Termination of an employee may be a result of many different causes, from serious misconduct to no fault terminations such as redundancy or medical capabilities.
Whilst navigating a termination, the employer should act as a fair and reasonable employer would have acted in all the circumstances at the time the dismissal occurred
What this means is that employment cannot be terminated at will. Employers are required to have a lawful reason to terminate an employee, and they must follow a fair and reasonable process.
Employer’s obligations
When terminating an employee, an employer is obliged to:
- Act in good faith.
- Have a fair reason to terminate.
- Follow a fair and reasonable process.
- Ensure outcomes are not predetermined, meaning being open-minded.
- Give notice of termination according to the provisions of the employment agreement (except in cases of summary dismissal for serious misconduct).
Reasons and procedures for termination
The following is a general high level list of fair reasons and fair procedures for dismissal:
| Reason | Procedure |
|---|---|
| Serious misconduct -where the conduct has the effect of destroying or undermining the relationship of trust | A disciplinary Process |
| Repeated misconduct -dismissal is justified due to an escalation of warnings for the same misconduct | A disciplinary Process - followed in each and every case a warning is issued and also before termination due to an escalation of warnings |
| Performance issues Where the employee is performing below the standards of their job or not meeting the standards set out for them. | A performance Management Process – dismissal should only be considered if the employee’s performance has not improved despite repeated attempts with a performance management plan, and the employer has warned them that termination was a potential outcome |
| Redundancy where a role is no longer required due to a genuine business reason | A consultation process should be followed where a role is no longer required due to a genuine business reason. |
| Capabilities issues - If the employee has an injury, illness or health issue that is keeping them from performing the job and the employer has considered all other alternatives, then dismissal may be justified. | A welfare process |
Generally, a fair process will require that the employer:
- Has sufficiently investigated.
- Has made the employee aware of their concerns.
- Must provide the employee with a reasonable opportunity to respond to the employer’s concerns.
- Must genuinely consider the employee's feedback or explanation before terminating employment.
Trial Period Termination
Subject to the trial period being valid, an employer may terminate an employee’s employment during their 90-day trial period and an employee will be prohibited from raising a personal grievance for an unjustified dismissal. (Such employee will not be prohibited from raising a personal grievance based on unjustified discrimination or unjustified disadvantage)
Termination by the employee
Employees can terminate the employment relationship by resignation. If an employee resigns due to unfair treatment by the employer because their employment became intolerable (objectively), then they may claim a constructive dismissal.
Notice period and termination
The amount of notice required for each employee will be outlined in the employment agreement. Where an employee is dismissed for serious misconduct, an employer would not be required to give notice, and the termination date will be immediately after the disciplinary process is complete.
It is best practice to include a notice period in every employment agreement as legislation does not speak into notice periods. This means that if there is no requirement in an employment agreement then neither the employer nor the employee will be obliged to give notice of termination.
Manage termination with Peninsula
Peninsula has worked with thousands of business owners and employers, supporting them in the challenging process of termination. We understand this decision can get complicated and as an employer you may need external support and guidance. Call our helpline 24/7 to get your questions answered.