TERMINATION OF EMPLOYMENT KNOWLEDGE BASE

Dismissing an employee can take a number of forms, and there are a number of matters that an employer needs to consider before making a decision to dismiss an employee.

These include the amount of notice required, award and legislative requirements, the terms and conditions in the contract of employment and the reasons for dismissal. You must make sure you understand these requirements to ensure you avoid any legal problems down the track.

 

Forms of Termination

The varying forms of termination include:

 

Notice Period

Under the Fair Work Act, an employer has to give the following minimum notice periods when dismissing an employee:

Period of continuous serviceMinimum notice period
1 year or less1 week
More than 1 year to 3 years2 weeks
More than 3 years to 5 years3 weeks
More than 5 years4 weeks

 

However, where an employee is over 45 years of age and has worked for the employer for at least 2 years, they are entitled to an additional week of notice.

When an employee resigns, they may also have to give notice to their employer based on the terms of their award, enterprise agreement or contract of employment.

For more information on the process to follow, please refer to our redundancy process checklist.

 

Award Requirements

Employers must also refer to any relevant award or agreement that covers the terminated employee to determine if any additional obligations may apply to the termination procedures or employee entitlements.

Common award provisions include consultation about major workplace change that may result in redundancies, notice periods (in addition to the above), job search entitlement (allowing a terminated employee to take time off without loss of pay to seek other employment during their notice period), redundancy pay, the timing of termination payments and in regards to withholding pay on termination.

 

Legislative Requirements

Under the Fair Work Act, employees can seek remedies in regard to unfair dismissal and unlawful termination. Holding a formal disciplinary meeting correctly can limit the risk of both of these happening.

If an employee believes they been unfairly dismissed by the employer, or the employee resigns because they were forced to do so (commonly referred to as constructive dismissal, they can make an unfair dismissal claim if they have completed the minimum employment period (6 months or 12 months if the employer is a small business with less than 15 employees) and are covered by an award.

Such a case will be based around whether a dismissal was harsh, unjust or unreasonable – having regard to whether there was a valid reason for the dismissal (substantive fairness) and the process that the employer went about making that decision to terminate the employee (procedural fairness).

The Fair Work Act also prohibits unlawful termination – which states that an employer cannot terminate an employee based on temporary absence from work because of illness or injury or on discriminatory grounds and other matters.

An employer should always seek advice before considering terminating an employee.

 

Contract Terms & Conditions

An employer and employee must also consider relevant clauses set out in the employee’s contract of employment to determine if any additional obligations may apply to the termination procedures or employee entitlements.

Particularly in the case of senior and executive employees, contracts may refer to additional notice period requirements (for either party) and include reasonable restraints post-employment.

 

 

About Employment Innovations

Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, legal services, payroll solutions, migration, human resource management and HR software.

Disclaimer

The information provided in these knowledge base articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.

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