A guide to terminations

Termination is a complicated area of HR. If you have decided that you can no longer work with a particular employee, it is a good idea to seek legal advice or advice from an HR professional before you initiate a termination process.

There are a number of situations where termination can occur, and each situation must be handled carefully to ensure compliance with complex employment laws.

Here is a brief guide to the different types of terminations.

Redundancy

Redundancy is when there is no longer a need for an employee’s role within the business. This might be due to restructuring, or a change in business direction on the part of the employer. When an employee is made redundant, there are certain rules regarding compensation, and entitlements. For redundancy to apply, the termination should be based on the operational needs of the business, rather than personal performance of the employee. The employer must follow the consultation requirements laid out in the NES, modern award or enterprise agreement, including any redeployment processes.

Summary dismissal

This is where an employee is dismissed with immediate effect for a serious breach or serious misconduct. Generally, if an employee is dismissed on a summary dismissal, they will forego any period of notice or financial compensation in lieu of notice. For example, if an employee is found guilty of theft, fraud, assault, serious bullying or harassment, they can be summarily dismissed without notice.

Although this type of dismissal can be done rapidly, it is important that a formal process is followed, and any allegations are investigated before the employee is dismissed.

Dismissal for a cause

Less serious than a summary dismissal, this is where an employee is dismissed for under-performance, or another issue, such as inappropriate behaviour. Leading up to this type of dismissal there is generally a disciplinary process of warnings and performance management to try to correct the issue.

Abandonment of employment

This type of dismissal occurs when an employee is absent from work for an extended period of time, without a reasonable excuse.

This can include situations where an employee does not return to work after a certain period of time, either after taking leave, or after walking off the job without having provided the employer with a reason for their absence. As an employer, if you wish to terminate an employee under abandonment of employment, you are required to demonstrate that you have followed a number of steps to try to get in contact with the employee before making the decision to terminate.

Termination by notice or agreement

This is when the employment is terminated by one party giving notice to another. Situations where this can arise include when an employee resigns, or if an employer informs a casual employee or contractor that they want to terminate their agreement.

Most termination arrangements come with a number of legal requirements, so to ensure you protect your business and your employees, it is important to ensure that you comply with all the mandatory requirements when you terminate an employee. These requirements include notice provisions, which are set out in the contract of employment and any other necessary steps that are listed in the NES, relevant award or EBA requirements.

Failing to comply can leave your business at risk of legal action by terminated employees, along with financial penalties. If you are considering terminating an employee, make sure you choose the most appropriate termination arrangement, and make yourself aware of the legal requirements that go along with that particular type of termination.

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