Where an employer dismisses a member of staff there will always be a level of risk involved.
We can help safeguard your business from the risk of claims by guiding you through termination processes which will give you the best chance of successfully defending any claims.
We can also help you understand the legal obligations that arise when terminating a member of staff including whether an obligation to provide a period of notice arises (and if so, how much) and obligations to make termination payments.
A number of claims are available to employees if their employment has been unlawfully terminated. These include:
- Unfair dismissal
- General protections / adverse action
- Breach of contract
- Wrongful dismissal / wrongful termination (ie a claim that arises where the employer has breached the employee’s contractual notice period)
Employers should be aware that an employee who resigns can also bring these claims where they allege that the employer put them in a situation where they were forced to, or had no choice but to resign (in law this is called a constructive dismissal).
To guard against the risk of unlawful termination claims we would generally advise employers to follow an employee termination process.
Employee termination process
In most situations it is generally advisable for employers to follow some sort of process when terminating the employment of an employee.
For employees who are eligible to bring an unfair dismissal claim, it is usually the case that “procedural fairness” should be afforded to the employee (notably the opportunity for an employee to respond to any conduct or performance issues in a formal meeting accompanied by a support person, before a final decision on termination is taken).
But even for employees who cannot bring a claim in unfair dismissal (because, for example, they earn over the high income threshold or do not have sufficient service), it is usually prudent for employers to explain the reason for the termination of employment to the employee (and to set out the reason in a termination of employment letter) so as to reduce the risk that an argument will be made that the termination was for another (unlawful) reason.
Where an employee’s employment is being terminated due to redundancy, it is advisable that employers follow a redundancy process to reduce the risk of claims.
Employers should also make sure they understand their obligations to provide a period of notice (and the length of that notice period) and in what circumstances they are entitled to summarily dismiss an employee (ie dismissal without notice).
The law in relation to summary dismissal generally operates so that an employer is only able to instantly dismiss an employee who would ordinarily be entitled to a period of notice when the employee has committed “serious misconduct” (as that phrase is defined in legislation). This does not alter the need to follow a procedurally fair process before the employee is dismissed.
If you require advice regarding termination of employment, please contact EI Legal at any time. A brief conversation on the processes to be followed before a final decision to terminate is taken can often make a huge difference in the likelihood of a successful claim being brought against the business.
Employment termination payments
The law regarding employment termination payments is complex. At EI Legal we regularly advise clients on obligations such as redundancy pay, paying out annual leave and long service leave, payments in lieu of notice, whether superannuation is payable on any such payments and the circumstances in which employment termination payments can be withheld.
If you need assistance in understanding your obligations or calculating an employment termination payment, please contact our offices.
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