Terminating an employee is never easy, it can be stressful for both the employer and the employee. However, it is sometimes necessary to terminate an employee for various reasons, such as poor performance, misconduct, redundancy or capacity reasons. In each case, there must be a valid reason for termination.
In Australia, there are specific laws and regulations that employers must follow when terminating an employee. This can be rather complicated to understand at first, which is why we have put together a brief discussion on this subject.
1. Understand the Laws and Regulations
The first step in terminating an employee is to understand the laws and regulations that govern the process. Employers must comply with the Fair Work Act 2009 (FW Act) and other relevant legislation when terminating an employee. The FW Act provides the minimum conditions and entitlements for employees in the National Employment Standards (NES) and industrial instruments such as Modern Awards, or Registered Enterprise Agreements.
In addition, some employment contracts have express provisions regarding the termination process that employers must also consider.
2. Determine the Reason for Termination
When terminating an employee, employers are required to provide a valid reason for the termination. The reason must be sound, defensible and well-founded, it must not be capricious, fanciful, spiteful or prejudiced reason.
3. Notify the employee of the reason for dismissal
Employers are required to inform employees of the reason for their dismissal and provide them with an opportunity to respond. This means that employees must be given a chance to address any concerns or issues before a final decision to end the employment is made.
4. Give the Employee Notice
Employers are required to provide the employees with notice of termination. This notice should state the reasons for the termination and the date on which the employment will end. The notice period will depend on the employee’s length of service, the terms of their employment contract and any applicable industrial instrument.
For example, under the NES an employee with one year of service is entitled to one week’s notice, while an employee with more than five years of service is entitled to four weeks’ notice. However, in some circumstances, employers may provide payment in lieu of notice.
5. Final Pay
Employers are required to pay out any entitlements that the employee is owed when the employment ends. These entitlements may include payment for any unused annual leave, long service leave, as well as redundancy pay, if applicable. The amount of redundancy pay will depend on the employee’s length of service, their employment contract, and any industrial instruments.
6. Return Company Property
Employers should ensure that the employee returns all company property, including keys, laptops, and other equipment upon termination of their employment. Employers should also disable the employee’s access to company systems and accounts to ensure that they employee cannot access sensitive information. These steps are essential in safeguarding the company’s data and preventing unauthorised access after the termination of employment.
Conclusion
Terminating an employee can be a challenging process, but it is sometimes necessary. Employers must comply with the laws and regulations that govern the process, provide notice, and pay entitlements to the terminated employee. By following these guidelines, employers can ensure that the termination process is fair and respectful for all parties involved.
National Employment & Labour Lawyers have a dedicated team who can assist you with your termination queries. We offer a free and confidential initial consultation, where we can discuss your situation and provide you with tailored advice. Get in touch with us today!
Disclaimer: The information contained in this article is of a general nature and is not intended to be relied upon as, nor to be a substitute for, specific legal or professional advice.
