Best practice guide to termination

by Human Capital11 Aug 2014
By Athena Koelmeyer, managing director, Workplace Law

Terminating an employee is often an unwelcome but necessary part of the duties of HR practitioners.  

If the termination process is not undertaken correctly, employers could be subject to any number of claims, including unfair dismissal, adverse action, discrimination, workers’ compensation claims for psychological injury, claims of bullying and/or harassment, union involvement, and/or disruption to the workplace.

Disciplinary procedures must be technically correct

When managing issues of poor performance or unsatisfactory conduct and/or behaviour, every stage of this process must be conducted fairly and in accordance with the provisions of any relevant internal policy, employment contract term or obligations set out in any other industrial instrument. Overall, every employee is entitled to ‘procedural fairness’ when dealing with their employment. 

Procedural fairness essentially means that employees must be told specifically what the issues are and be provided with an opportunity to respond and tell their side of the story before a decision is made about the employment relationship by the employer.  

For performance matters and some conduct matters - but not serious misconduct matters - employees must be given a fair go to improve their performance. This may mean giving the employee specific direction as to what you expect from them in terms of performance in future or providing them with refresher training.

In cases of genuine redundancy – all the necessary processes of consultation and seeking redeployment opportunities must be properly undertaken to ensure compliance with the “genuine redundancy” exemption provisions from unfair dismissal in the Fair Work Act 2009 (the Act).

The Fair Work Commission will criticise employers for failing to follow their own policies and procedures when undertaking disciplinary action, performance management or implementing redundancies, so don’t wing it – do it by the book. 

In some cases, the reason for the termination may be absolutely fine, but the procedure leading to the decision to terminate and the delivery of the actual termination message may be flawed.

This can result in a finding that the dismissal was “harsh unjust or unreasonable”. In cases where the process was very flawed, this alone can result in the employee being reinstated to their employment because they were not afforded procedural fairness by the employer.

When considering termination of employment

Employers are sometimes criticised by the Fair Work Commission for not giving employees a genuine opportunity to improve their performance to the required standards. The kinds of criticism that can be levelled at employers include:

• That the employee was not told in specific language what was wrong

• That the employee was not given clear guidance and direction as to the performance/conduct expected

• That the employee was not given sufficient training/resources to improve to the standards required 

• That the employee did not realise during the process that their employment was at risk of termination

• That the employer treated a matter as being serious misconduct when it did not fit the definition and was not sufficiently serious to warrant summary dismissal

Tips for reducing exposure to these kinds of criticisms

If this is a repeat performance or conduct issue:

a. Have you addressed this with the employee previously and given them a “fair go” to improve?

b. Have you documented your previous efforts in warning letters?

c. In each disciplinary process – did you give the employee an opportunity to respond to the allegation and/or explain themselves? Did you take that response or explanation into account when making a decision?
d. Have you considered giving the employee an opportunity to make submissions to you as to why you should not terminate the employment?  If so, have you considered those submissions?

e. If this is a serious misconduct issue, is it the kind of matter described as serious misconduct in the Fair Work Regulations?  If not, consider termination on notice, not summary dismissal as an outcome.

f. Have you provided the employee with an opportunity to respond/explain themselves?  

g. Is there a valid reason for the termination of an employee’s employment, such as ongoing poor performance, unsatisfactory conduct and/or behaviour or genuine redundancy.

h. Have you told the employee that termination of employment is a possible outcome of the process and that they should consider their employment at risk?

Delivering the message

The Fair Work Commission has made specific mention on many occasions that delivering the news of termination of employment to an employee should be done in person.

Of course, this can become very difficult where an employee is certified unfit for work, delaying the delivery of the message. 

In some rare cases where employees either refused to or could not attend for a meeting to be advised of the outcome of a process, different means of delivering the message such as telephone call, letter or in one surprising case – even SMS can be accepted – but the standard practice should be a meeting in person.

Employees are entitled to bring a support person to provide support during the process.  The Act contains an obligation on employers not to unreasonably refuse the employee a support person.

However, this does not mean that the employer has to provide a support person for the employee.


The Act requires notice of termination of employment to be given in writing. This is another good reason to ensure that you provide the employee with a letter setting out the reasons for and date of the termination of the employment.

Employers should also provide a Centrelink Separation Certificate and where required, a Statement of Service.

Of course, a termination payslip should also be made available. Employers with online logins for employees should remember that access may not be available to employees once their employment is terminated and as a result a hard copy may need to be generated and sent to the employee.

 - Athena Koelmeyer is the managing director of Workplace Law

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