If you are an employer and seeking to dismiss an employee, you must do so fairly and lawfully. Not only is this important for your business’ reputation, but it is vital to ensure you avoid unfair dismissal claims that are both costly and an unnecessary drain on your time.
Dismissal
In order to terminate someone’s employment, you must have a valid reason for doing so.
Normally, this relates to the employee’s conduct, capacity or performance. It also applies in cases of genuine redundancy.
Conduct
If your employee’s behaviour amounts to misconduct, you may validly terminate their employment. This is conduct that is inappropriate in your workplace environment or in breach of your employee’s employment contract.
Examples of employee behaviour that sufficiently satisfy misconduct are:
- Theft
- Fraud
- Assault and fighting
- Intoxication at work
- Impacting the safety and welfare of other employees
- Dishonesty
- Displaying poor behaviour and attitude towards other employees
In exceptional circumstances, you may be able to validly dismiss an employee for behaviour they have engaged in outside of work. However, you must be able to prove that their behaviour seriously damaged their employment relationship with you, and your interests as an employer.
However, it is imperative to note that each individual situation is different and will be treated as such. Legal advice can help you determine whether you may fairly dismiss an employee for misconduct.
Capacity
You may validly terminate an employee if they are unable to perform the ‘inherent requirements’ of their role. That is, if the employee cannot do the work they were employed to do.
Examples of incapacity include:
- Medical reasons
- Loss of security clearance
However, employers must note that this area of the law is very complex. In certain circumstances, the law will protect employees from being dismissed over medical reasons. If you are facing a situation of this kind, it is best to seek advice before taking action.
Performance
Generally, you can validly terminate an employee if they have been underperforming. This is when their performance in their job has not been to a satisfactory standard.
However, it is unlawful to do this in circumstances that are ‘unfair’, and the Fair Work Commission will generally require employers to provide a warning to the employee in question. Furthermore, there must be enough time for the employee to respond to the warning and be given a chance to improve their job performance before final dismissal.
It is therefore important to have a robust termination process in place to ensure compliance with the fairness requirements. It is also important that the process is suitable for the business, as standards for proving fairness may vary depending on the size of the employer.
Genuine Redundancy
By making an employee redundant, you will not be dismissing them unfairly, provided the redundancy is genuine.
For this to be the case, you must:
- No longer require the employee’s job to be performed by anyone due to operational changes in your workplace; and
- Discuss with the employee about their position becoming redundant and try to mitigate the effect on them through alternate arrangements.
Additionally, it must be impossible for you to find the employee another position within your business or associated businesses, taking into account their skills and qualifications.
As an employer, you should know that an employee may file an unfair dismissal claim against you if they believe you have not validly terminated their employment. If you are unsure about the circumstances surrounding employee dismissal, we can provide advice and assistance to ensure you follow the correct legal processes when terminating an employee.
Notice
In most circumstances, when you are terminating an employee, you must give them a minimum notice period that they are going to be dismissed. The notice period’s length of time depends on how long the employee has been working for you. These are made compulsory by the National Employment Standards.
Outlined below are the relevant notice periods required and their respective employment periods.
| Employment Period | Minimum Notice Period |
| Less than 1 year | 1 week |
| 1 – 3 years | 2 weeks |
| 3 – 5 years | 3 weeks |
| Over 5 years | 4 weeks |
However, you should be aware that if an employee’s contract or agreement stipulates a longer notice period is required in the event of termination, the contract period applies.
Additionally, employees aged above 45 who have worked for at least two years are entitled to an extra week’s notice.
You must give written notice to your employee of their last day of employment, by either delivering it to them personally or to their last-known address.
No notice required
In special circumstances, employers are not required to give some employees a notice period.
These employees are:
- Casual
- Employed on a fixed term contract
- Employed seasonally
- Dismissed due to serious misconduct (such as theft, fraud or assault)
- Daily hire in the building and construction or meat industry
Final Pay
It is important for you know what your employees are entitled to in their final pay. You must pay your employees any outstanding wages for hours they have worked, annual leave and, if applicable, long service leave. You do not need to pay out sick or carer’s leave when employment is terminated.
After notice is given, you may direct the employee not to work through their notice period. In that case, you must pay them out for this period, known as payment in lieu of notice. The amount you pay to your employee must be the same as if the employee had continued to work until the end of their notice period.
Unlawful Termination
As an employer, it is important you are aware of the legal requirements before terminating someone’s employment. You may not dismiss someone from their job due to their:
- Temporary absence from work due to illness or injury
- Membership or non-membership of a trade union, or partaking in trade union activities
- Filing a complaint or partaking in proceedings against you as an employer
- Race, sex, sexual orientation, age, disability, marital status, family/carer’s responsibilities, pregnancy, religion, political opinion or social origin
- Absence from work due to maternity or parental leave
- Temporary absence from work due to voluntary emergency work.
If someone believes their employment has been terminated unlawfully, they may lodge an application against you with the Fair Work Commission.
J2 Legal can help advise you through the often difficult process of ending someone’s employment. Please contact our office for any further information or enquiries.
DISCLAIMER
The information contained in this article is general in nature and does not constitute formal legal advice. Proper advice should always be sought for your individual needs and circumstances and J2 Legal disclaims all responsibility for the result of any reliance on the information herein.