When Can an Employee be Validly Terminated?
In Australia, absent of any express provision included in an employment contract, an employee may be terminated only for the following lawful reasons:
- Lack of competency – the employee’s work is not up the required standard;
- Serious misconduct – the employee has been involved in an assault, theft, fraud, or other conduct that may be deemed incompatible with their continued employment, or risks the health and safety of other employees;
- Genuine Redundancy – the employee’s position is no longer required by the employer because of changes in the operational requirements of the employer’s business; and
- Mutual Agreement – the employee and the employer mutually agree to terminate the employment relationship.
Unlawful termination on the other hand includes the following:
- the employee has exercised an employment right, such as taking leave or requesting a flexible working arrangement;
- temporary absence from work because of illness or injury;
- filing a Worker’s Compensation Claim;
- trade union membership, or non-membership of a trade union;
- making a compliant regarding their employment or taking part in industrial action;
- for reasons relating to the employee’s race, age, gender, sexual orientation, marital status, physical or mental disability, family or carer’s responsibilities, religion, pregnancy, political opinion, national extraction or social origin;
- absence from work during maternity or other parental leave; and
- even temporary absence from work for the purposes of engaging in a voluntary emergency management activity, here the absence is reasonable having regard to all the circumstances.
Any termination based in part on any of the above examples may leave an employer liable to a claim. Further, once a claim is lodged the employer becomes responsible to prove that termination was not for one of these reasons. To protect both employers and employees, employers are encouraged to think carefully and act deliberately when making any decisions regarding employees. If an employer considers that termination may be lawful option, they are encouraged to provide warning to employees of any concerns, give the employees opportunity to respond to these concerns and genuinely consider any alternative to dismissal. If termination remains the most appropriate option, employers are required to ensure that employees are given adequate notice, which must be given in writing to the employee or alternatively sent to their last known address.
The length of the notice period required will be determined by the applicable clause of the employment contract, or as otherwise set out by the relevant employment standard. Finally, the employer should ensure that the employee has received the correct amount of pay, inclusive of any entitlements on termination. The amount the employee is entitled to will be dependent upon the individual circumstances and the employer is obliged to ensure that any lump sum payment covers all of the employee’s entitlement.
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Date: September 2018