Employee dismissal does not need to be a traumatic or costly experience, says employment lawyer Brian Powles.
Most relationships come to an end. This is a part of life. When it comes to many of our more difficult romantic relationships and friendships, parting ways can often be the best solution for everyone involved.
The same is true for employment relationships. And, despite the personal anxiety and legal risks that a dismissal can create, if handled carefully and respectfully, a dismissal does not have to be a traumatic or costly experience.
There are really two key considerations that all employers must set their mind to in order to ensure a positive outcome. Firstly, identify the reasons for your decision and ensure those reasons are valid, sufficient and not discriminatory
in nature. Secondly, ensure that a thorough and transparent process is followed, which provides the employee with as much fairness as possible.
Consider the reason for dismissal
Identify the concerns that you have about the employee’s capacity or conduct and consider whether, if established to be true, those concerns would give rise to a dismissal – bearing in mind the employee’s circumstances and whether or not that employee has protection from the unfair dismissal provisions of the Fair Work Act 2009 (Cth).
It is critical, however, that the final decision is not made until after the following process has been followed.
Tell the employee the reason for the possible dismissal
For an employee with access to an unfair dismissal remedy, it is essential that the employer notifies them of the concerns they have relating to the employee’s capacity or conduct. Ideally, employees should be notified in writing of the specific reasons that their job is at risk. This may either be the performance or capacity concerns, or specific allegations relating to misconduct.
It’s important to note that when the reason for the proposed termination is not relating to the employee’s capacity or conduct, but is because the employer no long wishes for the job to be done by anyone, this is a ‘redundancy’ and a different process will apply.
Provide a genuine opportunity to respond
After the employee is notified, they should be given an opportunity to respond to these concerns (or any allegations if related to misconduct). The employee must essentially
be given an opportunity by the employer to change the employer’s mind about whether that employee should, or should not, be dismissed.
It is vital the employee has a genuine opportunity to respond prior to making the decision to dismiss. It is not enough to merely appear to give this opportunity. Even if there is ultimately a valid reason to terminate the employment, a failure to provide this opportunity to an employee may render a dismissal ‘unreasonable’.
Carefully communicate the dismissal to the employee
Despite many amazing technological developments in the new ‘information’ age, it is still important to meet with employees in person for any meeting relating to possible dismissal. Dismissing employees over the phone (or even worse, via text message or email) should be avoided at all costs.
A dismissal does not have to be affected in an adversarial or combative manner. Often, having a respectful conversation, which allows the employee to preserve their dignity, can be the best protection against the issue escalating unnecessarily. Even if the employee becomes abusive or emotional, the employer/manager is well advised to remain as calm as possible.
It is also recommended that employers provide the employee with an opportunity to have a support person present. Contrary to common belief, the Fair Work Act does not create a positive obligation to provide this; an employer must only not ‘unreasonably deny’ the employee a support person. In our experience, however, the best practice is to actively provide an employee an opportunity to have a support person present during a termination or disciplinary meeting.
The importance of a written warning
If the employee has access to an unfair dismissal remedy, and the valid reason for dismissal relates to unsatisfactory performance, employees should be warned that their performance is below the required standard. It should be in writing, and should clearly indicate what improvements are required, and set out that dismissal may occur if those requirements are not met. This message needs to be explicit, to have any legal value. A suggestion or implication of possible dismissal is not enough.
While it is not necessary for a formal performance improvement plan to be implemented, it is important that the employee be given a reasonable timeframe to improve for any warning to be of legal effect.
If the employee does not improve, the employee should be informed
of this in a formal meeting where they are given an opportunity to respond. Following this, a decision on whether to provide them further time and support or dismiss them may be considered (see above).
A ‘harsh’ dismissal
Employers should be aware that the following factors may support a finding that the dismissal was ‘harsh’ for the purposes of an unfair dismissal claim:
- there will be a significant personal or economic impact on the employee, such as if the employee is unlikely or unable to find alternative employment;
- the employee had a long length of service, especially where that service was unblemished or of a high quality; and/or
- an employee is dismissed for conduct when other employees engaged in comparable conduct and faced lighter penalties.
Once these factors are considered, it may be necessary to assess whether the consequences of dismissal is actually disproportionate to the gravity of the misconduct or performance concern, and to consider whether another option (such as final warning) may be more appropriate. In our experience, it is only in extreme cases where this consideration becomes relevant, and seeking external advice may be desirable before making the decision alone, particularly where an employee has a very long period of service.
What notice is required?
Consider how much notice is required. Only in ‘serious misconduct’ cases is instant dismissal legally justified. The minimum notice period will either be dictated by section 117 of the Fair Work Act and will in part depend on the employee’s age and length of service, or will be defined by the contract of employment – whichever is the longer.
Consider whether actual notice should be worked out by the employee, or whether it should be paid to them as a financial payment in lieu of notice. In many instances, for the protection of the employer’s various interests, it may be commercially preferable to remove the employee straight away and payment in lieu of notice.
Concluding remarks
There is no doubting that dismissing an employee is not a pleasant experience, but it is a reality of running a business. There are times when an employer will have to make the tough decision to dismiss, knowing there is a risk of a claim being made. Often, this is the best commercial decision, in spite of the risks, as keeping the employee in the workforce is overall more dangerous than facing a claim.
A careful regard to the steps identified above will significantly reduce the prospects of a successful claim being made by a former employee. When in doubt, however, seek the assistance of an employment lawyer, to make sure that any of the potential risks are reduced to the minimum possible. AMP
For more information, contact brian.powles@pcclawyers.com.au or visit www.pcclawyers.com.au
