Navigating employee terminations is never easy - but doing it the right way is essential to protect your business and your people. In Australia, Section 117 of the Fair Work Act 2009 (Cth) sets out the minimum notice you must give when ending an employee’s employment.
In this guide, we break down Section 117 in plain English: who it applies to, how much notice you need to give, how to deliver it correctly, when pay in lieu is appropriate, and the practical steps to stay compliant. We’ll also highlight common mistakes employers make and the simple documents that help you stay on the right side of the law.
If you’re unsure about what to do next, don’t stress - with the right process and clear paperwork, you can manage terminations respectfully and lawfully.
What Does Section 117 Require?
Section 117 of the Fair Work Act sets minimum standards for termination notice. In short, if you terminate an employee (outside limited exceptions), you must:
- Provide written notice stating the date of termination (the last day of employment).
- Give at least the minimum period of notice based on the employee’s continuous service (with an extra week for some older employees - more below).
- Alternatively, make a payment in lieu of notice that equals what the employee would have earned during the notice period.
Importantly, Section 117 is a floor, not a ceiling. If an Employment Contract, Modern Award, or Enterprise Agreement provides more generous notice, you must follow the higher entitlement.
Who Is Covered (And Who Isn’t)?
Section 117 applies broadly to employees in the national workplace relations system (most employees in Australia), whether they are full-time or part-time.
Employees Covered
- Permanent full-time and part-time employees.
- Fixed-term employees if you terminate early (before the contract end date).
Employees Not Covered
- Casual employees - genuine casuals are not entitled to termination notice under the National Employment Standards (NES).
- Fixed-term employees at natural expiry - if the contract ends on its stated end date, notice under Section 117 is generally not required (unless the contract or an award says otherwise).
- Employees dismissed for serious misconduct - you can end employment without notice if lawful serious misconduct is established (see below).
“Probation” does not remove NES notice. If an employee is within a probation period and you decide to terminate, the NES minimum notice still applies unless an exception (like serious misconduct) lawfully applies. Your contract can’t undercut the NES.
How Much Notice Must You Give?
Minimum notice depends on “continuous service” - the length of unbroken employment (some unpaid absences don’t break service, but check the Act if your scenario is complex). These are the minimum periods:
| Continuous Service |
Minimum Notice |
| 1 year or less |
1 week |
| More than 1 year and up to 3 years |
2 weeks |
| More than 3 years and up to 5 years |
3 weeks |
| More than 5 years |
4 weeks |
If the employee is aged 45 or older and has at least 2 years of continuous service, add one extra week to the above.
Getting Your Calculation Right
Take the time to calculate service accurately and check any applicable award/enterprise agreement. For edge cases and mixed service (e.g. a casual who later became permanent), it’s wise to cross-check with your contract and industrial instrument, or follow a structured approach such as the steps in a notice period calculation guide.
Giving Notice Properly (And Payment In Lieu)
How you give notice matters just as much as how much you give.
Written Notice: Approved Methods Under the Act
The Act requires written notice that states the date of termination. It sets out specific methods of delivery: you can give the notice to the employee personally, leave it at their last known address, or send it by pre‑paid post to that address.
While many workplaces also send email for clarity, Section 117 itself does not list electronic delivery. If you do email for convenience, it’s safest to also provide notice using one of the Act’s approved methods and keep a record of delivery.
Payment In Lieu Of Notice
Instead of requiring the employee to work through the notice period, you may pay the equivalent of what they would have earned during that period (including ordinary pay and applicable allowances). This is often called “pay in lieu of notice.”
When you pay in lieu, the employment ends immediately (on the stated termination date), but you must still confirm the end date in writing and make a correct payment. For practical steps and common questions, see this overview of payment in lieu of notice.
Serious Misconduct (No Notice)
If an employee commits serious misconduct (for example, theft, fraud, violence, or a serious safety breach), you can dismiss them without notice. However, you still need a fair and reasonable process: investigate, give the employee an opportunity to respond, and document your findings. Where there is real risk or sensitivity, consider your options around suspending an employee pending investigation before making a final decision.
Step-By-Step: Ending Employment Lawfully
Here’s a practical process you can follow to align with Section 117 and the broader employment law framework:
-
Check the rules that apply to this employee.
- Review the Employment Contract, any applicable Modern Award or Enterprise Agreement, and your policies. If those documents provide longer notice or extra steps, follow them.
- Confirm whether the situation falls under an exception (e.g. casual, serious misconduct, fixed-term at natural expiry).
-
Calculate the minimum notice period.
- Work out continuous service and whether the +1 week for 45+ and 2+ years applies.
- Check if a longer contractual or award entitlement applies.
-
Decide whether the employee will work the notice or be paid in lieu.
- Consider business needs, access to systems and clients, and team impacts.
- If paying in lieu, calculate the correct amount and set the final employment date accordingly.
-
Prepare and deliver the written notice correctly.
- State that employment is ending, include the date of termination, and deliver the notice by an approved method (personal delivery, leaving at last known address, or pre‑paid post).
- Keep a copy and proof of delivery on file.
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Process final pay and documents.
-
Close out access and communicate respectfully.
- Collect property, remove system access, and communicate the change to relevant team members on a “need to know” basis.
- Where appropriate, offer support such as a reference or EAP details.
What About Redundancy?
Redundancy has additional rules (such as consultation and redundancy pay in many cases). Before you proceed, check whether redundancy applies and, if so, follow the correct process and payments - you can start by reviewing how to calculate redundancy pay.
Probation Periods
Probation can simplify performance management and reduce unfair dismissal risks, but it does not remove NES notice obligations. If you decide not to confirm an employee after probation, ensure you still give the correct notice or pay in lieu. For process considerations, see termination during probation.
Common Pitfalls And Practical Tips
Pitfalls To Avoid
- Using the wrong notice period. The most common error is underestimating service length or overlooking the extra week for employees aged 45+ with 2+ years’ service.
- Ignoring a more generous instrument. If the contract, award, or enterprise agreement provides more notice than the NES, you must honour the higher entitlement.
- No written notice or incorrect delivery. Verbal terminations or email-only notices can create disputes. Use a compliant written notice and an approved delivery method under the Act.
- Misclassifying the exception. Don’t label an issue “serious misconduct” without a proper investigation, or assume someone is a “casual” if there’s a firm advance commitment to work.
- Overlooking other entitlements. In appropriate cases, remember redundancy obligations and ensure all accrued entitlements are paid.
Practical Tips
- Document everything. Keep copies of the notice, proof of delivery, investigation records (if any), and your calculations for notice and final pay.
- Plan the exit. If the employee will work notice, plan duties, access and handover; if paying in lieu, coordinate a clean, respectful exit on the day.
- Use clear templates and policies. Having a tailored Workplace Policy suite and an up-to-date termination letter template avoids last-minute mistakes.
- Be consistent and fair. A respectful tone and clear reasons (where appropriate) support culture and reduce dispute risk.
Essential Documents To Have In Place
- Employment Contract: Sets notice entitlements, probation terms and misconduct processes in writing.
- Workplace Policies: Clear procedures around performance, conduct, investigations and termination support fair, consistent decisions.
- Termination Letter Template: Ensures every notice includes the key details and is delivered correctly.
- Redundancy and Consultation Letters (if applicable): Help you meet award/enterprise obligations and document your process.
- Final Pay Checklist: Confirms wages, leave, and any other entitlements are paid on time and recorded properly.
If you don’t have these documents or they’re out of date, it’s worth updating them now so you’re ready when difficult decisions arise - not after.
Key Takeaways
- Section 117 requires written termination notice (or pay in lieu) based on continuous service, with an extra week for eligible employees aged 45+ with 2+ years’ service.
- Use an approved delivery method under the Act (in person, left at last known address, or pre‑paid post) and keep proof of delivery.
- Casuals aren’t covered by NES termination notice, and serious misconduct can justify dismissal without notice - but only after a fair process.
- Contracts, awards and enterprise agreements can increase the minimum notice - always check and follow the more generous entitlement.
- Don’t forget the rest of the process: correct final pay, the option of pay in lieu, and redundancy rules where they apply.
- Strong foundations - a clear Employment Contract, practical policies, and compliant templates - make lawful terminations far easier and less risky.
If you’d like a consultation about Section 117 compliance, pay in lieu, redundancy or drafting the right employment documents for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
