Don’t let terminating an employee or making an employee redundant backfire on your business

Termination of employment is an unfortunate but essential part of running a business. It is also one of its most complicated elements. You need to ensure that termination doesn’t result in the employee making an unfair dismissal or general protections claim at the Fair Work Commission.

With our help, you can adopt a strategy that leaves the goodwill of the business intact while allowing your employees to part with grace.

What is considered unfair dismissal?

An unfair dismissal is a decision to terminate an employee’s contract or force an employee to resign, in a ‘harsh, unjust or unreasonable’ manner. This could be the case if:

• There was no valid or well-founded reason for the termination; or
• The employee had not received any warnings prior to the termination, or been given an opportunity to respond to any such warnings.

An employee whose contract has been terminated or who has been forced to resign may commence an unfair dismissal action if he or she:

• Has been employed by the employer for at least six months, or at least 12 months in the case of a small business employer with fewer than 15 employees; and
• Earns an amount that is under the high income threshold.

If you would like to find out the specific implications of your situation, contact us now for a free discussion.

What is considered wrongful termination of employment?

A wrongful termination may occur when the contract did not give the employer a power to do so. This claim is most often used by employees who can’t make an unfair dismissal claim because they earn an amount higher than the income threshold.

Need to know more? Give us a call now and we will answer questions specific to your situation.

What is a general protections claim?

A general protections claim arises where an employer takes ‘adverse action’ against an employee for a prohibited reason.

Prohibited reasons include:

• An employee’s participation in lawful union activities.
• Discriminatory reasons, such as the race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction, or social origin of the employee.
• An employee’s exercise of his or her workplace rights, such as the right to take leave or to make a complaint about his or her employment.

Employers must be particularly careful in the context of adverse action claims. If the employee makes a claim and proves that the employer took the adverse action, the employer will be required to prove that it wasn’t for a prohibited reason.

Employers who don’t take sufficient care to put in place proper performance management and workplace investigation processes may be caught off guard.

What defines redundancy?

An employer can terminate an employee’s contract on the grounds of a redundancy in two circumstances:

• Where the employer decides that it no longer wants the jobs or tasks that the employee has been doing to be done by anyone.
• Where the employer decides to eliminate the employee’s role or position as part of a restructure, and to redistribute the jobs or tasks associated with that role or position to other employees in different roles or positions.

How we help employers manage their termination process

We can make the process fair and legally binding by:

• Advising you on whether your business has a legal right to terminate a particular employment contract.
• Helping you to determine what a fair and commercially sensible severance payment might look like.
• Drafting deeds of release with sensible and enforceable post-employment restraints.

Please contact us to find out more about how our experienced workplace solicitors can help you to manage the termination process in a viable and sensitive way.