As part of the usual employment life cycle, staff come and go. The manner in which they leave however is something to carefully consider. Sometimes employees voluntarily resign to seek pastures new, but what if you, as the business, are forced to terminate their employment? Here are some things to look out for.
Can we terminate for anything?
No – there needs to be a genuine reason for termination. This could be redundancy, poor performance, misconduct or incapacity*.
*Incapacity does not include temporary illness or injury. Contact the PIAA HR Advisory Service for more information on this.
We have a genuine reason – can we terminate immediately?
No – there are two major considerations to make here;
- Procedural fairness and,
- Notice periods.
Procedural Fairness: The most critical component of procedural fairness is giving the employee a chance to respond. For example, if they are exhibiting poor performance they should be adequately counselled about those performance issues and provided with warnings (verbal or written). Similarly, if an employee has committed an act of serious misconduct – they still need to be given a chance to respond. In a 2015 case before the Fair Work Commission, an employee who was dismissed for downloading company files without permission was afforded compensation as the FWC ruled there was a lack of procedural fairness. Even though there was a valid reason for termination, the employee was not given a chance to respond to the allegations. This highlights the need to exhibit procedural fairness in all instances involving termination.
Another important element of procedural fairness is allowing the employee to bring a support person in any meeting where termination is confirmed. The support person can not participate in the meeting – rather they are there purely to provide emotional support to the employee and take notes if necessary.
Finally, small business employers (less than 15 employees) should use the Small Business Fair Dismissal Code when terminating the employment of a staff member. Contact the PIAA HR Advisory Service for a copy of the Code.
Notice Periods: The National Employment Standards provides minimum notice periods that apply when an employee has their employment terminated. This is as follows;
|Length of service.||Notice period required.|
|Less than 12 months.||1 week.|
|More than 1 year, but less than 3 years.||2 weeks.|
|More than 3 years, but less than 5 years.||3 weeks.|
|More than 5 years.||4 weeks.|
If an employee is over the age of 45 and has more than 2 years of service, they are entitled to an additional weeks notice.
Notice can either be worked by the employee or paid in lieu. If paying notice in lieu, the employee must receive full pay (exactly what they would have earned if they had worked the notice period including penalty rates/loadings).
I’m considering terminating someones employment – where do I go for help?
Contact the PIAA HR Service on 1800 835 167.