Managing human resources in any enterprise can be challenging whether it be drafting recruitment policies or terminating employees. Retaining a poor-performing employee, however, can be damaging to both your business and the employee’s professional growth. Australia’s Fair Work Act 2009 provides protections for employees that require you, the employer, to follow the appropriate procedure to avoid any claims of unlawful termination or unfair dismissal. Below, we set out the appropriate process to terminate an employee for poor performance or serious misconduct.

Process to Termination: Poor Performance

The First Meeting

If you’re looking to terminate someone’s employment due to poor performance, then you should first give them a chance to improve their performance to an acceptable level. When managing your employee’s performance, then you should clearly outline your expectations and the improvements they need to make. Ensure you keep written records of correspondence and any warnings you gave to the employee.

When Performance Doesn’t Improve

If your employee’s performance hasn’t improved, you’re likely considering terminating employment. The number of opportunities you offer a staff member is at the discretion of your enterprise or HR department. From here, you’ll need to prepare a Letter of Termination of Employment. This letter should clearly set out when the relationship ends, the reason you are terminating the employment, and the steps taken to avoid termination (i.e. performance management).

Notice of Termination

You are typically required to provide your employee with four weeks or more notice that you are terminating their employment. An alternative is payment in lieu of notice.

Process to Termination: Serious Misconduct

If an employee has intentionally caused risk to the health and/or safety of your staff or customers or stolen from your enterprise, you may be able to summarily dismiss them. If you do choose to dismiss the staff member without notice, you should understand how serious the ramifications can be for your enterprise if it’s found to be unfair.

There are two sides to every story, and you should consider gathering all the available evidence, including from the staff member alleged to have committed serious misconduct. You can minimise the risk to your business by allowing the employee to bring a support person with them to a formal meeting. This could be a staff member from your HR department, representative, friend or family member. You can also draft a letter of termination that sets out the reasons why your enterprise is dismissing the staff member, the steps you took before deciding to terminate their employment and when the termination date takes effect.

Unlawful Termination

Even if you correctly follow the process of termination outlined above, the reason for dismissal must be valid and not contravene the general employment protections. As set out in the Fair Work Act 2009, you are generally prohibited, with some exceptions, from terminating employment on the following grounds:

  • The employee’s race, colour, sex, sexual orientation, age, disability, marital status, responsibility as a carer, pregnancy, religion, political opinion, national extraction, or social origin;
  • Temporary absence from work due to illness or injury;
  • Membership, or non-membership of a trade union;
  • Seeking to, or acting as, a representative of employees;
  • Filing a complaint, or participating in proceedings, against an employer involving alleged violation of laws, regulations or other requirements;
  • Absence from work during maternity leave or other parental leave; and
  • Temporary absence from work for the purpose of engaging in a voluntary emergency management activity.

Key Takeaways

Unfortunately, even the best recruitment processes can’t ensure your enterprise hires the ideal candidate every time, and sometimes, the employment relationship simply runs its course. If the time comes where you need to terminate their employment you should ensure that you are dismissing them for a lawful reason and, offer the employee an opportunity to address your concerns about performance. To best protect yourself and your business, keep comprehensive records of the steps you took during the termination process. Questions? Get in touch with our employment lawyers on 1300 544 755.

Thomas Richman

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