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| Unfair dismissals - how to avoid them |
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Contact: Tina Doan
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A member of FindLaw’s editorial team wrote this article. If you need legal content or editorial services for your website please contact Huntly Gordon
What happens when you believe that an employee of yours is not performing to an acceptable standard? Before you decide to terminate their employment, you should be aware that legislation exists which grants an employee certain rights in the event of a termination of employment and which also imposes particular obligations on an employer with regard to the dismissal.
Terminating an employee may be a stressful experience for both the employer and employee. If the dispute goes to court, then it will be costly and time consuming. This is why it is necessary that as an employer, you consider some important issues before a decision to terminate is made.
When can't you dismiss an employee?
Before you terminate an employee, you should note that in New South Wales, it is illegal to dismiss an employee for the following reasons:
- Temporary absence from work due to illness or injury
- Union membership or non-union membership
- Participation in union activities outside working hours or with your consent inside working hours
- Being an elected representative of the employees
- Seeking election as a representative of the employees
- Filing a complaint against you or another employer involving alleged breaches of the law
- Participation in legal proceedings against you or another employer
- Taking of, or intention to take, parental leave
- On the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, ethnicity or religion
When can you dismiss an employee?
To terminate an employee's employment, you must have a valid reason to do so. The valid reason must be based upon one or both of the following reasons:
- Employee's poor performance
If the employee's performance has been unsatisfactory, your personnel records should document the employee's work history. For example, it should include any warnings that were given to the employee and any training or counselling provided and whether there was any noticeable improvement in the employee's work performance. If the reason for the dismissal arises from the misconduct of the employee, ensure that you have sufficient evidence to establish the misconduct. You may need to consult your legal adviser or employer organisation to be certain of your grounds.
- Conduct of changes to the operational requirements of your business
This may arise where your business is experiencing a downturn or as a consequence of a restructure. In situations where termination results due to the financial circumstances of your business, provide information to the employee showing them why you must take this action. There is a chance that the employee will understand your motivation and the necessity to let them go. If no information is offered to the employee, the employee may take your decision as a personal affront and may be more inclined to pursue the matter in court.
Giving adequate notice
The period of notice required to be given to an employee in the event of dismissal is determined by the relevant award, agreement or the employment contract that the employee is employed under. This may vary for different employees and you should check the notice provisions under the relevant award, agreement or contract. However, many awards specify a period of one week's notice. You should give the employee a letter advising them of the termination and the date on which their employment is to cease. The letter should also include the reasons for the termination to avoid any misunderstanding. More importantly, the letter should be accompanied by your own explanations as to why the termination is occurring in order to assist the employee to fully understand the reasons for their termination.
Alternatives to dismissal
Termination of employment can be a traumatic experience for both employee and employer. Significant costs may also be involved in recruiting and training a new person. In light of this, you may wish to explore some alternatives to dismissal. The NSW Department of Industrial Relations suggests the following options:
- Redeployment- Can the employee be moved to another department? Perhaps the employee is better suited to another role. If this is the case, the employee maintains continuity of service and at the same time, gains a better understanding of other parts of your business.
- Reduction in hours - If a tight financial situation forces you to let an employee go, consider if your business has the capacity to keep the employee working at reduced hours.
- Developing an enterprise agreement - this involves ascertaining whether the relevant award, if applicable, suits your business. You may find that it would be more beneficial for you and your employees to work pursuant to an enterprise agreement. If this is the case, talk to your employees or the union to see if an agreement can be made.
- Asking employees to take leave - if your employees have accumulated annual or long service leave, you may be able to request that they take this leave.
Planning and organisation - avoiding an unfair dismissal
Although in some cases a dismissal may be unavoidable, there are measures which may help to maximise your chances of recruiting and retaining a capable and happy employee.
- Recruiting - by carefully defining the requirements of the job, you increase your chances of selecting the right person for the position. You can achieve this by considering the tasks and responsibilities of the job and identifying the skills and experience required to successfully perform these duties. Also include reference checks on the prospective applicant during the recruitment process to gain a better idea of their behaviour and work ethic. Be sure to ask the applicant before contacting their referees.
- Probationary period - it might be beneficial to both you and the employee if a probationary period is established. During this time you can observe how the employee fits into your business culture and assess their performance.
- Performance appraisals - your employees' performance should be monitored and evaluated on a regular basis. This allows any problems to be identified early on and appropriately dealt with. For example, you may find that further training is required. Employees also welcome feedback from you and this gives them an opportunity to ask you questions.
- Grievance procedures - establish formal grievance procedures within your business so that employees know that they always have an avenue to discuss their concerns. An employee who doesn't have someone to talk to about work issues may become volatile and disruptive. It will also assist you in identifying problems early on and to respond appropriately.
Conclusion
Undoubtedly, a termination of employment can be distressing for both the employer and employee. Where possible, consideration should be given to alternatives to dismissal. If this is not feasible, then it is in both your interest and the employee's to handle the matter sensitively and rationally. A bitter employee who is dismissed from your employment usually translates into a lengthy and time consuming court case.
Tina Doan
BComm, LLB (UNSW)
Legal Practitioner
March 2001
March, 2001
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