What employers need to know when letting someone go
As the economy weakens, many businesses may be forced to re-assess their staffing needs, and tough decisions may need to be made to let an employee go.
A staff member may need to be let go because the business can no longer afford them, or perhaps they are just not performing to the required level. Whatever the reason for letting an employee go, employers should be careful not to open themselves up to a claim against them in the Fair Work Commission.
Where to Start?
There are many things that an employer should have regard to when considering what needs to be done to lawfully dismiss an employee:
1. Review Contract of Employment
The contract of employment which the employee entered into should be reviewed to check the notice period which is required to be given, and internal policies should be checked in relation to any compulsory performance management or dispute resolution provisions which must be followed.
2. Review Modern Award or Enterprise Agreement
Any modern award or enterprise agreement applicable to the employee should be reviewed.
3. National Employment Standards
The National Employment Standards should also be checked to ensure compliance.
Following Protocol
When an employer is considering firing someone, even if there are no official policies in relation to performance management, some protocols should be followed. These may include meeting with the employee to discuss their performance, and making a plan to monitor their performance. Make sure you clearly document any meetings you have with an employee about their performance or any disciplinary action.
Although going through this process may seem like a waste of time in some cases, adopting a transparent process with clear communication may help the employer protect itself against an unfair dismissal, unlawful termination, or general protections claim after terminating the employee.
The Difference Between Firing an Employee and Redundancy
It is also important to differentiate between firing an employee and making them redundant. It may be tempting for an employer to say that they are making someone redundant rather than firing them. This may be to spare the employee’s feelings, but will likely place you at a greater risk of an employee making an unfair dismissal claim.
A genuine redundancy can only be claimed if the work which was undertaken by the employee does not need to be done by anyone, reasonable efforts have been made to re-deploy the employee in another role appropriate to their expertise and pay expectations, and the provisions of any award or enterprise agreement have been followed. It is important to note that modern awards contain a mandatory consultation process which must be followed prior to making a position redundant.
Seeking advice about your obligations as an employer can often save a great deal of time and expense down the track, and protect the reputation of your business. Tisher Liner FC Law’s commercial and litigation teams can provide assistance with employment law issues of all descriptions.
For more information please contact Julia Reid or a member of our Employment Law team.
