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Summary dismissal: what payments are required?

Summary dismissal ends employment immediately, but understanding which payments and entitlements still apply is essential for employers.

11 Feb 2026

Summary dismissal is essentially an ‘instant’ dismissal without notice. How should employers handle this situation?

Let’s consider an example: a company terminates an employee who was caught stealing company property. After an investigation by management, the employee is summarily dismissed.

As the termination was due to serious misconduct, the employer is unsure what entitlements apply. The company’s enterprise agreement states that employees are to be paid any accrued annual leave on termination, other than for serious misconduct. The agreement doesn’t refer to what notice period is required when a dismissal is due to serious misconduct.

Notice of termination

Under the FWAct (s123), an employer is not required to give the appropriate period of notice of termination under the Act where an employee is dismissed for serious misconduct.

Although not specifically addressed by the Act, an employer is required to pay up until the time of dismissal, unless there is a provision to the contrary in the applicable modern award or enterprise agreement. 

Termination pay – annual leave

In the above scenario, the employee would be entitled to receive payment for their accrued annual leave on termination of employment, despite the terms of the enterprise agreement.

The FWAct (s90(2)) states that if when employment ends, an employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been paid to the employee had the employee taken that period of leave.

A term in an enterprise agreement that contravenes a provision of the National Employment Standards, such as excluding payment of annual leave on termination, would have no effect.

The terms of the FWAct (s56) override the terms of a modern award or enterprise agreement where there is an inconsistency.

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Summary Dismissal Letter

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