Apart from the risks associated with terminated employees seeking recourse for unfair dismissal under relevant provisions of the Fair Work Act, businesses may also experience negative impacts through suffering damage to their reputation and the diversion of resources to defend claims made against them.
While it can be difficult to eliminate the risks of firing an employee entirely, undertaking an appropriate process before the termination of employment can significantly reduce them.
USE THIS CHECKLIST FOR YOUR EMPLOYEE TERMINATION PROCEDURE
1. Ensure you can demonstrate the employee has been made aware of the expectations and standards required (via an up-to-date position description, regular performance reviews, specific and documented conversations about what is required, for example).
2. Ensure there is evidence the employee has been made aware of shortfalls on at least a couple of occasions (via previous performance review discussions, verbal warnings evidenced by diary notes, plus at least one written warning).
3. Ensure you can demonstrate the employee has been offered reasonable support to achieve the expected standard of performance (e.g. time and reasonable access to training if needed), and that they have been given an opportunity to explain any other issues that might be temporarily impacting performance. A reasonable period of time needs to be made available for the employee to achieve the standard required
4. Once you get to the point of having formal meetings with the employee regarding their performance, give them adequate written notice (the minimum notice period is 24 hours), and ensure they are aware that the meeting is to discuss performance issues. If termination is a possibility, offer them the opportunity to bring an observer (note: lawyers acting in a professional capacity are specifically excluded from this role). It is generally wise for the employer to also have an observer in attendance.
5. When discussing performance issues it’s important to not be seen to pre-empt the outcome. Discuss the issues, seek an explanation, and, if the explanation is not sufficient, formulate and issue a formal warning after the meeting.
6. Formal warnings should include details of the standards to be achieved, any support that has been or will be made available, other relevant issues discussed, the date on which performance will be again reviewed and the possible consequences of not achieving the required standard (up to and including termination of employment if indeed this is a possibility). The employee should also be provided with a further opportunity to formally respond to the issues raised. The precise details of standards to be achieved could be documented in a performance improvement plan or similar.
7. Have the employee sign as having received and understood the relevant documents (they don’t have to agree with your assessment, just acknowledge their receipt and understanding). If they refuse to sign, make a note to this effect on the documentation.
8. If the matter does proceed to termination, ensure the reasons for the termination are clear, the termination is confirmed in writing, and there is adequate notice of termination.
Businesses may be able to ‘shortcut’ the above process in certain cases such as in the event of serious misconduct such as harassment or theft or where an employee is to be terminated early on in their employment (i.e. during probation).
My Business, in partnership with Australian Business Lawyers & Advisors, has developed a Termination Checklist to help businesses stay compliant.
This checklist is exclusively available to My Business Workplace subscribers.
To learn more about My Business Workplace and how you can access more than 170 policies and documents to keep your workplace legally compliant, contact our team here.
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