Dismissing an employee is sometimes a necessary part of the manager’s role and there usually is a degree of tension and discomfort with the process. Unless it is done correctly and fairly there can be serious repercussions for the individuals and the company. In a recent article, PCC Employment Lawyers provide a seven step checklist to ensure that the process is fair and reasonable, and if necessary defendable in court. Done correctly, you can greatly reduce the potential for a claim and, if one arises, greatly reduce the chances of it succeeding.
In brief, those seven steps are as follows. (See full article for more details)
- Consider the reason for dismissal
It is unlawful to dismiss on grounds that are discriminatory, or otherwise ‘prohibited’ grounds, even if that is only part of the reason. And, for an employee covered by unfair dismissal legislation, the reason for dismissal also needs to be ‘valid’, i.e. one that is ‘sound, defensible or well founded’.The valid reason can either relate to either an employee’s:
- conduct – something the employee has done; or
- capacity – the employee’s ability to do the job for which they were employed.
Please refer to the original article for more details on Conduct and Capacity.
- Provide the employee with notice of the reason for the possible dismissal
For an employee with access to an unfair dismissal remedy, it is essential that employer notifies them of the concerns that they have relating to the employee’s capacity or conduct. Ideally, employees should be notified in writing of the specific reasons that their job is at risk. This may either be the performance or capacity concerns, or may be some specific allegations relating to misconduct.
- Give the employee a genuine opportunity to respond
After the employee is notified, they should be given an opportunity to respond to these concerns or allegations. It is vital the employee has a genuine opportunity to respond prior to making the decision to dismiss. It is not enough to merely go through the motions. Even if there is ultimately a valid reason to terminate the employment, a failure to provide this opportunity to an employee may render a dismissal ‘unreasonable’.
- How to communicate the dismissal to the employee?
The Fair Work Commission has made it clear that there are significant legal risks of communicating a dismissal by written or electronic means, unless the employee has been given ample opportunities to meet face-to-face and refuses to meet. In any event, providing a courteous and open forum to communicate the employer’s decision greatly decreases the potential for employees to be ‘aggrieved’ enough by the outcome to consider a legal challenge.
It is also recommended that employers provide the employee with an opportunity to have a support person present. Contrary to common belief, the Fair Work Act does not create a positive obligation to provide this.
- If the reason for dismissal is unsatisfactory performance has the employee had a warning?
If the employee has access to an unfair dismissal remedy, and the valid reason for dismissal relates to unsatisfactory performance, employees should be warned that their performance is below the required standard. It should be in writing, and should clearly indicate what improvements are required, and set out that dismissal may occur if those requirements are not met. This message needs to be explicit, to have any legal value. A suggestion, or implication, of possible dismissal is not enough.
- Is the dismissal ‘Harsh’ in the circumstances?
Employers should be aware that the following factors may support a finding that the dismissal was ‘harsh’ for the purposes of unfair dismissal:
- there will be a significant personal or economic impact on the employee, such as if the employee is unlikely or unable to find alternative employment;
- the employee had a long length of service, especially where that service was unblemished or of a high quality; and/or
- an employee is dismissed for conduct when other employees engaged in comparable conduct and faced lighter penalties.
Once these factors are considered, it may be necessary to assess whether the consequences of dismissal is actually disproportionate to the gravity of the misconduct or performance concern, and to consider whether another option (such as final warning) may be more appropriate. In our experience, it is only in extreme cases where this consideration becomes relevant, and seeking external advice may be desirable before making the decision alone particularly where an employee has a very long period of service.
- What Notice is Required?
Consider how much notice is required. Only in ‘serious misconduct’ cases is instant dismissal legally justified. The minimum notice period will either be dictated by section 117 of the Fair Work Act 2009 (Cth), and will in part depend on the employee’s age and length of service, or will be defined by the contract of employment – whichever is the longer.
Consider whether actual notice should be worked out by the employee, or whether it should be paid to them as a financial payment in lieu of notice. In many instances, for the protection of the employer’s various interests, it may be commercially preferable to remove the employee straight away, and payment in lieu of notice may be more desirable in this event.