If you are thinking about sacking an employee, the following are a few key issues to be considered:
- An employer may dismiss an employee for any reason provided that the minimum period of notice under the Fair Work Act 2009 (Cth) (FW Act), is provided. However, the dismissal is open to challenge under the unfair dismissal provisions (and other parts) of the FW Act if the termination was not based on a valid reason (eg, unsatisfactory performance, misconduct or changes to the operational requirements of the business etc) or was executed in a procedurally unjust manner. There are minimum qualifying periods that apply to employees who bring unfair dismissal claims and it is crucial that you are aware which ones apply to your employees.
- Instant dismissal (otherwise known as summary termination) may be justified in instances where the employee has engaged in serious misconduct. The FW Regulations set out some examples of serious misconduct, or these examples may otherwise be contained in your employment contracts.
- You may need to pay an employee severance pay, depending on their length of service and the reasons for dismissal. The FW Act sets out a scale of severance pay based upon length of service.
- The process that you follow for terminating an employee is crucial. Not only is the process relevant in the determination of an unfair dismissal claim, but also in respect of other instances like redundancy, where you may have the obligation to consult with the employee prior to making a position redundant.
- We regularly act for employers in unfair dismissal claims and understand how difficult it can be. Getting the termination process right in the first instance will never prevent an employee from bringing a claim, but it will place you in the best possible position to minimise your risk.
To reduce your risk exposure, reach out to us before firing an employee so we can provide you with practical and straight-shooting advice to protect your business.