Are You Aware of When it is Lawful (or Not) to Dismiss an Employee?

March 27, 2016 - 10 minutes read

workplace_1Sometimes owners or managers of businesses or organisations complain about being ‘stuck’ with an unsuitable employee due to their fear of unfair dismissal laws. However, ‘unfairness’ is only one side of the coin; there are in fact steps you can take to fairly and lawfully dismiss employees that are not of benefit to your organisation.

The important thing in all this is to familiarise yourself with the rules surrounding hiring and firing (such as the Small Business Fair Dismissal Code) and to act fairly, honestly and professionally throughout. It’s also a good idea of course to implement good procedures with regard to hiring staff, in order to get it right from the start and reduce the risk of all that pain down the track!

The Small Business Code

The Small Business Fair Dismissal Code came into operation in 2009 and applies to businesses or organisations with less than 15 employees on their books (not including irregular casuals – that is, casuals who only work from time-to-time). It outlines when an employee can be summarily dismissed (i.e., without notice) and when they cannot.

As an example, an employee may be fired without notice or warning if there are reasonable grounds to suspect serious misconduct such as theft, fraud, violence, or serious OHS breaches – in fact the type of acts that you would report to the police.

Apart from that however an employee who is performing poorly at work should be given warnings (preferably in writing), and be provided with the opportunity to respond and also to improve their performance. For instance, let’s say an employee’s work is below standard or that they are frequently late or absent – in this case you need to first have a discussion with them to try to solve the problem, before taking other actions. It could be the case that they have not received adequate training, or that they are having personal difficulties at home and need to take some time off work. Any warnings or disciplinary actions you do make should be documented, otherwise a lack of evidence that these things actually occurred could be a problem later on.

Good communication generally with your employees is also important to nurture positive relationships and to enable them to thrive in your organisation – see below under ‘Communication tips’ for ideas on making this happen.

When is it definitely unfair to sack a worker?

It is unfair to sack someone for discriminatory reasons (such as their political views, gender, race, religion, colour, age, disability, or pregnancy) – or due to their membership or non-membership of a union or involvement in after-hours union activities. It is also not appropriate to terminate their employment due to lateness or absenteeism without first providing proper warnings and opportunities for improvement, or to fire them by ‘faking’ a redundancy (see section below on redundancies).

What payments must be made on dismissal?

Essentially dismissed employees should be paid what is due to them – such as wages owing, unused (accrued) annual leave, and possibly pro-rata accrued long-service leave. For redundancy payments see the section below on redundancies.

When can a worker make an application to the Fair Work Commission?

In the case of a small business, an employee can lodge an application if they have worked for the employer for at least 12 months. For employers of more than 15 employees, the worker need only have been employed for 6 months. The employee has a maximum of 21 days from the date of dismissal in which to lodge the claim.

The claim will only be accepted if the worker was dismissed for a prohibited reason – such as discrimination or lack of proper warnings or notice.

Communication tips

Poor communication can lead to all kinds of misunderstandings regarding a worker’s employment. For example, in some cases an employee might not be clear on what is expected of him or her, or else feel he/she is being targeted or ‘picked on’ by the employer. Good communication can help to prevent some of the problems that may arise that could lead to the potential for dismissal.

Suggestions for better communication include:

  • Always provide positive feedback as well as negative –
    It’s important to communicate achievements as well as problems. Employees have been sometimes known to complain that they only get noticed when something goes wrong.
  • Be clear on job roles –
    Communicate clearly to employees what you expect of them in their roles. If they are unclear on this, it can make it hard for them to perform at their best. A proper induction plan and signed contract helps to make this happen. Regular performance reviews can also be used to provide feedback and also help to clear up any problems or misunderstandings.
  • Discuss problems with employees –
    If for instance an employee’s performance is poor or there is another problem, make a time to meet and be prepared with what you want to say, and for the possibility of an upset reaction. It’s important to always remain calm and professional, and to allow the worker the chance to speak and to listen to their point of view.
  • Don’t wait until it’s too late –
    It’s not a good idea to allow problems to fester and then lose your cool and threaten the worker with the sack! Nip problems in the bud before they grow.

The importance of good recruitment practices

Getting it right from the start can make all the difference! Good hiring practices include drawing up an accurate position description, deciding on the qualities you would like in an ideal candidate, determining the terms of employment, being well-prepared for interviews, drawing up work contracts, thoroughly checking references, taking the new worker through a thorough induction and so on.

Sound recruitment practices help you to make better decisions regarding hiring of workers, which may in turn lead to better performance and retention of staff and have a positive impact on your church’s workplace health and safety.

What about redundancy?

Redundancy is another matter and is not the same thing as dismissal. Some business owners have been caught out implementing ‘fake’ redundancies, such as making an employee ‘redundant’ and then re-advertising their position and giving their job to someone else.

However true redundancies are about the job and not the employee; it is the job that becomes redundant due to changes within the organisation – such as a restructure where the job role is absorbed into that of other employees. A genuine redundancy can only be made for specific reasons, such as the job being done by machine, a business downturn, a merger or restructure, or insolvency or bankruptcy of the organisation.

Small businesses are not usually required to make redundancy payments. In the case of businesses with more than 15 workers, redundancy pays will be required for employees who have worked for the employer for 12 months or more. The amount due will depend on the length of continuous service, up to a maximum of 16 weeks’ pay.

Where to go for more info

As long as you are abiding by the Fair Work Act and the Small Business Code regarding hiring and firing, you should have nothing to fear regarding unfair dismissals.

If you would like more details on these topics, see below for links.

Fair / unfair dismissals:

Small Business Fair Dismissal Code:

Workplace discrimination:

Redundancy pay calculators:

Hiring tips:

Written by Tess Oliver




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