Under the Fair Work Act, if an employee is dismissed in a “harsh, unjust or unreasonable” manner they may be awarded up to six month’s pay by the Fair Work Commission (FWC).
FWC hearings can be time-consuming, consume business resources and very stressful for all involved – they should be avoided. So here are our six tips for avoiding unfair dismissal claims.
1. Give the person a chance to improve
There are very few situations where you can sack a person on the spot. You need to explain what the person has done wrong and provide constructive criticism. Part of this is setting clear and genuine performance targets. If you feel it is appropriate you may wish to give the employee a warning; though contrary to popular belief there is no legal requirement for you to give an employee a specific number of warnings before you terminate their employment.
You should first meet with an underperforming employee to discuss the problem, and then devise a potential solution with them. Following this, clear performance goals should then be set and implemented with dates agreed for reconvening to discuss whether the proposed solution has been working.
2. Don’t abuse the process
Often employers dismiss someone because they don’t like their personality, rather than for performance reasons. This is a sure-fire way to land your business in trouble.
You will also need to be aware of the way other workers can abuse the complaints system against each other because they don’t like another worker or because they think they are a threat. A business has a right to dismiss a worker who is under-performing or behaving badly, not get rid of people who are not liked.
3. Allow the person to respond to any allegations
Any allegations about misconduct or under-performance should be made out clearly and in full to the employee.
It is important you are vigilant about spelling-out all the particular allegations of misconduct directly to the accused, as many employers are pinged in court for not making the allegations clear enough to the employee. The employee then needs to be given a chance to respond.
So really you need to articulate the allegations to the employee in writing, give them a chance to consider them and respond in writing. You may also need to make a time to have further discussions about it.
Even if you are planning to dismiss them, you still need to give them a chance and time to respond. You also need to genuinely consider their response.
4. Allow the person to have a support person present for any discussions related to the dismissal
Allowing the employee to bring a support person is yet another element of ‘procedural fairness’ or ‘natural justice’ which you have a legal obligation to apply in a dismissal.
Under the Fair Work Act, the FWC should consider whether you allowed the person to bring in a third party (be it a lawyer, union representative or friend) to discuss their performance issues or any other issues related to the dismissal when deciding whether or not to penalise an employer.
5. Be nice about it
Often people litigate in unfair dismissal because they feel angry, humiliated or under-appreciated because of the sacking. It may not be realistic to sugar-coat something as unpleasant as a dismissal, but the way you conduct the dismissal may have an impact on whether a person takes legal action.
Try to be nice and as non-vindictive as possible, even if you feel the person doesn’t really deserve that level of consideration.
Concentrate on the positives, wish them luck, give them notice and offer to help them find another job if you feel it is appropriate. Importantly, note that you are required to give an employee notice of their dismissal and the amount of notice required is based on the length of service of the employee.
6. Make sure it’s proportionate to the misconduct/poor performance
There are very few things which justify instant (also known as summary) dismissal. It is only fair for a small business employer to dismiss an employee without any notice or warning if they have been involved in theft, fraud, violence or serious breaches of workplace health and safety laws.
Whilst you do not need to show the person committed the breach ‘beyond a reasonable doubt’ it is helpful to avoiding legal sanctions if you report the matter to the police or to the health and safety regulator.
Make sure you avoid a FWC hearing if at all possible. If needs be, speak with an employment lawyer before making any decisions. The LegalVision team would be pleased to help!
You can help us (and help yourself)
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.