The main objective of this study was to evaluate the residual strength of fibre reinforced metal laminates (FRMLs) and polymer matrix composite laminates (PMCLs) with a circular hole or sharp notch using an effective crack growth model (ECGM). Damage is assumed to initiate when the local normal stress at the hole edge/notch tip reaches the tensile strength or yield strength of the composite and metal layers, respectively. The damage in the constituent materials was modelled by fictitious cracks with cohesive stress acting on the crack surfaces, and the damage growth was simulated by extension of the fictitious cracks step by step and reduction of the cohesive stress with crack opening. The apparent fracture energy of composite layers and fracture toughness of metal layers were used to define the relationships between the tensile/yield strength and the critical crack opening. Based on the global equilibrium, an iterative technique was developed to evaluate the applied load required to produce the damage growth. The residual strength of notched composite laminates was defined by instability of the applied load with damage growth. The effect of hole/notch size on the residual strength was studied and the stress redistribution with damage growth was discussed. The residual strength simulated from ECGM correlated well with experimental data in the open literature.