As employers, you should be aware of your employees' rights
when considering the termination of their employment. Dismissing an
employee may be deemed unfair if it is harsh, unjust or
unreasonable, or not due to a genuine redundancy, which could
render you liable to pay compensation or reinstate the
Subject to some exceptions, in the event of dismissal
– including if the employee was forced to resign by their
employer – an aggrieved employee may apply to Fair Work
Australia for a remedy. An important matter Fair Work Australia
must take into account when considering an unfair dismissal
application is whether there was a valid reason for the
The management action you take before dismissing an employee
will be considered by Fair Work Australia when determining whether
the dismissal was fair or not. It is important to remember that
there is no "three strikes rule". However, if an
employee's performance has been unsatisfactory, you should warn
them about that and give them an opportunity to respond. If they
fail to respond satisfactorily, and dismissal is necessary, you
should notify the date of dismissal.
If your practice is a small business in the national workplace
relations system with fewer than 15 employees, then you should
follow the checklist in the Small Business Fair Dismissal Code.
Where a qualifying employer has strictly followed the checklist,
then the dismissal will be deemed to be fair.
However, where an employee commits theft, fraud, violence or
serious occupational health and safety breaches, you may need to
dismiss that employee immediately by way of summary dismissal. If
so, you should clearly state the reasons for the dismissal.
You may also need to dismiss an employee because their role has
becomes redundant, for example due to a downturn in business, a
merger or an internal restructure. If so, the reason for redundancy
must be genuine. A redundancy is not genuine if your operational
needs have not in fact changed or you have not consulted with the
employee. It may also not be genuine if you could have reasonably
employed the employee somewhere else within your organisation or an
associated business. If the redundancy is not genuine, the employee
may claim it as an unfair dismissal.
The unfair dismissal laws under the Fair Work Act do
not apply to all employees, in particular those earning over
$123,300.00 (on current figures) and those who have only recently
been hired: to apply for unfair dismissal, the employee must have
completed at least six months of employment (or 12 months under the
Small Business Fair Dismissal Code). Employees engaged under a
contract for a specified period or task and whose dismissal occurs
at the end of the task or period are also not eligible to make an
You should also be aware of the required notice periods and
final pay for any employees you dismiss, including in the case of
If litigation is threatened or is commenced by a dismissed
employee, you should notify your employment practices insurer or
broker immediately. However, sensible management action taken in a
timely manner before dismissal when an employment issue arises can
help avoid the cost and time associated with litigation and damage
to your business.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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