Workplace and equal opportunity laws give all staff certain protections when their employment ends.

Dismissing staff

An employer who decides to dismiss a worker must have a valid reason - if there is no valid reason it could be breaking the law.

Valid reasons include:

  • poor performance
  • serious misconduct
  • changes to your operation.

The Commonwealth Fair Work Act 2009 states that dismissal is unfair when it is harsh, unjust or unreasonable.

This could refer to the reason for dismissal or the way it happened.

Some workers are not currently covered by unfair dismissal laws. They include employees who are:

  • employed for less than six months
  • contracted for a fixed term
  • contracted for a specified season
  • on probation for a reasonable set period
  • casual workers engaged for a short period
  • trainees at the completion of their training contract
  • earning over $142,000 annually and not covered by an Award or Agreement (as at 1 July 2017- 30 June 2018)
  • genuinely made redundant because of operational changes.

The Commonwealth Fair Work Act 2009 states a number of circumstances where a termination is unlawful.

These include not giving a worker the required notice or payment instead of notice, and when an employer fires a worker for discriminatory reasons.

It can be unlawful to be terminated for:

  • temporary absence from work due to injury or illness
  • trade union membership, non-membership or taking part in union activities
  • making a complaint or taking part in proceedings against an employer
  • disability, race, age, sex, sexual orientation, pregnancy, marital status, family responsibilities, religion, political opinion or social origin
  • absence from work during maternity leave or other parental leave
  • temporary absence from work for voluntary emergency work.

Workers may be able to claim unlawful termination if they are not given the notice and redundancy pay due under their Award or Agreement.


Retrenchment, or redundancy, is when a worker loses their job because it's no longer needed.

It's important that the employer does not make the person redundant but the position redundant.

A worker whose job is genuinely redundant cannot make a claim for unfair dismissal under federal law.

Retrenchment or redundancy might happen due to:

  • technology changes
  • the workplace being restructured
  • the employer no longer being able to afford to pay the worker
  • the business being sold and workers are not kept on by the new owners.

Many workers are legally entitled to a notice period and severance pay if they are retrenched - most awards and workplace agreements specify the requirements. For more information contact SafeWork SA.

Businesses with fewer than 15 staff may not be required to pay workers severance pay. Contact the Fair Work Ombudsman for more.


Retirement generally means leaving paid work with no intention of returning to work in the future.

Most people retire at 55 years or over.

Compulsory retirement at 65 was made unlawful in South Australia in 1993.

Some staff may feel forced to retire because of the attitude and behaviour of their employers including:

  • threatening to retrench or dismiss older staff because of their age
  • training younger staff and not older staff
  • giving older staff demeaning, fewer or low status tasks
  • using medical tests to force staff to retire
  • using fixed term contracts (it is generally unlawful to employ older staff on fixed term contracts when younger staff are on long term or permanent contracts)
  • withdrawing benefits or stopping accrual of benefits based on years of service, for example increments or bonuses.

If workers feel like they have been forced to retire they may lodge an age discrimination complaint.


There are some areas where staff are forced to retire:

  • judges and magistrates must retire at 70
  • Australian Defence Force personnel must retire at 65.

Instead of staff retiring from work completely, phased retirement or flexible working arrangements could be arranged.  This could involve:

  • reducing hours and/or working days
  • changing the job to make it less stressful or labour intensive
  • taking on a training or mentoring role
  • retiring as a member of staff, but working as a consultant
  • continuing to work full time with additional purchased leave entitlements and other flexible working arrangements.

Phased retirement is generally an individual arrangement between you and your staff.  To ensure that phased retirement arrangements work well:

  • Foster a culture that respects older staff who reduce hours or withdraw from former duties.
  • Make sure phased retirement and flexible working arrangements are consistent with equal opportunity requirements.

Related information can be found at Australian Tax Office website - Transition to retirement