Termination of Employment

Under the new National Workplace [relations] system, new ‘Unfair Dismissal’ laws have been introduced which will impact upon Small Business.

For the purposes of definition… Unfair Dismissal occurs when an employee has been terminated and it is found that the dismissal was harsh, unjust or unreasonable and the dismissal was not a case of genuine redundancy.

Note… Unfair Dismissal does not occur for Small Business who employ fewer than 15 employees and certain processes/guidelines were followed to ensure the actions/outcomes were appropriate.

So, when is a dismissal considered harsh, unjust or unreasonable? When it is found that:-

There was no valid reason given for the dismissal with regards to the employees conduct or capacity;
The employee was not notified of the reason nor allowed the opportunity to respond; and
[if] the dismissal relates to unsatisfactory performance, was the employee warned about such performance issues prior the termination;

Notwithstanding an employer has the right to summarily dismiss an employee for reasons such as; Serious Misconduct, which includes theft; fraud; violence and [serious] breaches of Occupational Health and Safety procedures.

Further Workplace Legislation prohibits an employee being terminated where the reasons are deemed ‘Unlawful’ (i.e. reasons that are deemed discriminatory). Generally the employee will have protection against ‘Unlawful’ termination under the General Protection provision of the Fair Work Act 2009.

When the employment relationship ends, employees should receive the following entitlements [in their final pay]:-

Any outstanding wages (or other remuneration) still owing;
Any payments being made in Lieu of Notice;
Any outstanding entitlements to Annual or Long Service Leave; and
Any severance payments (with regards to Redundancy) as per the [relevant] Federal Workplace Laws, or the respective Industrial Agreement (i.e. Awards, Agreements);

When an employee has been terminated and he/she feels the termination was unfair, they have the opportunity to seek the assistance of Fair Work Australia (FWA).

Applications regarding Unfair Dismissal must be lodged within 14 days of the termination date. Once FWA is involved certain actions are initiated including the verification of the claim and the instigation of the conciliation process.

If FWA finds the dismissal was in fact ‘Unfair’ it may order the reinstatement of the employee or financial compensation (of up to 26 weeks pay).

Of course the employer can object to such an application [of Unfair Dismissal] especially if:-

The application was lodged outside the prescribed time limits;
The applicant (i.e. employee) is not covered by Unfair Dismissal laws (or is not eligible to make an application); or
The complaint is frivolous, vexatious or has no reasonable prospects of success.

Whilst the termination of employment, for any reason, is never a pleasant experience, it is sometimes necessary (given the prevailing circumstances). Therefore it is imperative that organizations ensure this process is conducted professionally, appropriately and according to legislation.