Termination and exit compliance risk for Australian organisations

Ending employment is one of the highest risk moments in the employment lifecycle. Even when the reason for termination is valid, small missteps in process, timing or communication can create outsized legal and commercial consequences. This high-level checklist helps you spot early warning signs before moving ahead. If any of these questions create hesitation, that hesitation is the signal that further review may be needed.

Reason for termination

Is there a clear and lawful basis for ending employment? Termination decisions must be grounded in evidence, not assumptions. If the rationale is vague, inconsistent or poorly documented, exposure increases.

Process and procedural fairness

Has the employee been given an opportunity to respond? Procedural fairness requires clear communication of concerns and a genuine chance to be heard. If you are unsure whether this has occurred, revisit the process before taking action.

Notice and entitlements

Has notice or payment in lieu been calculated correctly? Are all accrued entitlements identified and paid? Errors here can turn straightforward exits into costly disputes.

Documentation

Is the termination decision properly documented? Has a compliant termination letter been issued? Documentation gaps are one of the most common grounds for challenge and regulatory scrutiny.

Timing and communication

Has the timing of the termination been considered carefully? Has communication been handled professionally and respectfully? Poorly managed communication can escalate risk and damage employee relations even when the decision is justified.

Risk awareness

Has potential unfair dismissal exposure been considered? Has adverse action risk been assessed? If these risks have not been actively checked, the organisation may be proceeding without a full understanding of its liability profile. 

Before you proceed

Risk increases significantly where a termination involves long serving employees, performance or conduct concerns, medical or personal circumstances or redundancy or restructure scenarios. These situations warrant additional scrutiny before action is taken. 

If you are unsure

If any of these questions raise uncertainty, that uncertainty is the risk signal. A structured review before proceeding can help avoid preventable disputes and protect business outcomes.

If you would like support assessing termination or exit risk in your organisation, get in touch our team is here to help.

General information only. Not legal advice.