Terminations can be stressful for all parties involved including the employee, management and the team. It is imperative that terminations are handled discreetly and in the most dignified manner.
Employees will be looking at how the process is being managed, which will have an impact on productivity and the workplace culture.
There are several reasons for dismissing an employee:
- probationary period
- non-performance post probationary
- breach of serious misconduct
- the employee doesn’t have the ability complete the work due to injuries
- conflict between employees
- the employee has severe health problems
- the role is redundant.
- unsatisfactory performance of an employee
- breach of key policies – discrimination, harassment, bullying, drugs & alcohol, privacy & confidentiality – to name a few!
It’s important to follow a proper lawful process when dismissing an employee, including understanding your rights as an employer, the rights of the employee, and, act in accordance to the Fairwork Ombudsman legislative guidelines and procedural fairness.
When does an employment relationship end?
An employment relationship can end in the following ways:
- an employee may resign from their employment
- an employer may dismiss an employee
- the employee’s contract may come to an end
- the employee’s contract may become “frustrated”
What’s the difference between dismissal and resignation?
It’s important to understand the difference between dismissal and resignation:
- Resignation – is when the employee decides they want to end their employment.
- Dismissal/termination – is when the employer decides to end the employee’s employment.
Having a solid understanding of the different types of termination, the processes involved and how to minimise your risk can help to reduce your stress.
How do you terminate an employee for misconduct?
The most common dismissals are for misconducts. There’s no one-size-fits-all guide on how to terminate an employee. It all depends on the reasons for the termination and how long the employee has been with you.
As long as the employer follows the procedural fairness process with interviewing, allowing employee to respond, documentation, investigation (if applicable) and how the final decision was made to dismiss the employee, it will protect the employer from further claims from a disgruntled employee.
To make the process as easy as possible for you, we’ve outlined some general steps that you should take when terminating an employee for misconduct.
Procedural fairness and legislative guidelines:
Gather as much information as you can
Firstly, gather as much information as you can about the misconduct allegations made against the employee. You should complete this step before inviting the employee to a disciplinary or counselling meeting. Evidence could include gathering witness statements, video surveillance, and collecting any past warnings and copies of workplace policies that has been breached.
Hold an investigation interview
Next, you will need to invite the employee to a meeting to discuss the allegations or their conduct. This invitation could be sent to the employee by email or by letter, and you should keep a copy. We also recommend giving the employee at least 24 hours’ notice of the meeting.
To show good faith, the employer should tell the employee if they wish for a support person to be present. Employers by law, do not need to suggest a support person. It is up to the employee to request for a support person. A support person is only required if it leads to a dismissal.
(Something important to note is that a support person is only there to support the employee and not to advocate on behalf of them. This means that the support person is not able to ask or answer any questions on the employees’ behalf. They are allowed to take notes during the meeting, and if the employee wishes to confer with their support person, you should provide a break to allow this.)
In the meeting, you will need to explain what the allegations against the employee are:
- tell them why & how from the company’s perspective
- show them evidence
- witness statements if any
- any policies that were breached.
- give the employee an opportunity to respond
- document the conversation and let the employee sign-off
- adjourn the meeting to another day (but not too long)
Consider the employee’s response
In some cases, this may involve preparing an investigation report, consulting an internal or external industrial relations solicitor or consulting key senior management personnel e.g HR, CEO /COO. It is always a good idea to put everything in a document for the respective key personnel to read so everyone has the same understanding of the problem containing the relevant facts, and whether the allegations are proven on the balance of probabilities i.e reasonable satisfaction test.
You might find that, upon reflection, termination may be too harsh, and a warning may be more appropriate.
Schedule a termination/outcome meeting with the employee
Once the conduct has been established and you decide that dismissal is appropriate, the next step is to invite the employee to a meeting to discuss this outcome. Because it will lead to a dismissal, we recommend that you give the employee at least 24 hours’ notice and tell the employee they can bring a support person.
- during the meeting you will need to advise the employee of your decision to terminate and explain your reasons for the termination from the company’s perspective.
- either in the meeting, or shortly after, you will need to give the employee a letter of termination outlining the reasons for termination
- the notice period that the employee will be given, whether they need to work out the notice period (in most cases it is not advisable to let the employee work out the notice period)
- the payroll department should be able to provide the terminations payment which should be included in the termination letter.
- any ongoing obligations under their contract of employment in relation to confidentially or post-employment restraints
Other post-employment considerations:
There are some other things to consider when exiting an employee from the business. These include:
- ensuring employees return any company equipment they possess
- ensuring handovers have been completed, where necessary
- ensure the employee collects their personal items
- any money owing or expenses which need to be reimbursed
Ways to minimise your risk
By following a strict procedural fairness process in-line with legislative guidelines, the risks of an unfair dismissal claim will never occur and/or minimising the risk of a claim being made at all. Key to this is the employee must feel that the termination was fair, discreet and managed in a dignified manner, and both parties are satisfied with the outcome of the final decision.
Don’t get caught in the same traps as other employers and avoid the common mistakes that can make or break a termination process. The following list outlines some key mistakes some employers make:
- was not handled with complete confidentiality & impartiality
- not being prepared with all details, evidence, etc
- not doing enough or any research
- not listening to employee responses
- providing vague feedback
- being overly critical
- relying on or personal standards
- taking it personally
- leaving it all for the annual review
When a termination is handled well, there should not be any fear of repercussions an employee coming back to take the company to FairWork for an unfair dismissal or unlawful termination.
Seek professional advise if you need to, or, are unsure of something. This way, you will be protecting your business with the best possible outcome and avoid creating a reason for a disgruntled employee to take the company to FairWork.
Do your best to avoid the above mistakes by applying common sense, good judgement and most importantly abiding by the FairWork procedural fairness and legislative guidelines.