Dismissing an employee can be stressful and complex process. It
is a significant decision that carries legal risks and can take a
significant amount of time, resources and effort.
Especially in cases of employees who earn below the defined high
income threshold, or who are covered by an award or enterprise
agreement, care needs to be taken to minimise the risk of an
unfair dismissal claim in a state or federal industrial
To protect your business, ensure that you have a valid
reason to terminate an employee. Before you terminate,
make sure you have given the employee procedural
fairness. Follow any applicable rules about dismissal,
notice of termination, and final pay, including accrued untaken
annual leave. With a legitimate reason, a proper procedure, and
quality legal advice, you can feel secure in terminating an
employee with minimised risk.
Below are four valid reasons for dismissing an employee.
Misconduct can refer to a range of behaviour including breaching
company policy and inappropriate behaviour. Serious
misconduct includes theft, fraud, assault, other unlawful
activity and any wilful or deliberate conduct that is fundamentally
inconsistent with continuation of the employment, and conduct that
causes and serious and imminent risk to health and safety or the
reputation, viability or profitability of the employer's
Company policy should be clearly set out so you have grounds to
You need to have evidence that misconduct occurred and that
efforts were made to formally warn the employee about their
misconduct. You don't need to give any warnings in the case of
serious misconduct before you can terminate, but you do need
evidence and procedural fairness.
Due process or procedural fairness means giving the employee the
opportunity to respond to allegations about their conduct.
In cases of serious misconduct, employers do not have to provide
any notice of termination. However, as this is a drastic measure,
you need to be sure you have a sound basis and valid reason, having
afforded procedural fairness.
Capacity relates to an employee's ability to carry out the
requirements of the job. In order to use incapacity as a legitimate
reason to terminate an employee, you need to identify the core
duties of the job position and assess the employee's ability to
perform them. In doing so, you must ensure that you are not
unlawfully discriminating against the employee by reason of illness
or some other incapacity.
Once again, you need evidence that a lack of capacity exists and
that reasonable measures were taken to find a solution or provide
alternative duties. This is especially important in the case of
disability or medical incapacity.
Managing poor performance can be a risky process. A structured
and well-prepared performance management plan or improvement
procedure can protect you from ending up on the receiving end of a
bullying or unfair dismissal claim.
Identify the performance problem and formally discuss it with
the employee. You need to give concrete examples of poor
performance rather than general comments about their productivity.
Give them the opportunity to respond, advise them on how they can
improve their performance and give them time to do so. Most
importantly, you need to document the process.
Ensure that you can demonstrate a well-established performance
management process in case a claim is made against you. Check
contracts, industrial agreements, policies and procedures to ensure
you are complying with any relevant rules or procedures. Verify
your facts, ensure you have evidence and again, above all, document
Redundancy is a valid reason for termination. You need to prove
that the employee's position is no longer required to be
performed by anyone because of changes in the operational
requirements of your business.
Protect your business from an unfair dismissal claim by making
sure you follow any consultation requirements outlined in an
applicable award or registered agreement. You should also have
explored all reasonable opportunity to redeploy the employee in
another position. It is best practice to consult employees about
redundancy and redeployment regardless of the right to be consulted
under an award or enterprise agreement. Affording empathy to
employees who are adversely affected by redundancies goes a long
way in minimising the risk of claims.
Contact MDC Legal if you need to speak with employment lawyers
in Perth, especially if it's about how to lawfully dismiss an
employee. Our workplace lawyers are experienced in HR legal issues
and understand the laws governing
dismissals. We can safeguard your business from costly,
reputation-damaging, and time-consuming disputes with dismissed
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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