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You may be able to terminate an employee based on their performance if they're unable to perform their job or because of misconduct.
It’s important to give them the correct amount of notice (or payment in lieu of notice) when you’re terminating their employment.
Minimum notice period
The following table from the National Employment Standards, sets out the minimum amount of notice you must give an employee. However, always check their employment contract to ensure a longer period hasn’t been agreed to.
|Employee's period of continuous service with the employer on the first day notice is given||Required notice period|
|Not more than one year||One week|
|More than one year but not more than three years||Two weeks|
|More than three years but not more than five years||Three weeks|
|More than five years||Four weeks|
If your employee is over age 45 and has completed at least two years' of continuous service (as at the end of the first day notice is given), the employee is entitled to an additional week’s notice.
Notice not required
When terminating an employee, you don’t need to give notice (or payment in lieu of notice) to:
- A casual employee
- A daily hire employee working in the building and construction industry
- A worker who is employed for a specified task or period of time
- A worker who is being terminated due to serious misconduct
- A worker (other than an apprentice) with a training arrangement, who has been employed for a specified time or is limited to the duration of the training arrangement.
If an employee resigns, they’re required to give you the same amount of notice that you must give them – excluding the additional week granted to employees aged over 45.
If an employee doesn’t give you the required notice, you may be able to withhold payment for a time equal to the notice period.
If you need help determining whether withholding is allowed under the employees Award or agreement, contact Master Builders’ Workplace Relations team.
Redundancy occurs when you no longer need a particular job to be performed due to a business restructure, reduced workload or another reason.
If you're making an employee redundant and terminating their employment, you must give the employee appropriate notice and any applicable redundancy pay. Redundancy pay is based on the National Employment Standards, unless an Award or enterprise agreement entitles an employee to higher redundancy pay.
You may be protected from an unfair dismissal claim if the termination is a ‘genuine' redundancy, which means complying with any consultation requirements under the relevant Award and making reasonable effort to redeploy the redundant employee.
Before making an employee redundant, we recommend checking redundancy requirements with Master Builders’ Workplace Relations team.
Building and Construction General On-site Award
The Building and Construction General On-site Award 2010 has a broader definition of redundancy, as it also covers employees who terminate their own employment. Under the Award, redundancy pay is graduated and based on years of service. It’s also capped at eight weeks pay for four or more years of service.
Individual agreements may allow payment into an industry redundancy fund, which can be offset against Award entitlements.
If you need help calculating correct redundancy pay for on-site employees, contact Master Builders’ Workplace Relations team.
Need more information?
If you haven’t found the answer to your questions on our website, give us a call or email us.