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Employee terminations at your business

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A guide to making the process fair all round

Taking the decision to terminate an employee’s time with your business is never easy. However, if the performance management process hasn’t worked and an employee continues not to meet their benchmarks, it can sometimes be the last option left open to you as a business owner or manager.

Our news post on employee performance management is full of tips on how to go about things the right way. Once you’ve done so, and decided that termination is the only way forward, there are steps you can take to make the process straightforward and equitable.

We asked MDL’s Employment Law team to give us their tips for making the termination process as transparent, efficient, and fair as possible.

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First steps towards termination  

When you’re terminating an employee, remember that it’s all about the process. As much as you can, take emotion out of the equation, and ensure that every box has been ticked and procedural fairness has been followed.

It’s important to bear in mind that with workplace terminations “A Fair Go All Round” is the basis for legal precedents.

Common sense should be your guiding principle. When you’re considering whether to terminate an employee, ask yourself, “Does this feel right to me?” If the answer is no, it’s a good sign that there will probably be legislation that says you are in the wrong. 

However, if you’re sure that you’ve followed the correct procedure, and you have decided that termination is the right way to move forward, there is a process you can follow to make termination as stress-free as possible.

Your pre-termination checklist

To ensure your termination meets the “fair go” test, ask yourself:

  • Has the employee been informed about what they are being terminated for?

Preferably this should be done both face-to-face in a meeting, and in writing.

  • Has the employee had the opportunity to respond to the allegations?

Again, it’s best if this is done both face-to-face and in writing to ensure transparency.

  • Have you given sufficient consideration to all the issues — and investigated further if necessary?

Of course, termination is final, so make sure you have the complete picture of the situation before making your final decision.

  • Have you complied with your business’s performance management policy?

Ensuring you’ve “ticked all the boxes” can help ensure fairness for your employee and your business.  

If you’ve answered ‘yes’ to all the questions above, and you’ve decided you definitely wish to follow through with termination, you can move on to the actual termination process.

The steps you need to take in the termination process

1) Provide a termination letter in writing

It sounds like common sense, but make sure you provide the employee with a written letter of termination.

2) Give appropriate notice

Usually, you will need to provide a notice period as outlined in the employee’s contract. However, in cases of serious misconduct, think about whether a notice period is necessary or whether you are justified in finishing up the employee immediately.

3) Pay appropriate entitlements to the date of termination

Take care to ensure you fully pay out the employee with all their entitlements, including annual leave, superannuation, any applicable long service leave, and salary for their notice period.

4) Remember an employee has 21 days to bring an unfair dismissal complaint

If you’ve followed the correct performance management and termination processes, it’s unlikely that you’ll have to worry about an unfair dismissal compliant. But it’s worth remembering that the terminated employee has a deadline of 21 days to bring their complaint.

Need advice on how to handle terminations at your business?

If you’d like to know more about handling employee terminations at your business, MDL’s Employment Law team are here to help.

To discuss your situation, contact McCarthy Durie Lawyers on 07 3370 5100 or fill out the contact form here.

We have assembled a highly experienced, capable team of legal practitioners, committed to delivering you expertise across all legal services. Find your local office: