How To Ensure Fair Termination Of Employees In Australia


All businesses have to deal with employee exits at some stage, through resignation, redundancy or termination. Loss of employees means loss of skills and experience associated with them. Every company needs to have a proper replacement or a position that can handle the job responsibilities adequately or else the loss of the employee can weaken a business drastically. Additionally, it gives companies a chance to change their internal culture and add different skills to their offerings.

Sometimes jobs become redundant owing to the loss of a contract from the company or the firm no longer needs to the position for their operations. The job nature could be replaced by technology too. Employees are entitled to redundancy benefits based on their length of the service period, agreement clauses or contract of employment.

An employee could resign without giving notice of their decision. However new enterprise agreements and contracts could have a minimum notice period for every employee. An employee has to serve a mandatory notice period, subject to some exceptions.

Ensuring Fair Termination of Employees

In the event that an employee is not meet the expectations of the decision-makers for a length of time, or fails to comply with company policies, or commits a grave offence according to company statutes, an employee can be dismissed from work with a valid reason. The reasons that need to be justified in terms of poor performance, gross misconduct or any changes in operational requirements. The company should adhere to norms stipulated by EI Fairwork Compliance and the norms mentioned by the government.

Dismissing an employee can be done through different approaches and as per differing requirements. One should understand the requirements to avoid the legal problems of any sort.

Additionally, there are certain taxation implications in case of termination of employees. The Australian Taxation Office (ATO) provides the necessary guidance to employees after they stop working in the office.

Adherence to Government clauses

The Fair Work Ombudsman’s website and the Small Business Fair Dismissal Code specify norms that ensure the Fair termination of any employee so that organizations are not faulted for unfair dismissals of any sort.

The Small Business Fair Dismissal Code, on the other hand, provides small businesses with a thorough process to dismiss an employee. The code is applicable to firms with more than 15 employees. Adherence to the Code will deem the dismissals to be fair by the Fair Work Commission.

Fair warning to terminate an employee

Every employee should be given an adequate chance to meet the standards and receive a fair hearing from employees. Your HR policy should stipulate clear procedures for all kinds of discipline-related expectations and grounds for dismissal.

Although the ‘three-strike policy’ is quite popular, it is not exactly a legal requirement. Employees should be given warnings for performance improvement and all the support required for training. One does not need to issue any kind of warning or notice in case of gross or serious misconduct. One should communicate well with the staff during the notice period.  Take help from managers to convey basic expectations.

Employees are required to clear the notice period or pay ‘payment instead of notice’ if they want to stop working immediately before the end of the notice period. An employee can be instantly dismissed in case of gross misconduct like theft, fraud, or assault, along with failure to comply with basic and reasonable instructions. One must offer a fair hearing about their circumstances. They are subject to instant dismissal with the adequate issue of final payments, for the pro-rata period.

Handling Exit Interviews

Get a view of how business operations could be improved from the employee and leave them on an amicable parting note if possible. The employee is entitled to termination payments as per law and should include unused holiday pay, wages, and pro-rata leave wages.

Refrain from unfair dismissal

Unfair dismissal could occur when the employer has no valid reason for dismissal or no prior warnings issued to improve performance.  Additionally, if the position is redundant and retrenches the employee, the employee cannot hire a new employee to perform similar duties.

Although not legally required, one can adhere to the Small Business Fair Dismissal Code Checklist at the Dept of Education, Employment and Workforce Relations as a guide to the right procedure. Keep completed copies as a record you’ve done the right thing.