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Dismissal & Termination

Problems can occur when an employee leaves a job. You need to be aware of the following issues.

What is Unfair Dismissal?

If an employee is dismissed and believes their termination was unfair or unjust the employee can make an unfair dismissal claim. Employees who have been employed for less than 6 months (or less than 12 months for small businesses) are excluded from bringing unfair dismissal claims. To qualify as a small business, you must have less than 15 full time equivalent employees. Also, if you are a small business and you follow the Fair Dismissal Code, you should be able to successfully defend any unfair dismissal claim made by a former employee.

Remember, employees who are not covered by awards, enterprise agreements or earn in excess of $145,500.00 (adjusted annually each July) are excluded from making unfair dismissal claims. Any claim for unfair dismissal must be made within 21 days of the date of termination.  The former employee’s maximum claim is six (6) month’s remuneration less any notice period paid at termination.

Does an employee have any other rights?

Yes. The federal industrial relations laws also protect employees from adverse action, coercion, undue influence or pressure, misrepresentation and unlawful termination, which is identified as a termination of someone’s employment on the basis of race, colour, gender, sexual preference, age, physical and/or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin; temporary absence from work because of illness or injury; or for exercising one of the employees many workplace rights.(General Protections Claim)

If a termination occurs the disgruntled employee has 21 days from the date of the termination to make a General Protections claim.  The problem for employers is that they have to prove the claim didn’t happen and compensation is uncapped.

How can you terminate fairly and safely?

There are a number of things employers can do:

  • Recruit for a specific job description;
  • Have in place employment contracts;
  • Have in place workplace policies and procedures to deal with behaviour, performance reviews and termination;
  • Use the contracts, policies and procedures;
  • Document terminations.

What else do employers need to be aware of?

Record Keeping

It is essential for all employers to keep written records of their employees for a minimum of 7 years. These records must be easy to access and written in English.

Employee records must include the following information: the name of the employer, its ABN and the name of the employee, the employee’s start date, whether the employee is full-time, part-time or casual, whether the employee is permanent or temporary, the employee’s pay rate, including gross and net amounts paid and any deduction, any loadings, leave entitlements, monetary allowances, bonuses or incentive payments, penalty rates or other entitlements paid that can be singled out, the hours worked, a copy of the written employment agreement, and ff an employee is terminated, a copy of that termination.

Businesses must remember that it is not okay to take unpaid work trials, delaying payment, not paying employees for training, meetings or time that they spent opening or closing the business, or offering goods or services including food instead of payment.

What are the National Employment Standards?

From 1 January 2010. the National Employment Standards (“NES”) apply to all employees, regardless of their remuneration package. The NES are:

  • Maximum weekly hours of 38 hours for full time employees;
  • Flexible working arrangements for parents of a child under the school age and/or a disabled child under the age of 18, or having responsibility for the care of such a child;
  • Parental leave;
  • Annual leave;
  • Personal carers, carers and compassionate leave;
  • Community service leave;
  • Long service leave;
  • Public holiday;
  • Redundancy and notice of termination entitlements for all employees except employees of small businesses with less than 15 employees (head count) with severance pay;
  • A fair work statement which must be given to all new employees.

What are Modern Awards?

From 1 January 2010 the new modern awards came into operation. These modern awards are based upon industry groups and apply to employees, unless the employee earns over $145,500.00 per annum by way of remuneration (indexed annually each July).

What is Work Health & Safety?

There are workplace safety obligations for both employers and employees. Currently each state and territory is responsible for making and enforcing the WH&S laws.

The WH&S laws are designed to ensure a safe workplace, minimise injury and workplace deaths. The WH&S laws set extremely high standards for employers. Any accident at work is considered a breach of the WH&S laws.

Is there a risk for directors and management?

Anecdotal evidence suggests that recent WH&S prosecutions are now focusing not only on the companies involved, but also the directors and any individuals involved in the management of the company or business, who are considered to be responsible for ensuring WH&S compliance. It must be remembered, there is strict liability and very little room for a successful defence to be launched to a prosecution Under the WH&S laws, fines can be imposed on the employer, its directors and those individuals.

SafeWork NSW will investigate any incident and it can result in prosecutions such as:

On 19 July 2016, a 32 year old worker suffered injuries to her toe when a forklift ran over her left foot.  SafeWork NSW investigated the accident and Williams Pressing & Packaging Services Pty Ltd (“WPPS”) was charged with breaching the WH&S laws. Two years later on 20 December 2018, WPPS was convicted and fined $60,000.

On 1 July 2015 a 47 year old visitor to a residential property suffered serious burns when an explosion and fireball occurred as a result of bitumen laying works conducted by CRS (NSW) Pty Ltd (“‘CRS”). Once again SafeWork NSW investigated resulting in CRS and its director being charged with breaching the WH&S laws. Almost two and a half years later on 3 November 2017 they were convicted and CRS was fined $160,000 and the director was fined $40,000.

What can you do?

As a business, you should implement and apply a  WH&S program that suits your particular business. Your WH&S program should:

  • involve representatives from all staff levels in the WH&S Committee;
  • review your workplace;
  • develop WH&S procedures and an WH&S policy to suit your workplace;
  • regularly review your workplace and WH&S policy and procedures.

If you need any assistance contact one of our lawyers at [email protected] or call 02 9439 5299 for a no-obligation discussion and for expert legal advice.