Frequently Asked Questions – Terminations of employment

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Does annual leave and loading apply on termination?

Under the Vehicle (Print MA 000089) and Clerks (Print MA 000002) modern awards, annual leave and loading must be paid to weekly hired (but not casual) employees with one qualification!

If the employee has a valid written contract with words to the effect that the annual leave loading is included in the weekly over award payment, and the over award is sufficient to compensate that amount, then loading is not paid on termination or during annual eave (avoids double payment of loading.)

What is the minimum notice period that applies to full and part time weekly employees receiving leave entitlements? And when does redundancy apply under the Fair Work Act 2009?

Click here to get the minimum notice depending on length of service and age, together with the small business exemption (< 15 employees) from redundancy. Remember that no such exemption applies for the minimum notice period.

Is a casual employee entitled to only one hour’s notice of termination in all circumstances?

With “some” qualification, only one hour’s notice applies. In the Clerks (but not Vehicle) award, casual employment is for a minimum of 3 hours per engagement so notice in that case, may be interpreted as 3 hours.

Where an employee has been offered 6 months regular and systematic hours as a casual, then given the election to work full time/part time, and that employee remains as casual, the casual period of notice under the Vehicle and Clerks awards stands unless case law e.g. in an unfair dismissal claim, changes the entitlement!

The Fair Work Act 2009 (s123 (1) (b)) excludes extra notice payable to full time employees but still allows a casual to allege a dismissal was unfair, for example, a 15 year service casual working regular hours and terminated in favour of a new, less experienced employee may have a plausible action depending on all of the facts.

Can a business terminate for non-performance /poor attitude without risking a sustainable unfair dismissal claim?

Yes, but only if a business has less than 15 employees including working directors, the dismissal laws allow a termination for “genuine” non-performance, poor attitude and bad behaviour and only if the employee’s continuous service is less than 12 months.

If a business has 15 or more employees such termination is permitted only if the employee’s continuous service is less than 6 months. Be safe, review short term staff performance monthly, diarise at management meetings and give feedback.

Should an employer delay making a decision to terminate until just prior to 3 or 6 months’ probation?

Definitely not where there is ‘genuine’ non-performance, poor attitude or bad behaviour. In many cases, such performance becomes worse or affects the work team over time! Regularly review every four weeks after employment starts!

Should a business have a pre -exit interview prior to such termination?

Have an observer with the option of an employee support person. Listen out in case there are allegations of bullying, sexual harassment, racial slurs or other complaints. Take seriously any allegations or concerns raised, investigate and report back if required.

Does the Fair Work Act 2009 allow a fair termination where an employee has over 3 months “unpaid sick leave” in 12 months?

  • An employee is no longer protected from being dismissed, even if they provide evidence, if:
  • the total length of their absence due to illness or injury is more than 3 consecutive months, or a total of more than 3 months over a 12 month period
  • Over that period they’ve only taken unpaid leave, or they’ve taken a combination of paid and unpaid leave.
  • Employees who take a period of sick leave that is paid the whole time are protected from dismissal regardless of how long they're on leave.
  • Employers must still follow the appropriate rules for carrying out a dismissal and employees may challenge the termination of their employment by:
  • making an unfair dismissal application if the actual/probable reason for the dismissal is harsh, unjust or unreasonable
  • making a general protections claim if the underlying reason for the dismissal is a protected reason (e.g. complaining about safety, pay, workplace rights), or
  • Making a claim under a state or federal anti-discrimination law.

What steps must a business follow before terminating an employee for non-performance /poor attitude after 12 months?

First, try to manage the employee, and use counselling and warning templates which you can obtain by contacting the MTA’s Workplace Relations team by clicking here.

Second, whether counselling or warning, inform the employee of the general nature of the issues before the meeting, and give the employee the option of a support person with appropriate notice (with serious misconduct such meeting notice may be very short), outline the issues, allow a short break, hear the response & advise that a decision will be made ASAP and confirmed in writing.

Third, if the business is less than 15 employees, check you have followed the steps in the Small Business Fair Dismissal Code Checklist prior to any dismissal. Call the MTA if you are unsure of the questions as some may not be obvious.

Fourth, larger business have a “significantly greater onus” in showing they were procedurally fair in pre-dismissal planning, including steps to reverse bad behaviour, poor conduct, or poor skills before making the final decision to dismiss.

Finally, termination must never be simply by phone, email or text (according to a recent decision) unless there are special circumstances such as fear of physical violence or geographical location if the employee is not contactable. Ideally ask the person to call the employer.

For any advice on any of the above matters, contact the MTA’s Workplace Relations team by clicking here.