Naturally, every employer desires a harmonious working environment where employees perform at their best. However, there can be instances where terminating an employee becomes a necessity. It’s crucial to handle this process judiciously to prevent any negative repercussions. It’s equally important to avoid ‘unfair dismissal,’ where the termination process is mishandled or the impact on the employee is excessively harsh, even if there are valid reasons for dismissal.
Understanding Employee Rights
As an employer, it’s imperative to respect employee rights when considering a dismissal. It’s illegal to terminate or disadvantage an employee due to:
- Discrimination-related reasons
- Temporary absences due to personal illness or injury (within three months of unpaid personal leave)
- Making an employment-related inquiry or complaint
- Exercising a workplace right like carer’s or parental leave
- Absence because of a workplace injury (for a period of 12 months)
These provisions hold true irrespective of whether your employee qualifies for an unfair dismissal claim.
When Can an Employee Claim Unfair Dismissal?
An employee can file an unfair dismissal claim if they:
- Have worked for your business for at least 12 months (for small businesses with fewer than 15 employees) or six months (for all other employers)
- Are protected by a Modern Award or enterprise agreement
- Are not covered by an Award or agreement but have earnings under $169,500 as of July 2023.
Even casual employees who work regularly and have reasonable expectations of ongoing employment can claim unfair dismissal.
What Does the Fair Work Commission Consider?
The Fair Work Commission (FWC) evaluates several factors to determine if a termination was unfair. They consider the termination’s effects on the employee, including their age, family obligations, and re-employment prospects. The FWC also examines:
- Whether there was a legitimate reason for dismissal based on the employee’s abilities or behaviour
- If the employee was informed of the termination reason
- If the employee had a chance to counter the allegations
- If the employee was unjustifiably denied a support person
- If warnings were provided (pertinent to performance)
- If an alternative to termination would have been more suitable
Small Business Dismissals and the Fair Dismissal Code
For businesses with fewer than 15 employees (inclusive of associated companies), demonstrating a dismissal’s fairness can be achieved by adhering to the Small Business Fair Dismissal Code. While not mandatory, following this code can protect against unfair dismissal claims if the FWC believes the termination aligns with the code. The code can be accessed from the Fair Work Commission’s website.
Understanding Serious Misconduct
Small business owners may instantly dismiss an employee without notice or warning, given a reasonable belief that the employee has engaged in serious misconduct. Such misconduct may include theft, fraud, violence, or significant violations of occupational health and safety procedures.
In these situations, reporting the misconduct to the police can strengthen the fairness of the dismissal, though it’s not obligatory. However, having reasonable grounds for the report is essential.
Navigating the complexities of employee management and dismissal without violating general protections can be challenging.