How to terminate a person’s employment
Termination - sometimes referred to as ‘firing’ or ‘sacking’ - is the act of ending a contract of employment. It can be an unpleasant task for a manager, compounded by the necessity of complying with relevant legislation (in Australia, The Industrial Relations Act 1999). That Act aims to balance fairness to employees with the needs of employers to dismiss employees when there is a good reason. Here are some key considerations to ensure the process is handled competently...
1. Make sure of your facts beforehand.
Termination can no longer be a matter of managerial whim. You must do your homework and make sure your actions satisfy the relevant legislative requirements of the day. In the Australian context, a person’s employment may be terminated:
- by notice under an award, agreement, or other contractual provision. Adequate notice must be given: for example, 3-5 years continuous service requires 3 weeks' notice.
- by a contractual provision being fulfilled
- as a consequence of other events - death of employee, closure of business
- in cases of misconduct - assault, drugs, dishonesty, fraud, insubordination, etc.
- through redundancy - usually retrenchment of a number of staff
- by resignation.
2. Ensure procedural fairness.
It is no longer sufficient to dismiss an employee with only the requisite period of notice. You must make sure that the employee is:
- given a valid reason for the dismissal
- notified of the reason
- given a chance to reply to allegations
- warned previously in writing about his or her conduct
- given another opportunity to meet stated performance standards.
Where an applicant’s termination is deemed to be unfair, the Courts may order reinstatement and payment of lost wages or other compensation.
3. Guard against unfair and unlawful dismissal.
In Australia, within 21 days of a dismissal, an employee may apply to the Australian Industrial Relations Commission alleging the dismissal was harsh, unjust, or unreasonable. The Commission will first attempt to conciliate the matter and the result of those efforts could lead to arbitration or a hearing. Generally, where unfairness is alleged, a claim will be heard by the Commission; the case for alleged unlawful dismissal will be heard in a Court of competent jurisdiction. Unlawful termination may occur in four different situations:
- Temporary absence due to illness or injury; union membership or non-membership; acting or having acted as an employee representative; filing a complaint or participating in proceedings against the employer involving an illegal violation of laws or regulations; discriminatory reasons; refusal to negotiate, sign, or otherwise be involved in a certified workplace agreement; and absence due to taking parental or maternity leave.
- Insufficient notice (or payment in lieu)
- Failure by the employer to comply with the Commission’s order concerning severance allowance
- Where the employer dismisses 15 or more employees on the grounds of retrenchment or redundancy, and fails to notify Centrelink of the reasons, the number and categories of employees, and the period over which the termination will take place.
