Going through a retrenchment process can be confusing. There’s a lot of information to take in and not everyone’s circumstances are the same. How does the retrenchment process work, and what do you need to know?

Notice of termination or payment in lieu of notice

The period of notice will depend on how long you have been with the business. An employer must provide written notice of the day of termination when ending employment.

According to the Fair Work Ombudsman, an employer has to give the following minimum notice periods when dismissing an employee:

Period of continuous service

Minimum notice period

1 year or less

1 week

More than one year but no more than 3 years

2 week

More than three years but no more than 5 years

3 weeks

More than 5 years

4 weeks

If you are over 45 years old and have completed at least two years of service with the business, your employer has to give you an additional week of notice.

In the event the employer requests you to stop working before the end of the notice period, the employer may choose to provide 'payment in lieu of notice'. The amount paid to the employee must be equal to or exceed the full amount the employee would have been paid if they worked until the end of the notice period. This includes incentive-based payments and bonuses, loadings, monetary allowances, overtime, penalty rates and any other separately identifiable amounts.

Notice of termination or payment in lieu does not apply if you are:

  • casual
  • employed for a specified period of time, task or season (e.g. a fixed term contract or a seasonal fruit picker)
  • fired because of serious misconduct (theft, fraud, etc.)
  • a trainee employed for a set period of time or for the length of the training arrangement
  • daily-hire employees working in the building and construction industry, meat industry and livestock slaughter within the meat industry.


The payments you will receive after a retrenchment process depend on many variables – such as length of service, type of contract, unpaid leave and the type of industry you have worked in.

Employment Separation Certificate

Depending on your circumstances, Centrelink may provide financial assistance after losing your job. If you are interested in that service, you need to request an Employment Separation Certificate. You need to present this document to claim support payments.

Access information and support throughout the retrenchment process

Maintaining a good relationship with your employer will help you through the retrenchment process. You can also seek support and information to help you navigate your journey.

Department of Human Services – Centrelink
Ph: 13 61 50
Open Monday to Friday 8am–8pm

What they can do for you:

  • Income support
  • Payments to help you study or train
  • Financial information service
  • Social work services
  • Services if your employer has gone bankrupt or entered liquidation
  • Temporary financial relief from loan payments.

Fair Work Ombudsman
Ph: 13 13 94
Open Monday to Friday 8:00am–5:30pm

What they can do for you:

  • Information about the retrenchment process
  • Payment calculators to help you analyse your particular situation.

Redundancy InfoLink

What they can do for you:

  • Practical redundancy information and advice.