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Supporting the decision to terminate employment

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Changes to unfair dismissal laws from 1 July 2009 introduced a new legislated element to be considered in determining whether a termination is harsh, unjust or unreasonable.  This new element relates to an employee’s right to have a support person present at any meeting connected to termination of the employee’s employment.

All employers, irrespective of the size of their business, are now subject to claims of unfair dismissal.  Such claims are, however, subject to employees completing a legislated minimum employment period, and not being within one of the classes of employees excluded from making unfair dismissal claims (e.g. seasonal employees, employees terminated because genuine redundancy).

An unfair dismissal claim will be established where Fair Work Australia is able to make a finding that the termination was harsh, unjust or unreasonable.

In determining whether any termination of employment is harsh, unjust or unreasonable, Fair Work Australia must take into account:

  1. whether there was a valid reason for the termination
  2. whether the employee was notified of the reason
  3. whether the employee was given an opportunity to respond
  4. where the termination relates to unsatisfactory performance – whether the employee had been warned prior to the dismissal
  5. whether it was reasonable, in light of the size of the business or presence of human resource managers, for there to be termination of employment procedures in place and followed
  6. any other matters Fair Work Australia considers relevant; and now
  7. whether there was an unreasonable refusal by the employer to allow the employee to have a support person present to assist in any discussions relating to the termination.

The Australian Industrial Relations Commission, the predecessor to Fair Work Australia, has long considered the ability of an employee to have a support person present at investigatory and disciplinary meetings to be an important aspect of affording an employee procedural fairness.  This expectation has now been codified within the Fair Work Act.

In meeting obligations under this new requirement, all employers should:

  • give employees the opportunity to choose their own support person for any meeting in which matters are being discussed that may lead to the termination of employment
  • ask both the employee and their support person to maintain confidentiality of all matters discussed in any meeting
  • make a written note in the event that an employee themselves refuse the opportunity to have a support person present
  • have a company representative present at any meeting (in addition to the company representative who is conducting the interview) who can attest to the discussions that take place
  • not itself appoint a support person for the employee, particularly where the appointed support person holds a position within the company which is likely to mean that they will ‘side’ with the company

An employee’s chosen support person may only be refused by an employer if that refusal is reasonable.  Examples of where a refusal may be reasonable may include where an unreasonable delay would be caused by waiting for the chosen support person to be available or where the support person is disruptive to the meeting proceeding.

In the case of any termination of employment, it is critical that any responses provided by an employee are considered prior to proceeding with any termination of employment.  Even where an employee is accompanied by a support person, investigation and termination must not take place during the same meeting.

Until 1 January 2011, in the case of any business employing fewer than 15 equivalent full time employees, an employer is able to provide a complete defence to a claim of unfair dismissal where they can demonstrate that they have followed the Small Business Fair Dismissal Code.   Prior to executing any planned termination, employers are encouraged to complete the checklist and forward this to the Workplace Relations team for advice on whether the Small Business Fair Dismissal Code has been satisfied.

Following the reinstatement of unfair dismissal laws for businesses with less than 101 employees on 1 July 2009, there has been a notable increase in applications being made to Fair Work Australia.  Accordingly, it is critical that advice is sought to ensure that an appropriate procedure is followed prior to proceeding with any termination of employment.

For further assistance contact one of our Workplace Relations lawyers.

Author:  Katie Sweatman