Termination Considerations
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Unfortunately terminating employees is part of running a business. While the reasons for terminating an employee may vary, there are a few key points that you should always consider whilst deciding when and how to terminate an employee that is employed under the National Workplace Relations System.
You need to consider the employee’s terms and conditions of employment and abide by the:
National Employment Standards (NES)
The Fair Work Act
Any applicable Award or Registered Agreement, and
The employee’s Contract of Employment
Is your reason valid?
Any number of reasons for dismissal may be valid as long as they are not protected reasons under the Fair Work Act e.g. because of a workplace right, industrial action or discrimination. Examples of valis reasons include:
Performance – if the employee’s skill level or quality of work is below what is required for the job, they are not meeting the standards outlined in their employment contract due to a lack of care or diligence, they are incapable of completing the inherent requirements of their role.
Misconduct – when an employee behaves in a manner that is against company policy or contrary to the terms of their employment contract or is unlawful.
Redundancy – when an employer no longer needs an employee’s job to be done by anyone, or the employer becomes insolvent or bankrupt.
Have you talked to the employee and followed a fair process?
Awards and registered agreements require you to consult with the employee before any major workplace change, which includes ending their employment.
Before ending their employment, you need to follow a fair process e.g., if the issue is performance related you need to provide the employee with reasonable opportunity to improve and ensure they understand the consequences of failing to improve.
When ending employment, you should give them a reason why their employment is being terminated.
Have you provided the appropriate amount of notice?
How long the employee has been employed will affect the amount of notice you will need to provide. The amount of notice in the employee’s employment contract may be different from the relevant Award or NES, however, you must meet the minimum requirements of the relevant Award or NES no matter the notice period in the contract.
Have you put it in writing and kept records?
You should give the employee notification, in writing, of the last day of their employment which should include the appropriate amount of notice as per their contract, award or registered agreement.
You must keep records of the ex-employee’s employment, including time and payroll records for seven years.