How much notice do I have to give an employee?

Notice is based on the employee's continuous service with you at the end of the day you give notice:

• 1 year or less: 1 week
• more than 1 year, up to 3 years: 2 weeks
• more than 3 years, up to 5 years: 3 weeks
• more than 5 years: 4 weeks

Add 1 week if the employee is over 45 and has at least 2 years of continuous service. A 52 year old with 6 years' service gets 5 weeks. Time spent as a casual generally doesn't count towards service for notice.

Notice must be in writing and state the last day of employment. You can hand it over in person, leave it at or post it to their last known address, or send it electronically if they agree and can easily access it. Notice applies during probation too. The notice period starts the day after you give notice.

You don't have to have the employee work their notice. You can end the employment straight away and pay out the notice period, or have them work part of it and pay out the rest.

Payment in lieu must equal what they would have earned had they worked to the end of the notice period at their full rate of pay. That includes loadings, allowances, penalty rates, overtime and incentive payments they would have received. It must be paid on or before the day employment ends.

The notice rules in the National Employment Standards don't apply to:

• casual employees
• employees engaged for a specified period of time, task or season
• employees dismissed for serious misconduct, such as theft, fraud, assault or being intoxicated at work
• trainees (not apprentices) engaged only for the length of a training arrangement, and some daily hire workers in building and construction and the meat industry

Serious misconduct means deliberately behaving in a way that is inconsistent with continuing the employment, or conduct that causes serious and imminent risk to someone's health or safety, or to the reputation or profitability of the business. Refusing a lawful and reasonable instruction that is part of the job can also qualify.

You must still pay all outstanding entitlements, such as wages owed and unused annual leave. If you rely on serious misconduct, be sure of your facts, because the employee can challenge it.

The NES is a floor. Check:

• the award or enterprise agreement, which may set a longer notice period
• the employment contract, which may also set a longer period

If the contract gives more notice than the NES or award, follow the contract. If it says less, the higher minimum still applies.

Correct notice doesn't make a dismissal fair. An employee who has served the minimum employment period (12 months for a small business, 6 months otherwise) may be able to bring an unfair dismissal claim, so follow a fair process. Small businesses can use the Small Business Fair Dismissal Code.