Sometimes, employers find themselves needing to ‘let someone go’. Their performance may not be up to scratch, there may be an instance of misconduct or misbehaviour, or your business’ needs may have changed since the employee in question came on board. But before you start directing them to ‘pack up their things’, there are few essential questions every employer should ask themselves before terminating an employee.
1. Is this a Termination, or a Redundancy?
A redundancy occurs when the relevant employees work will not be done by anyone. This often occurs as a result of a downsize, outsourcing, or change in direction of the employer entity. If this is the case, the cessation of the employment relationship will be a redundancy. You should check the Fair Work Act, any applicable industry award and the employment contract to understand your obligations with respect to, in particular, redundancy pay.
2. If a Termination, Have I Complied with the Fair Work Act?
Employers in Australia cannot terminate employment willy nilly (yes, that is the technical term). In most cases, being except in the event of serious misconduct, an employer must:
- Duly warn the employee;
- Identify the issues;
- Make it clear what the employer expects from the employee to retain their role; and
- When that improvement is expected by and will be reviewed.
There are other legislative requirements that apply in the event of termination, including provision of notice.
3. Are Their Grounds for the Employee to Bring a Claim for Unfair Dismissal?
Employees can bring a claim for unfair dismissal in the following circumstances:
- He or she has been employed for more than 12 months;
- He or she earns less than the applicable threshold (currently $133,000); and
- If their dismissal could be considered ‘harsh, unjust or unreasonable’.
Employers should then consider the potential ramifications of an employee making such an application, not just in terms of monetary awards or orders for reinstatement, but also the time and cost involved in defending such an application.
4. Is the Ground of Termination Lawful?
We are lucky enough to have our rights protected in Australia, and in the employment space, they extend to the following:
- Rights not to be discriminated against;
- Rights to be afforded leave and other entitlements as set out in the Fair Work Act and any applicable award; and
- Rights to join unions, among others.
If the ground of termination arises because of an employee exercising their rights, and/or could be considered discriminatory, you could be liable for a general protections claim if you proceed.
5. What Paperwork is Required?
You will usually have to issue a formal termination/redundancy notice, and provide proof of payment of the termination payment. You should maintain proper written records of the termination documents (and any written warnings related to the termination or records of relevant meetings) in the employee’s file.
Questions about terminating an employee’s employment? Ask out employment lawyers on 1300 544 755.