Dismissing an employee or being dismissed can be a complicated time for all involved. Whether you are considering this process or have already begun it, our Employment Termination Checklist may be helpful in ensuring you have met all the legal requirements and have as smooth a transition as possible.
Make sure the employee is being terminated for a valid reason
In Australia there are laws governing the reasons an employee may be terminated. The lawful reasons an employee may be terminated are:
- Redundancy – the position is no longer required due to lack of demand, technological advances or the insolvency of the employer;
- Lack of Competency – the employee’s work has not been adequate;
- Serious Misconduct – the employee has engaged in theft, assault, fraud or other conduct that puts the health and safety of other employees at risk or is inconsistent with his or her continued employment; or
- Mutual agreement between the employee and employer.
There are many reasons that would be unlawful to terminate an employee for. These include:
- Because of the employee’s gender, marital status, sexual orientation race, age, colour, pregnancy. Termination of employment for these reasons could potentially lead to a discrimination claim;
- Because the employee has exercised a protected employment right, like:
- taking sick leave
- taking parental leave
- requesting flexible working arrangements
- filing a Worker’s Compensation Claim
- making a complaint or enquiry regarding their employment, or
- taking part in an Industrial Action against the employer.
Make sure that the employee has been fairly dealt with
The employee must be fairly dealt with by the employer throughout the termination process. If the employer does not exercise procedural fairness they will leave themselves at risk of the employee making an Unfair Dismissal or General Protections claim through the Fair Work Commission.
Please note that there are certain circumstances where you cannot claim through the Fair Work Commission, if you work for State government or are subject to employment contracts within high income threshold.
To avoid this, the employer must:
- Warn the employee of any concerns the employer has about his or her performance before deciding to terminate the employee’s employment;
- Give the employee adequate opportunity to respond to these concerns;
- Thoughtfully consider whether there are alternatives to dismissal, such as training or redeployment; and
- Grant any reasonable requests by the employee to have a support person present at discussions regarding the employee’s ongoing employment.
In all circumstances the dismissal must not be able to be construed as harsh, just or unreasonable.
Small Businesses (those employing less than 15 people) can seek to avoid Unfair Dismissal claims by following the Small Business Fair Dismissal Code Checklist.
Make sure the employee has been given adequate notice
Once the employer has decided to terminate the employee they must give notice as to when the termination will take effect. Notice MUST be given in writing to the employee or sent to their last known address. The notice period is the time between when notice is given and the last day of the employment. The length of notice required will be determined by either the provisions of the applicable employment contract, or otherwise as set out by the National Employment Standards, as set out below.
How much notice is required?
Period of continuous service
Minimum notice period
|1 year or less||1 week|
|More than 1 year – 3 years||2 weeks|
|More than 3 years – 5 years||3 weeks|
|More than 5 years||4 weeks|
|Over 45 years old & worked for at least 2 years||+ 1 week|
There are some specific circumstances where no notice is required. These include:
- Where an employee is employed for a specified period of time, for a specified task, or for the duration of a specified season;
- Where an employee is terminated because of serious misconduct (for example, an employee who has, in the course of their employment, engaged in theft, fraud or assault);
- Where an employee is a casual employee;
- Where an employee (other than an apprentice) is limited to the duration of the training arrangement; and
- Where (in some circumstances) the employee is a daily or weekly hire employee.
Once notice has been given the employee can serve the notice period or be “paid out” for the notice period, at the discretion of the employer. If they are paid out they must receive their normal pay rate for their normal hours for the designated notice period in lieu of serving their notice period in the workplace.
Make sure the employee has received the correct amount of pay
On termination, many employees are entitled to a lump sum payout made up of outstanding wages, accrued annual leave, long service leave (where applicable) and/or redundancy pay. The amount required to be paid depends on the individual situation and the employer is required to ensure they fulfil their obligations in this regard.