Termination of Employment Guide

Public news

Keeping your cool − a step-by-step guide to handling serious incidents in the workplace.

This guide is to assist members in handling serious workplace incidents, where termination of employment may result.

While some workplace incidents might be so serious that there is a desire to get the employee out of the workplace immediately, even where termination of employment is likely, it is important to address the matter in a way that will put you in the best position to defend any resulting claim by the employee to challenge the termination of their employment.

In a lot of instances, say if an employee behaves extremely badly, you may be tempted to end their employment then and there, simply as a reaction to the event.

However, before dismissing an employee, it is important that a procedurally fair process is followed. This is a key factor considered by the Fair Work Commission if any unfair dismissal claim were to be made by the dismissed employee. Even if there is a valid, sound, and defensible reason for the termination given the circumstances, an employee could successfully challenge the termination if a fair process is not followed.

An employee covered by an award or enterprise agreement, or who earns less than the ‘high-income threshold’ (currently $158,500) will be able to make an unfair dismissal claim if they have been employed beyond the minimum employment period, which is either six or 12 months, depending on the size of the business.

Even if an employee cannot access an unfair dismissal claim, the Fair Work Act 2009 provides protection from dismissal for employees in various circumstances, including in relation to workplace rights, industrial action, and discrimination, amongst others.

To minimise the risks of these claims being made, it is important to keep your cool, and follow an appropriate process before dismissing an employee (even where emotions are running high).

Process to follow when terminating employment:

Regardless of the conduct engaged in by the employee, and the reason for the dismissal, when considering whether a dismissal is unfair, the Fair Work Commission will assess whether it is “harsh, unjust or unreasonable”. What is harsh, unjust, or unreasonable will depend on the circumstances of each case.

In most cases, it is accepted that an employer must follow a procedurally fair process PRIOR to terminating the Employee where you give reasons for the proposed dismissal as well as an opportunity for the employee to respond. This is because both the reason for the dismissal and the process adopted in coming to the decision to dismiss will be considered in determining whether a dismissal was a fair one.

In almost all circumstances, a decision to terminate employment on the spot, without following a fair process, would result in a finding that the dismissal was unfair. Following a fair process will put an employer in good stead to defend an unfair dismissal claim.

Critical steps to take before terminating employment will include:

  • Where the employee has potentially engaged in serious misconduct (which could include violence, intoxication, sexual harassment, or a serious safety breach), the employee should be stood down from work on pay, while the disciplinary process outlined below occurs.
  • If necessary, an investigation of the alleged incident can then take place. Depending on the circumstances, this may include obtaining statements from other employees who witnessed the incident, reviewing CCTV footage, etc.
  • The Employee should be notified in writing of the allegations against them and given an invitation to a meeting to discuss the matter further and give the employee an opportunity to respond to the allegations. The employee should be offered the opportunity to have a support person with them at the meeting.
  • There should be enough time between the invitation and the meeting for the employee to prepare a response and organise a support person if they wish.
  • The employee’s response should be considered, before deciding on the balance of probabilities whether the allegations are substantiated and what disciplinary action is appropriate.

Even if the allegations are substantiated, a dismissal may still be considered harsh, unjust, and unreasonable depending on the particular circumstances, and another outcome may be more appropriate. This will require consideration of the individual employee’s circumstances, including their length of service, previous disciplinary history, and the nature of the conduct they have engaged in.

The MTA has detailed guides and templates for terminating employees. Please contact MTA to be provided with relevant templates and guides.

MTA advises that under no circumstances should members terminate their employees’ employment on the spot. Please contact the WR team on 08 8291 2000 or wr@mtasant.com.au before terminating an employee at any time. As this is a complex area, we recommend you seek professional advice before considering dismissing an employee.