business or an associated entity must not have been reasonable. Refilling the position three months later is the classic way employers lose. The redundancy letter in this pack is drafted to record all three limbs on the face of the document, which is precisely what a Commission member looks for at conciliation.

Sustained underperformance is the second scenario, and the one small business employers most often mishandle. Performance dismissal requires a warning, an explanation of what is deficient, and a real opportunity to improve. The Full Bench has made clear that a small business must give a written or verbal warning explaining why the employee is at risk of dismissal and a reasonable chance to fix the performance, with short windows such as four days likely to be found insufficient. The performance letter here is the terminal step of that sequence, cross-referencing prior warnings by date.

Serious misconduct covers the third. Theft, fraud, violence, sexual harassment and serious breaches of work health and safety procedures each justify summary dismissal without notice, provided the employer holds a reasonable belief formed after a reasonable investigation. An edge case worth flagging: an employee earning above the high income threshold who is neither award-covered nor agreement-covered is not protected from unfair dismissal at all under section 382, but remains fully protected against adverse action under the general protections in Part 3-1. The letter still matters. So does the case where a dismissal in the first year of small business employment sits outside unfair dismissal jurisdiction yet squarely inside discrimination law. Related engagement documents for non-employees sit in our independent contractor and service agreement templates, since misclassified contractors are a growing source of dismissal claims.

• The statement of ground and effective date opens each letter and is the clause the Commission reads first. It names the ground in statutory language, redundancy under section 389, dismissal for a valid reason relating to capacity, or summary dismissal for serious misconduct under regulation 1.07, and it fixes the date the dismissal takes effect, which is the date the 21-day clock in section 394 starts running.
• The notice and payment in lieu clause is drafted to the section 117 scale, including the additional week for employees over 45 with two years of service. It states whether notice is worked or paid out, and where the contract provides a longer notice period than the statute, the letter applies the contractual figure because the NES is a floor and never a ceiling.
• The redundancy pay calculation in the redundancy letter itemises the section 119 entitlement in weeks against the employee's completed years of continuous service, then confirms it is calculated at base rate excluding loadings and overtime. It also flags that periods of casual service do not count toward continuous service for this purpose.
• The consultation and redeployment record captures the dates consultation occurred, who attended, what alternative roles were considered and why redeployment was not reasonable. Without this paragraph a redundancy letter is a bare assertion, and section 389(1)(b) is where genuine redundancy defences most often collapse.
• The prior warning schedule in the performance letter lists each earlier warning by date, subject and improvement window given. This is the paragraph that evidences Code compliance, and it is the reason a completed Small Business Fair Dismissal Code Checklist should be kept with it.
• The final pay and entitlements clause confirms payment of outstanding wages, accrued but untaken annual leave, any long service leave entitlement and superannuation, with the payment date stated. Final pay disputes are the most common add-on to an unfair dismissal claim.
• The support person and investigation record notes that the employee was offered the opportunity to have a support person present at the discussion, since refusing that request is an express factor under section 387(d).

New South Wales, Victoria, Queensland, South Australia, Tasmania and the Northern Territory are, for private sector purposes, fully within the national workplace relations system. A Pty Ltd company in any of these jurisdictions is a constitutional corporation, the Fair Work Act 2009 applies directly, and the letters in this pack work without modification. The state overlay that does bite is long service leave, which remains state legislation and must be paid out on termination where the threshold is met. NSW applies the Long Service Leave Act 1955 (NSW) with a pro rata entitlement after five years in defined circumstances, while Victoria's Long Service Leave Act 2018 (Vic) allows access after seven years and requires payout on any termination after that point. Getting the final pay figure wrong in the letter invites a separate underpayment claim.

Western Australia is the genuine exception and the one that catches interstate employers. Sole traders, partnerships and unincorporated trusts operating in WA remain in the state system under the Industrial Relations Act 1979 (WA), which means the Fair Work Act notice and redundancy provisions do not apply to them and the WA Industrial Relations Commission, not the FWC, hears the claim. Termination in WA turns on the Minimum Conditions of Employment Act 1993 (WA) and the applicable state award. Confirm the employing entity's structure before serving a WA letter, because a Pty Ltd in Perth is national system and a partnership next door is not.

Queensland and Victoria add a further layer for employers with domestic and family violence provisions in enterprise agreements, and Queensland's Industrial Relations Act 2016 covers state and local government employees who sit outside the FWC entirely. The Australian Capital Territory follows the federal position without a state industrial system of its own, so ACT private employers use the federal letters as drafted, but the Long Service Leave Act 1976 (ACT) sets its own accrual and payout rules. Employers in any jurisdiction who are ending a director's or shareholder's engagement rather than an employee's should read the letter against the shareholders agreement for Australian Pty Ltd companies, because removing a person from payroll does not remove them from the register.

You begin by selecting which of the three letters applies, and the form asks the questions that decide the answer rather than assuming you know. It asks headcount at the date of dismissal, because fewer than fifteen employees makes you a small business employer, which flips both the minimum employment period to twelve months and the section 119 redundancy obligation off. It asks the employee's start date and date of birth, then calculates the section 117 notice entitlement, adding the extra week where the employee is over 45 with at least two years of service. For the redundancy letter it applies the statutory scale to completed years of continuous service and prints the entitlement in weeks, including the step down at ten years that manual calculations routinely miss.

From there the form adapts to the ground. The performance letter prompts you for each prior warning by date and subject, and the misconduct letter prompts for the investigation dates, the allegations put to the employee and the employee's response. Both record whether a support person was offered. You then enter the final pay components and the payment date, add your business details and the signatory's position, and download in Word and PDF. Edit the Word file if your contract sets a longer notice period than the statute. Everything else is already drafted to the Act.

The most expensive mistake is serving notice by text message or email without a signed letter, then arguing at hearing that section 117(1) was satisfied. It was not, and the Commission reads the shortcut as a proxy for the whole process. Nearly as common is backdating the effective date to shorten the payout, which does not shorten the twenty-one day window and does hand the applicant a credibility argument. Employers also miscalculate section 119 by reading the scale as rising indefinitely and paying sixteen or eighteen weeks at ten years of service when the statutory figure drops back to twelve, or by inflating the base rate with car allowances and commission that the section expressly excludes. Overpaying is not a defence to anything, but it is real money.

On the redundancy side, the recurring failure is treating consultation as an announcement. Almost every modern award requires the employer to consult once a definite decision to make major change is made, provide information in writing and genuinely consider employee responses. Telling someone their role has gone in the same meeting where you hand them the letter is not consultation, and it converts a defensible restructure into a section 389 problem. In performance cases, employers issue a final warning and dismiss four days later, which the Full Bench has already held is not a reasonable opportunity to improve. And in misconduct cases, the belief must be formed after an investigation, not before it. Dismiss first and investigate afterwards and the Code defence disappears, no matter how bad the conduct turns out to have been.