At i3Group, because we take care of managed payroll services, we are often witness to the movement of staff through businesses. And despite the best intentions of employers, they sometimes get caught up in unfair dismissal claims. In order to avoid these claims, and do the right thing by your employees, there are some rules and regulations that need to be complied with. If our years providing managed payroll services have taught us one thing – it’s always follow the rules!
In Australia, there are a number of rules around termination of employment which must be followed by both employers and employees. These rules are enforced by the Fair Work Ombudsman and compliance with all workplace laws and regulations is compulsory for businesses. For more information about avoiding the scrutiny of the Fair Work Ombudsman, read here.
According to the Ombudsman office, unfair dismissal is when an employee is dismissed from their job in a harsh, unjust or unreasonable manner. Federal anti-discrimination laws prohibit employers from dismissing an employee or selecting them for redundancy on the basis of personal characteristics. Before terminating any employment, employers should make themselves aware of workplace Anti-bullying laws implemented earlier this year. More information about the new anti-bullying laws can be found here. However, the Victorian Equal Opportunity & Human Rights Commission states that employers can dismiss employees if:
- work performance is unsatisfactory;
- employer has genuine financial and operational reasons.
In small businesses, the employer must follow a special set of rules under the Small Business Fair Dismissal Code in order to avoid unfair dismissal claims. If the employer follows the code and can provide evidence of this, the Fair Work Commission will deem the dismissal to be fair.
For most businesses, before terminating employment, an employer must give the employee written notice either by delivering it personally, mailing or delivering the notice to the employee’s last known address. In cases of serious misconduct such as theft, fraud, assault, or refusing to carry out a lawful and reasonable instruction that is part of the job, employers are not obligated to provide notice of dismissal. Employers are entitled to terminate an employee’s notice during a period of leave, but the correct amount of notice still needs to be given. With some exceptions (which can be found in detail here), periods for notice of dismissal are as follows:
If the period of employment is less than 1 year – 1 week
If the period of employment is 1-3 years – 2 weeks
If the period of employment is 3-5 years – 3 weeks
If the period of employment is over 5 years – 4 weeks
Employers have the option of paying out notice, meaning that the employee stops working for the business upon notice of dismissal and is instead paid the total amount that would have been earned if they worked until the end of their notice period including overtime, allowances and any other separately identifiable amounts.
If you’re an employer seeking further information and advice about dismissal, contact the Fair Work Commission on 1300 799 675 or visit https://www.fwc.gov.au/audience/employers. For a managed payroll serviceyou can trust, contact i3Group now on 1300 725 647 and find out why our clients rely on us to keep their managed payroll services running smoothly and efficiently.