It’s easy to get carried away and fire someone in the heat of the moment – particularly if you have a strained relationship with your employee. It’s important, however, that you stick to a well planned and clearly documented process to protect yourself against legal action. Believe it or not, there is a ‘right’ way to fire someone.

Step 1: Carefully Consider Why You Want to Terminate the Employment

Dismissing an employee for the right reason is important. Operational requirements (such as where a position has become redundant) or performance issues are both valid reasons for taking steps to fire a member of your staff. That said, these reasons wouldn’t protect you if you then take steps to end the employment in a way that is harsh, unjust or unreasonable. For example, even if your receptionist isn’t doing their job properly, it would be harsh to fire them without any warnings or without attempting to communicate about their underperformance.

The reason for the termination has significant implications for your potential liability under the Fair Work Act 2009 (Cth) – the national system of employment laws. If you fire an employee in a harsh, unjust or unreasonable way, or you fabricated the redundancy for the purpose of making the termination appear reasonable, you may face an “unfair dismissal” claim. Employees who earn under $138,900 can apply to the Fair Work Commission within 21 days of being fired, and ask for compensation or ask to get their job back.

You also cannot fire someone because of their race, sexual orientation, age or for temporarily taking time off work due to health issues (protected grounds). In these circumstances, an employee may lodge a “general protections” claim against you. Where this happens, the Fair Work Commission will investigate the reasons why you fired the employee. If you fired the employee for one of the protected grounds, you might have breached the Fair Work Act.

Of course, there may be situations where multiple circumstances exist, giving rise to the decision to terminate. For instance, if you fire someone while they are on sick leave, but the “substantive and operative” reason for the dismissal was their under-performance, you may not fall foul of the law. Serious misconduct, such as assault, is clearly more significant than turning up to work late, or other types of performance issues. Where serious misconduct exists, you can usually terminate the employee immediately.

Step 2: Issue Verbal Warnings

You should let your employee know why you are considering dismissing them – particularly in situations where the employee is underperforming. Put your concerns to the employee and provide them with a chance to respond.

Meet with the employee in private, and invite them to have a third party present during any meetings. It is a good idea to keep minutes and have all parties present sign these documents. Try to manage the employee’s performance and counsel them to improve by creating a performance plan. A good employer will also try to address the underlying cause of the issue – for example, where an employee with carer responsibilities is constantly late to work, introducing flexible work arrangements to accommodate their personal circumstances.

Step 3: Provide Written Warnings

After providing your employee with one or more verbal warnings, it is a good idea to also set out the issues in writing and to give your employee the opportunity to respond. This is an important record that can come in handy if your employee challenges the dismissal before the Fair Work Commission. It creates transparency around your position and demonstrates your efforts to engage with the employee. Continue counselling them to remedy your concerns, and carefully document all efforts to do so.

Step 4: Termination Notice

If warnings, counselling and performance management are unable to resolve the situation, any final decision to terminate should be set out in writing. The employment agreement, industrial award or the Act will contain the amount of notice you are required to provide.

Under the Fair Work Act, the following notice periods typically apply:

Length of Continuous Employment Minimum Notice
Less than a 1 year 1 week
Between 1 and 3 years 2 Weeks
Between 3 and 5 years 3 weeks
Over 5 years 4 weeks

Key Takeaways

Take your time before firing an employee. Ensure any purported redundancies are genuine, and that you properly manage performance issues, before issuing any termination notice. If you’re unsure about how the law might apply to you, have a chat with LegalVision’s experienced employment lawyers on 1300 544 755.

Amritha Thiyagarajan

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