Australia relies on a flexible labour market to promote worker transitions from declining firms and sector to expanding ones, and, consequently, government actions to prevent dismissals are relatively limited. There are few legislative restrictions on employers wishing to retrench employees, except with respect to unfair dismissals, and there is no short-time work scheme to prevent layoffs due to cyclical downturns. When workers are displaced, targeted assistance is restricted to sectors covered by structural adjustment programmes, thus reaching a small minority of displaced workers. This may be particularly damaging for the re-employment chances of older and less-educated displaced workers not covered by these programmes. Early intervention by the public authorities to provide assistance to workers at risk of being retrenched requires early notification of redundancies. However, in Australia, the statutory notification period is low relative to most other OECD countries for individual dismissals and there is there is no legislated additional notification period in case of mass layoffs. There is also scope to improve the co-ordination of assistance measures provided by the employer, the federal and state governments. Australia is quite advanced in providing recognition of prior learning to displaced workers covered by structural adjustment programmes, but there is room to increase investment in effective training for displaced workers. More generally, the coverage of displaced workers benefiting from these programmes remains limited. A more systematic approach should be taken to providing specialised intensive employment services based on an assessment of the risk of displaced workers not successfully transitioning into a sustainable new job.