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Solution brief: Performance Management and Termination

Solution brief: Performance Management and Termination

Solution brief: Performance Management and Termination

A guide for employers

Termination during the qualifying period

The basics

Step by step guide

  1. Read the employee’s contract to determine the date on which they started their employment.
  2. Determine whether the employee has been employed for less than 6 months.
  3. If the employee has been employed for less than 6 months, write a letter to the employee telling them the following things:
    1. Their employment has been terminated during the qualifying period.
    2. They are entitled to one week’s notice or in accordance with their employment agreement.
    3. Whether they will be required to work during their notice period or whether they will be paid instead.
    4. What their last day of work will be.
  4. Give the letter to the employee or deliver it by express post to their address.
  5. Pay the employee any accrued entitlements.

Termination with notice

The basics

Step by step guide

  1. Read the employee’s contract to see whether there is a clause specifying how much notice an employer must give. If there is, skip to step 4. If there is not, go to step 2.
  2. Read the employees contract to determine the date on which they started their employment.
  3. Determine how much notice the employee is entitled to under the NES:
    1. If the employee has been employed for 1 year or less, they are entitled to 1 weeks’ notice;
    2. If the employee has been employed for more than 1 year but less than 3 years, they are entitled to 2 weeks’ notice;
    3. If the employee has been employed for more than 3 years but less than five years, they are entitled to 3 weeks’ notice;
    4. If the employee has been employed for more than 5 years; they are entitled to 4 weeks’ notice; and
    5. If the employee is over 45 years old and has worked for the employer for at least 2 years, they are entitled to an additional 1 weeks’ notice in addition to the above.
  4. If the employee has been employed for more than 6 months, write a letter to the employee telling them the following things:
    1. Their employment has been terminated;
    2. They are entitled to notice in accordance with the NES or their employment agreement;
    3. Whether they will be required to work during their notice period or whether they will be paid in lieu; and
    4. What their last day of work will be.
  5. Give the letter to the employee or deliver it by express post to their address.
  6. Pay the employee any accrued entitlements.

Termination due to poor performance

The basics

Step by step guide

  1. Has the employee consistently produced poor quality work or consistently missed deadlines? If yes, go to step 2.
  2. Give the employee a written notice:
    1. Stating that their performance has been poor;
    2. Identifying a number of representative incidents of poor performance;
    3. Directing the employee to attend a formal counselling meeting at a specified location at a specified time;
    4. Identifying who else will be at the meeting;
    5. Identifying what will be discussed at the meeting; and
    6. Informing the employee that they can bring a support person.
  3. At the meeting, you and the employee should together agree on a performance improvement plan that requires the employee to meet certain goals or benchmarks within a certain period of time, and to provide regular reports to you on their progress towards these goals. Ensure that you are providing adequate support to enable to employee to meet the agreed goals.
  4. If the performance improvement plan is complied with, discontinue the performance management process.
  5. If the performance improvement plan is not met, the employee should be issued with:
    1. A final formal warning which explains that, if their performance does not improve, their employment contract may be terminated; and
    2. A written notice requiring them to attend a final formal counselling discussion for a further performance improvement plan.
  6. Repeat step 3.
  7. If the second performance plan is not met, you can terminate the employee with notice as outlined above.

Termination due to serious misconduct

The basics

Step by step guide

  1. Identify the alleged instances of serious misconduct.
  2. Contact an external workplace investigator or instruct a senior employee without an interest in the matter to carry out an investigation into the alleged instances of serious misconduct.
  3. Give the employee a written notice:
    1. Stating that they are alleged to have engaged in serious misconduct;
    2. Briefly outlining the allegations that have been made against him or her, including all relevant details and evidence;
    3. Stating that you have appointed an independent investigator to determine whether these allegations are true;
    4. Identifying the investigator and the company that they work for;
    5. Stating that the employee is directed to attend an interview with the investigator at a specified location at a specified time;
    6. Stating that the employee will be given an opportunity to respond at that meeting;
    7. Stating that the employee can bring a support person to the meeting if they wish to do so;
    8. Stating that the employee may be dismissed or subject to disciplinary action as a result of any findings made by the investigator; and
    9. Stating that the employee has been stood down on full pay until such time as the investigation has been finalised.
  4. If the employee wishes to respond in writing, you may wish to consider allowing this in lieu of a meeting with the investigator, unless the written response then results in questions from the investigator which require further clarification.
  5. Once the investigation has been carried out, read the investigator’s report and recommendations.
  6. If the investigator has found out that the employee has engaged in serious misconduct, you should issue the employee a show cause notice outlining the findings of the investigation and inviting the employee to explain why the allegations should not result in their termination.
  7. If after considering the show cause notice, you consider that termination is warranted, you may terminate the employee without notice. You should provide the employee with a letter of termination informing them of this result.
  8. Pay the employee with the accrued entitlements.

Termination for redundancy

The basics

Step by step guide

  1. Announce that a restructure is being considered, and outline what those changes would look like.
  2. Seek feedback from affected employees.
  3. Once you have made a decision to eliminate a role, discuss the changes with the employee whose role is being affected.
  4. Read the employee’s contract to determine the date on which they started their employment.
  5. If there are no conflicting entitlements in the employee’s contract or your redundancy policies, determine how much redundancy pay the employee is entitled to under the NES:
    1. If the employee has been employed for at least 1 year but less than 2 years, he or she is entitled to 4 weeks’ redundancy pay;
    2. If the employee has been employed for at least 2 years but less than 3 years, they are entitled to 6 weeks’ redundancy pay;
    3. If the employee has been employed for at least 3 years but less than 4 years, they are entitled to 7 weeks’ redundancy pay;
    4. If the employee has been employed for at least 4 years but less than 5 years, they are entitled to 8 weeks’ redundancy pay;
    5. If the employee has been employed for at least 5 years but less than 6 years, they are entitled to 10 weeks’ redundancy pay;
    6. If the employee has been employed for at least 6 years but less than 7 years, they are entitled to 11 weeks’ redundancy pay;
    7. If the employee has been employed for at least 7 years but less than 8 years, they are entitled to 13 weeks’ redundancy pay;
    8. If the employee has been employed for at least 8 years but less than 9 years, they are entitled to 14 weeks’ redundancy pay;
    9. If the employee has been employed for at least 9 years but less than 10 years, they are entitled to 16 weeks’ redundancy pay; and
    10. If the employee has been employed for more than 10 years, they are entitled to 12 weeks’ redundancy pay.
  6. Determine how much notice the employee is entitled to in accordance with the above guidance.
  7. Write a letter to the employee telling them the following things:
    1. Their employment has been terminated on the grounds of a genuine redundancy;
    2. They are entitled to redundancy pay in accordance with the above;
    3. They are also entitled to notice in accordance with the above, and whether he or she will be required to work during their notice period or whether he or she will be paid in lieu; and
    4. What their last day of work will be.
  8. Pay the employee their accrued entitlements.

Termination while on leave

The basics

Paying accrued entitlements

The basics

Step by step guide

  1. Before dismissing an employee for any reason, determine whether the employee has any accrued entitlements.
  2. Pay the employee the accrued entitlements on termination.

Unfair dismissal applicants

The basics

Minimising the risk of a successful unfair dismissal applicant

General protections applications

The basics

Minimising the risk of a successful general protections applicant

Key things to remember

The basics

What next?

If you would like to speak to someone about terminating an employee, call us on (02) 9199 8597 or email us at wehelp@jfmlaw.com.au.

 

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Solution brief: Performance management and termination

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The information contained in this post is current at the date of editing – 5 March 2024.

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