Termination of Employment
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Termination of Employment, including Fair Work Commission and Court Representation
An employer can terminate the employment of an employee for reasons relating to the employee’s misconduct or underperformance and sometimes where the employee is not a good fit for the business (which should usually be assessed during the employee’s probation period). Whether the termination is lawful depends on many factors. Importantly, it is generally unlawful to terminate the employment of an employee for a discriminatory reason, such as due to the person’s disability or race.
The steps that an employer must take to lawfully terminate an employee depends on the size of the business, the employee’s conduct that has led to the termination and the length of time the employee has been employed in the business. All employees in the ACT and many throughout the rest of Australia are covered by the Fair Work Act 2009 (Cth), which means that many employers need to be mindful of the employee’s protection from unfair dismissal and the general protections under the Fair Work Act before dismissing an employee. The factors are various and often determined on a case by case basis, so it is advisable to seek legal advice before progressing to termination.
Not always. If the employee has engaged in serious misconduct, the employer may dismiss the employee without notice. Serious misconduct is defined to include conduct that causes serious and imminent risk to the health or safety of a person or the reputation, viability or profitability of the employer’s business; theft, fraud, assault or sexual harassment in the course of the employee’s employment; being intoxicated at work; and refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.
In other less serious cases of misconduct or where the employee is dismissed due to underperformance, the employer must give notice of termination.
The employer must pay the employee wages and superannuation up until the end of their notice period, or they may pay the employee pay in lieu of notice. This includes wages and superannuation. In addition to this, the employer must pay the employee any accrued but unused employee entitlements, such as annual leave and long service leave. Personal/carers leave (often referred to as sick leave) does not get paid out on termination. If the termination is due to redundancy, the employer may also have to pay the employee redundancy pay.
Yes, if the employee has engaged in serious misconduct, the employer may dismiss the employee without notice. Serious misconduct is defined to include conduct that causes serious and imminent risk to the health or safety of a person or the reputation, viability or profitability of the employer’s business; theft, fraud, assault or sexual harassment in the course of the employee’s employment; being intoxicated at work; and refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.
Before taking this step, unless the employee is still within their statutory probation period, in most cases the employer should undertake an investigation to determine whether the conduct occurred.
Redundancy is a type of termination of employment, but one which is necessitated because the employer no longer requires the particular job to be done by anyone. Other forms of termination are based on the employee not being suitable for the role for a variety of reasons, but the employer is free to recruit another person to fill that role following the termination of the first employee’s employment.
Any employee covered by the Fair Work Act 2009 (Cth) and not in their statutory probation period is protected from unfair dismissal. For these employees, the employer should ensure that prior to dismissing an employee, they engage in a process that affords the employee with procedural fairness. This requires the employer to provide written notice to the employee about the issues that may lead to termination and a proper opportunity to respond, with a support person if they choose. If the issue is misconduct, the employer must ensure they have ample evidence to prove that the misconduct occurred and that it was serious enough to justify dismissal. If the issue is underperformance, the employer should only terminate an employee’s employment if, after being given ample time and information about the underperformance, plus proper support to improve, the employee’s performance has not improved.
There are many things that can go wrong when terminating employment, and an employment lawyer can advise the employer about the employee’s rights and the employer’s responsibilities, as well as the proper process for managing the lead up to the termination. This is why, if possible, employers should seek advice as early as possible prior to dismissing an employee.
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