Employment separation certificate: an employers guide

When an employee leaves the company, certain procedures must be followed to ensure the business remains compliant and the employee is able to claim the support they’re entitled to. One of these procedures relates to the employment separation certificate, which is issued by Services Australia. 

Careerminds has prepared a plain English guide for employers to ensure the company brand is protected and the business remains compliant when employees exit. 

The employment separation certificate, also known as Form SU001, enables employees to access Centrelink payments following the termination of employment or a reduction in hours. It contains the information that Centrelink needs to assess eligibility and provide income support. It is a legal document, used to confirm that the individual is unemployed, and it guides them in identifying the right pay amount and when payment should be received.  

The form also provides proof of employment, acts as a record of termination, can be used by new employers as evidence of previous work, and may be assessed by lenders as evidence of credit-worthiness.

In the case of disputes, such as an employee disputing their termination or the way it was conducted, the employment separation certificate can be used to support a claim for unfair dismissal.

The ESC can be used when employees leave for any reason, including shortage of work, performance issues, contract completion, redundancy, misconduct, or voluntary separation. 

Form SU001 employment separation certificate is a short form requiring basic employment details, including:

• Employee personal details (name, date of birth, and address).
• Employer details (name, address, phone number, contact person, and Australian Business Number).
• Start and end dates of employment. 
• Reason for leaving (further details must be given in the case of unsatisfactory performance, misconduct, and voluntary termination).
• Final payment (including leave and redundancy payments).
• Confirmation of whether unused leave entitlement or final gross redundancy payment was made or will be made (and details, if so, including gross weekly wages).
• Signature of employer and date.

The form can be submitted online or printed via the Services Australia website. 

A separation certificate is not needed every time an employee leaves the business. However, the employer must complete one if requested, and submit it within 14 days of the request. It is the employer’s responsibility to ensure this deadline is met. The request may come from the employee, Services Australia, or Centrelink. 

As the form affects an individual’s right to income support payments, it may also be needed when an employee reduces their working hours.

One form is needed for each departing employee so, in the case of large-scale redundancies, multiple forms will be required. 

The quickest way to submit the SU001 employment separation certificate is online, but paper forms sent by fax are also accepted. Alternatively, the form can be given to the employee to submit. Either way, the employee should be given a copy for their own records. 

Online submissions can be made through Services Australia Business Hub and should be based on accurate payroll records. 

Casual employees have the same rights as permanent staff when it comes to employment separation certificates, as they require the same documentation to access income support payments. 

Similarly, if an employee transitions from full time to casual work, or reduces their hours, they are entitled to an employment separation certificate to enable them to access Centrelink support. 

Making redundancies involves challenges for both the employer and the employee. Ease the pressure for everyone by following this simple workflow for exiting employees. 

For redundancies in Australia to be legally compliant, they need to be genuine – that is to say, the job doesn’t need to be done by anyone anymore. If the role is genuinely eliminated, explore alternatives such as redeployment elsewhere in the business before terminating employees. 

Working with an outplacement partner can ensure the redundancy process runs smoothly. The objective of outplacement is to support affected employees back into meaningful work through targeted advice and guidance, but it has benefits for the business as well. 

Outplacement protects your employer brand, helping future attraction and retention efforts, whilst also ensuring redundancy processes remain compliant. Additionally, this employee-focused service helps to maintain morale and productivity among retained workers and reduces costs associated with severance payments and unfair dismissal claims. 

Genuine redundancies must involve a consultation period, but they are more than just a legal requirement as they are also best practice for businesses that want to position themselves as a people-first employer.

During the consultations, employees should be advised about support they will receive during the transition, including outplacement and an employment separation certificate.

Redundancy payments are an integral part of the employment separation certificate, so accuracy is critical. Account for regular pay, statutory or enhanced redundancy payments, golden handshakes, and scheduled or unused leave. 

It isn’t necessary to wait for a request to issue an employment separation certificate. Building it into your process means that employees will be able to access income support as soon as possible, plus it prevents ad hoc requests that disrupt day-to-day business operations. 

Submit the completed form to Services Australia and remember to issue a copy for the departing employee to keep for their own records. 

The employee can ask their employer directly for a separation certificate, or the request may come from Centrelink or Services Australia. Whoever the request comes from, it must be completed within 14 days. The employer does not need to wait for a request to issue a Form SU001, as they can issue it proactively. 

A Centrelink separation certificate is not necessarily needed if an employee resigns. For example, if they are transitioning directly into a new role, without the need to claim income support payments, it may not be needed. It is primarily used to enable the employee to access Centrelink payments.

It is important to note that, although a form may not be requested, the employer is legally obliged to provide one if a request is received.  

An employment separation certificate is a simple black and white form, with tick boxes and space for additional information, issued by Services Australia. You can see for SU001 here. 

An employee can get an employment separation certificate simply by asking their employer for one – it is sensible to put such requests in writing. An employer can get the form by downloading it from the Services Australia website. 

The SU001 cannot be issued through payroll software such as Xero. If you submit payroll information using Single Touch Payroll, certain information will automatically be sent, but the employment separation certificate must be completed separately. 

The employment separation certificate is a federal requirement, so the rules and processes are the same wherever your business is based. There are no state-specific variants. 

No, employment separation certificates and references are not the same thing. The ESC is used to assess eligibility for income support payments and contains basic information such as employer and employee details, reason for separation, and payment details. 

A reference is used to show potential new employers that an employee is capable of fulfilling the requirements of the job they’re applying for; they usually act as a recommendation and contain more subjective detail about skills and abilities. 

When making redundancies, outplacement and structured offboarding processes ensure that exits are legally compliant and protect the employer brand. Employment separation certificates are one way of ensuring that reductions in force are delivered smoothly, compliantly, and with the interests of the employee firmly in mind. 

If your business is contemplating redundancies, speak to Careerminds, the outplacement specialists, ahead of time. We’ll be by your side to help your business navigate the challenges of restructures and downsizing so that your business emerges unscathed at the end.