Ending employment

Ending employment

Most businesses from time to time will need to dismiss a staff member. Employers must ensure they follow the correct procedures to ensure dismissal is not considered harsh, unjust or unreasonable.

Small business employers (with fewer than 15 employees) must follow the Small Business Fair Dismissal Code to protect against unfair dismissal claims.

Small business employees cannot make a claim for unfair dismissal in the first 12 months following their engagement. However, if an employee is dismissed after this period, it is the employer’s responsibility to follow the code.

Employers can dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. For example, serious misconduct such as theft, fraud, violence and serious breaches to OH&S procedures.

For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police.

In other circumstances, employers must give the employee a valid reason why he or she is being dismissed. A verbal warning or written notice should be given to the employee that he or she risks dismissal if there is no improvement.

Employers must provide the employee with an opportunity to respond and rectify the problem within a reasonable amount of time. This may mean providing training or opportunity to develop their skills.

If an employee makes a claim for unfair dismissal to Fair Work Australia, the employer will be required to provide evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination, etc.

Employers must also ensure to provide the correct entitlements on termination. Employees must receive the following in their final pay:

  • Outstanding wages
  • Any payments in lieu of notice
  • Accrued annual leave or long service leave entitlements
  • Redundancy or severance pay entitlements where applicable.

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