Termination of employment

If you employ workers, there will come a time when you face a termination of employment situation.

It would be fair to state that terminating the employment of a worker is something no employer enjoys.  But there are times when dismissing a member of your team is necessary:

• consistently poor work standards;
• lack of productivity;
• excessive absenteeism;
• bullying and harassment;
• willful breach of company rules;
• compromising the health and safety of co-workers.

All of these are reasons that might influence an employer to consider letting someone go.

Grounds for termination of employment

If you need to dismiss a worker, you must have a valid reason, such as:

•  poor performance
•  conduct/behaviour concerns (including serious misconduct)
•  the position no longer being required (when the termination is known as “redundancy”)

Preparation for termination of employment

While every termination has a different set of circumstances, there are a number of preparation steps an employer should follow. These include:

•  Identifying the core issue (or issues).
• Determining how the concern is impacting on the business or co-workers. Is this at the stage where this can no longer continue?
• Check for any previous warnings or records of concerns being raised with the employee.
• Understand your notice of termination obligations under the employee’s Contract of Employment and the National Employment Standards (NES).
• For small business owners, complete and retain the Small Business Fair Dismissal Code checklist.

The key in your preparation stage is to determine whether a termination outcome might be appropriate. Failing to have the correct reasons or evidence for termination is a surefire way to end up on the wrong end of an unfair dismissal or unlawful termination claim.

Take the time to make a smart, informed and rational decision on whether a termination is the fair and right course of action, given the circumstances.

Termination of employment process

Should you determine a dismissal may be appropriate, the following steps are typical in a termination process:

1. Prepare. This includes getting yourself in the right headspace for an objective discussion, a written list of your concerns and any other supporting evidence you feel you might refer to during your meeting. Consider having an impartial third party present to witness events and take notes.
   
2. Invite the employee to a meeting to discuss your concerns. Include the offer of a support person.
   
3. Define your concerns to the employee (with examples of demonstrated performance or behaviour.)
   
4. Explain how the concern is impacting on the business or co-workers.
   
5. Offer the employee the opportunity to respond to your concerns.
   
6. Consider the employee’s response in light of your original concerns. It may be appropriate to take a break in proceedings while you consider this.
   
7. Hand down your decision.

Does termination have to be provided in writing? 

To end an employee’s employment, an employer should provide the worker written notice of their last day of employment. Some exceptions apply, such as when a notice period does not apply to an employee but as a rule, notification to a worker of anything significant relating to their employment should be provided in writing.

Consequences of getting termination of employment wrong

A dismissal should not be harsh, unjust, unreasonable or based on an unlawful or discriminatory reason. Should it be determined it is, you’re walking into a situation likely to cost you time, money and drama…and no employer wants to face a claim for unfair dismissal or unlawful termination.

Compensation for unfair dismissal is capped at 26 weeks’ wages of the annual wage of the employee and, in the case of a general protections (aka unlawful termination) remedy, compensation is uncapped. In general protections matters, the court may also make orders compensating an employee for future economic loss, hurt and humiliation, pain and suffering, and general damages.

Moral of this story? Get it right.

How to get it right

Whatever the circumstances, it’s important to follow the lawful rules about dismissal, notice periods and final pay.

And often, it’s smarter to find someone with genuine HR experience to help you navigate your way through the termination minefield so you tick all the boxes than trying to do everything yourself…you only get one chance to do this right.

Whether its making sure your legal grounds for termination is sound, getting your termination of employment checklist and termination of employment letter in place, understanding minimum notice periods, figuring out whether commissions are owed after termination, researching timeframes for payment of final entitlements…there’s a lot you need to consider.

And this all takes up your valuable time.

We can make sure you get it right

Wouldn’t it be good to be confident you have your boxes checked?

Give Bare Bones Consulting a call on 07 5576 4693 or contact us through our website. We’re an experienced HR consultancy servicing small business owners Australia wide.

We’re box checkers supreme and happy to help out with all things HR to make life a little easier for you.