Employee termination procedures is not the first, second or even third thing you think about in a business. Business owners are worried about sales, staff morale, customer service, contractor management and rush hour traffic.

Casual employee termination can be complex, and it can be fraught with unnecessary stress if you have not prepared your business for it. It is generally thought to be challenging to understand and cumbersome to manage, for SMMEs and large conglomerates.

If handled poorly, your valued team that is remaining will see this and judge you accordingly. It will impact trust and morale. As a business owner, you are legally responsible for knowing what your employees are entitled to and what legislation you must adhere to.  Any errors may not be attributed to “it was my HR department’s responsibility”. The buck stops at the top.

Do Termination Reasons Matter?

No doubt reasons for termination may seem unique to your industry, but they all boil down to uncommon derlying factors. No matter what the reason if an unfair dismissal application is files the commission must consider if the dismissal was harsh, unjust or unreasonable. This in terminology is called “determining the merits of the unfair dismissal claim”.

It may be that the dismissal is:

  • harsh but not unjust or unreasonable
  • unjust but not harsh or unreasonable, or
  • unreasonable but not harsh or unjust.

The concepts of harsh, unjust or unreasonable may overlap

A dismissal may be:

  • unjust because the employee was not guilty of the alleged misconduct
  • unreasonable because the evidence or material before the employer did not support the conclusion
  • harsh on the employee due to the economic and personal consequences resulting from being dismissed, or
  • harsh because the outcome is disproportionate to the gravity of the misconduct (the punishment does not fit the crime).

Criteria for considering harshness etc

In considering whether a dismissal was harsh, unjust or unreasonable, the Commission must take into account:

  • whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees)
  • whether the person was notified of that reason
  • whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
  • any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal
  • if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
  • the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal
  • the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal, and
  • any other matters that the Commission considers relevant.

It can be quiet daunting so whether you are considering dismissing an employee or whether you have received and unfair dismissal claim from the Fair Work Commission it is always best to seek expert advice.

Notice Periods

The NES (National Employment Standards) legally requires you to stipulate a minimum notice period in a signed contract at the time of employment. This applies to every business in Australia. The notice period is linked to the length of the service period.

Here is an extract from the NES regulations showing a table of minimum notice periods depending on the number of years the employee has worked for you.

Period Of Employment Minimum Notice Period
Less than 1 year 1 week
1-3 years 2 weeks
3-5 years 3 weeks
Over 5 years 4 weeks

There are two variations that deviate from the above standard notice periods for all companies in Australia. A longer notice period for termination may be negotiated between you and the employee at the time of employment. Documentation of this with appropriate signatories is essential. This longer notice period will supersede the above standards. You also need to check your specific award as some awards have a longer notice period requirements which supersedes the NES (see Professional Employee Award 2020 cl27.1)

The other variation to the regulation standards applies if an employee is over the age of 45. If on the day that you give an employee over 45 notice, and it is calculated that they have worked for at least 2 years they qualify for an additional week’s notice.

Knowing the standards, the variations, and the pitfalls is part of your preparation. If you fail to prepare, prepare to fail.

Your Preparation

If your booming business has kept your eye off the HR ball, then you probably have many questions. Here are some questions you should know the answers to:

  • When does a termination procedure start to be measured from by law?
  • How should an HR policy and procedures handbook be structured? If it exists, is it clear or unclear? Will it help us and drive us down an HR rabbit hole?
  • Where do we start on this as a business?
  • What handbooks do we need in order to be compliant?
  • If we have handbooks, are they out of date or up to date? As some labour contraventions are a crime, it is imperative you are up to date.
  • If I am not prepared, when will I have time to do it? If I have an internal team doing it when will I have time to verify their work?

Fresh HR Insights can smoothly resolve the employment termination procedure of your business starting today. It is simple and easy to work with the team at Fresh HR Insights with a four-step process.