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Different Types of Dismissal

Published August 05, 2020 Author: Employsure
employee and employer discuss dismissal

Employers in Australia would be well aware of the potential for employees or ex-employees to lodge an unfair dismissal claim – and employers may be thinking, is there a ‘fair’ reason for dismissal?

If you are asking that question, the answer is that there are no legislated ‘fair’ reasons for dismissal. However, to help give employers a better understanding of dismissals, and their rights under workplace relations, here are four different possible reasons for dismissal.

Redundancy

A redundancy can occur if a business is restructuring, new technology fulfils the job obligations of an employee or role, the business is relocating or closing down, or there is a prolonged and significant downturn in business.  The employee’s job is no longer necessary for the business, or technology makes the role unnecessary.

Redundancies is one of the most complex dismissal method in Australian workplace relations legislation. There is a lot of criteria that an employer has to fulfill to ensure before going through with a redundancy.

On top of that, redundancies can be very costly, as employers are required* to pay redundancy pay in some circumstances, which is based on the length of continuous service that the employee has had with their employer.

*employers can apply to the Fair Work Commission to reduce their redundancy pay, but only in certain circumstances and when certain criteria is met.

Misconduct

Poor behaviour can consist of be being late or absent, intentionally underperforming, or acting inappropriately in the workplace.  If an employee repeatedly displays poor behaviour, an employer can begin a disciplinary procedure against them.

Misconduct covers a range of situations but is generally seen as behaviour which is inconsistent with the obligations and duties owed by an employee to their employer. For example, insubordination, refusal to complete a lawful or reasonable management direction, failure to adhere to Company policy, inappropriate or rude behaviour.

If you believe an employee is behaving poorly, an employer must give them an opportunity to improve their behaviour (however, this opportunity does not have to be extensive and will depend on the seriousness of the repeated poor behaviour). This may consist of giving a verbal or written warning, and at all times an employer must be fair and reasonable during the disciplinary process.

If an employee keeps behaving poorly – that is, after you’ve given them a warning (or two), and after you’ve given them an opportunity to improve their conduct – you may have grounds to dismiss them for repeated poor behaviour.

Serious Misconduct

Serious misconduct is behaviour in the workplace that is considered a serious breach of the employment agreement, an illegal or dangerous activity. If an act of gross misconduct is deemed serious enough – even for a first offence – the employee found guilty may be dismissed without notice or pay in lieu of notice.

Serious misconduct involves an employee deliberately behaving in a way that is inconsistent with the continuation of their employment. Examples of this include: theft, fraud, assault, or intoxication.

Fair Work Regulations define serious misconduct, amongst other things, as behaviour that causes serious and imminent risk to the reputation or profits of the business or health and safety of another person, or is deliberate behaviour inconsistent with continuing the employment. Usually, it means theft, fraud, assault, or intoxication at work.

Poor Performance

Employers hire employees to perform a role; it is reasonable that an employer may have second thoughts about continuing to employ them when they don’t meet the expectations of that role.

If an employee is not meeting the performance standards required for the job, including missing their Key Performance Indicators (KPIs), then an employer may be able to initiate a performance management process.

However, like misconduct, employers must give the employee a written warning and chance to improve their performance before termination can occur.  Furthermore, an employer’s concerns about an employee’s performance must be fair and reasonable.

Capacity

Like above, employers hire employees to perform a role. If an employee is incapable, or lacks the ability to perform the role, then this may give an employer capacity to initiate a show cause process.

But what counts as being ‘incapable’ or ‘lacking the ability to perform the role’? For instance, if an employee contracts an illness or injury that prevents them from working or carrying out their role, then this may be a valid reason to carry out a dismissal due to medical incapacity after certain protections expire.

Another example may be a worker whose role requires them to drive a car to visit clients or prospects; if they lose their ability to drive or driving licence, then they do not have the capacity to perform their role.

Other than physical, capacity also includes characteristics such as leadership. The FWC lists an example of a branch manager that was dismissed due to not being able to turn around their underperforming branch. It was found that the manager lacked the necessary leadership skills to perform their job.

Before Making A Dismissal

It is important for employers to keep in mind and ensure a few general things before making a dismissal. These include:

  • Having a fair and reasonable reason for dismissal relating to the employee’s conduct or capacity (employers need to ask themselves: is the dismissal harsh, unfair or unreasonable?)
  • Having a fair and reasonable disciplinary or performance management procedure (i.e. it includes a reasonable chance for the employee to improve, except in the case of serious misconduct)
  • Considering redeploying the employee to another role, if possible

A termination may be deemed harsh, unjust or unreasonable if the reason for the termination is unsatisfactory or a fair process was not followed.  

When dismissing employees, employers in general must have a valid reason, go through a fair process, and be clear and consistent as to their reasons for dismissing the employee

Employers must also keep in mind that each dismissal is different from another, and that the circumstances regarding every employment relationship are of utmost importance. Furthermore, the information in this article is of a general nature; the Modern Award(s), Enterprise Bargaining Agreements or contracts applicable to your business may have different provisions.

Facing an Unfair Dismissal Claim? This Guide Will Set Out What to Expect

If you find yourself having to front an unfair dismissal claim, you probably have many questions. This guide aims to give you some peace-of-mind by outlining different aspects of an unfair dismissal dispute.

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