Employee Termination Checklist

Get the process right before the paperwork

Termination is the highest-risk moment in the employment lifecycle. Unfair dismissal claims rarely turn on whether the decision was justified — they turn on whether the process was fair. Before anything else, slow down and check the ground you're standing on. And because dismissal law is technical and unforgiving of shortcuts, treat this page as a general map and get specific advice for anything contested.

• Identify the termination type: resignation, dismissal for performance or conduct, redundancy, or end of a fixed term. Each has different rules and different paperwork.
• For performance or conduct dismissals, check your process history: was the employee told the problem, given a genuine chance to respond and to improve, and warned of the consequence? The Fair Work Ombudsman's Small Business Fair Dismissal Code is the benchmark for smaller employers — read it before you act, not after.
• For redundancy, confirm it's genuine: the role (not the person) is no longer required, consultation obligations under the relevant award were met, and redeployment was considered.
• Check notice requirements in the contract, the award and the National Employment Standards — the employee gets whichever is most generous, and payment in lieu is usually an option.
• Confirm who will conduct the conversation and have a witness present. Document what was said, when, and what was handed over.

Final pay: the calculation

• Pay out wages to the last day worked, including any outstanding overtime, penalties and allowances.
• Pay out accrued untaken annual leave (plus leave loading where the award provides it). Long service leave may also be payable depending on state rules and length of service — check your state's authority.
• Apply notice and redundancy entitlements per the NES and the award; the Fair Work Ombudsman's calculators reflect the current scales.
• Get the tax treatment right. Employment termination payments, unused leave and redundancy amounts are taxed differently from ordinary wages — the ATO sets out the rules, and payroll software usually needs to be told it's a termination pay.
• Pay final super on the components that attract it, and process the payment within the required timeframe.
• Pay within the timeframe your award or agreement requires — many instruments set a specific deadline for final pay, so check yours rather than assuming "next pay run" is fine.

Systems, property and records

• Revoke access the day employment ends: email, accounting software, banking authorities, customer systems, shared drives, door codes. Orphaned accounts are a leading cause of small-business data incidents.
• Recover property: laptop, phone, keys, cards, vehicles, uniforms — against the register you (ideally) created at onboarding.
• Transfer knowledge and reassign work: redirect their email, reassign open tasks and customer relationships, and capture anything only they knew.
• Finalise them in Single Touch Payroll and keep employment records for the legally required period — record-keeping duties outlast the employment.
• Provide a separation certificate promptly if requested — departing employees often need it for Services Australia.

The debrief most businesses skip

• Run an exit interview where appropriate — departing employees are unusually honest about what's broken.
• Ask what this departure exposed. If one resignation puts a whole function at risk, the problem isn't the resignation — it's how much of the business lives in individual heads. That's a fixable design problem; see founder dependency and how to systemise your business.
• Update the checklist itself with anything this termination taught you, so the next one is cleaner.