Letting go of an employee can be uncomfortable, but navigating the process with respect and professionalism is crucial for both parties. This becomes even more important for small and medium-sized businesses, where tight-knit teams often feel more like family.
The termination or dismissal process requires meticulous attention to detail, a deep understanding of legal obligations and human empathy. It’s a situation that no employer relishes, yet it’s sometimes necessary.
Below are 15 steps designed to guide employers through the process with dignity, legality, and respect.
1. Ensure solid groundwork
If you need to terminate an employee, thorough preparation is key. Work with human resources to build a paper trail early on — document all the details of the employee's performance issues, including specific examples, dates, and conversations. Review the employee's file and ensure that any issues have been clearly communicated beforehand.
2. Adhere to legal standards
Familiarise yourself with the Fair Work Act 2009 and any relevant employment agreements or awards. Ensuring compliance with these standards is crucial to avoid legal issues and damage to the company's reputation.
General legal obligations
Fair dismissal: The termination must be for a "fair" reason, such as performance issues or misconduct.
Procedural fairness: You must follow a fair process, including providing warnings, opportunities to improve and a chance to respond to allegations.
Notice of termination: You must provide written notice of termination based on the employee's length of service.
Payment entitlements: You must pay the employee all their accrued entitlements, including annual leave, sick leave, and long service leave.
Records: You must keep accurate records of the termination process, including reasons for the decision, warnings, and communication with the employee.
Additional considerations:
Discrimination: It is illegal to terminate someone based on prohibited discrimination grounds, such as race, gender, age or disability.
Unions: If the employee is a union member, you may need to follow specific procedures outlined in their enterprise agreement.
3. Choose an appropriate setting
Ideally, if you need to fire employees, this should be a face-to-face meeting in a private and neutral space. This respects the employee's privacy and helps maintain a professional atmosphere while delivering difficult news. Consider the employee's physical needs and ensure the chosen location is accessible if necessary. Firing a remote employee virtually requires extra sensitivity and planning to ensure a respectful and professional process.
4. Communicate clearly and kindly
Throughout the process, prioritise open and honest communication with the team member. Address poor job performance concerns early and provide opportunities for improvement. Offer constructive feedback and coaching and document your efforts. Avoid jargon and be honest about the reasons behind the dismissal.
5. Detail the specifics
Practice what you'll say, focusing on delivering the news clearly and concisely. Provide concrete examples of why the dismissal is occurring, referencing documented instances where expectations were not met. This could include poor performance or misconduct that breaches company policy, like misuse of company property or unethical behaviour. Anticipate potential questions and have answers prepared.
6. Extend a helping hand
Offer support where possible, such as references or assistance in finding new employment, acknowledging the individual’s contributions despite the dismissal.
7. Conduct with respect
Maintain a respectful and professional demeanour throughout the meeting. Acknowledge the employee's efforts and thank them for their service.
8. Keep the interaction concise
Aim for a brief yet comprehensive meeting, covering all necessary aspects without prolonging the discomfort for both parties involved.
9. Be prepared for emotional responses
Firing is stressful, and even the most professional employee may react emotionally. Have tissues, water, and support available, and be prepared to listen empathetically while remaining firm in your decision and provide clear next steps.
10. Manage departure with dignity
If the employee is to leave immediately, ensure this process is conducted with respect, safeguarding their dignity and privacy. Plan logistics beforehand, such as who will inform the team and collect company property. Having clear procedures minimises confusion and anxiety for the employee.
11. Promptly process final payments
Calculate and deliver any final pay and accrued entitlements owed to the former employee, including salary and wages up to the termination date, including overtime, penalty rates and allowances, accrued annual leave and any applicable long service leave, depending on state/territory legislation and employee eligibility.
12. Inform the team appropriately
Communicate with other employees in a way that respects the dismissed employee's privacy while addressing any impacts on workflow or morale.
Understand that your team may have mixed emotions, including worry, sadness, or confusion. Address these concerns empathetically and be open to questions. If it's relevant, clarify that this is an isolated incident and reassure other employees about their own standing within the company. Be open to discussions and offer support to anyone struggling with the change.
13. Reflect and learn
After the dismissal, evaluate the process to identify any lessons learned, aiming for continuous improvement in handling similar matters. Engage with HR professionals to ensure your approach remains aligned with best practices and legal requirements.
14. Consult legal experts when in doubt
Due to the complexities involved, it is strongly recommended to consult with an employment lawyer or HR professional before terminating an employee in Australia. They can advise you on your specific legal obligations based on the employee's circumstances and your business situation. Refer to trusted sources like the Fair Work Ombudsman, Fair Work Commission and the National Employment Standards.
15. Document everything
Maintain thorough records of the entire process, from performance reviews to the dismissal meeting, safeguarding against potential legal challenges.
Bonus tips for a smooth employee dismissal
Firing an employee is never an enjoyable experience, but here are a few more tips to make the process less painful for everyone.
Handling difficult conversations and risks
Practice empathetic listening
During the dismissal conversation, actively listen to the employee’s response. This not only aids in maintaining a calm atmosphere but also ensures that any final queries they have are addressed respectfully.
Avoid surprises
Ensure that the dismissal does not come as a surprise. There should be a clear trail of feedback, performance reviews and warnings that led to this point, allowing the employee to understand the trajectory that has resulted in the dismissal.
Fostering a supportive transition
Provide transition services:
Where possible, offering support such as outplacement services can greatly assist the departing employee in their transition, showcasing the organisation's commitment to their well-being beyond employment.
Clarify the narrative:
Help the employee understand how to explain their departure in future job interviews, providing them with a narrative that does not unduly harm their career prospects.
Legal safeguards and ethical considerations
Review non-disclosure agreements (NDAs) and non-compete clauses:
Ensure that any NDAs or non-compete clauses are reviewed and clearly explained to the terminated employee, balancing legal safeguards with fairness.
Ethical exit strategies:
Consider the broader impact of the dismissal on the employee's career and well-being. Aim for an exit strategy that is as positive as possible under the circumstances, reflecting the organisation's values.
Employsure: Empowering leaders and protecting workplaces
The journey through an employee dismissal offers an opportunity for growth, learning, and refinement of leadership practices. It underscores the importance of a thoughtful, legally compliant approach that respects the dignity of all involved.
At Employsure, we understand the weight of these moments and the importance of handling them with the utmost care and professionalism. Whether you're seeking guidance on legal compliance, best practices for conducting dismissals, or support in maintaining a positive workplace culture, our team of experts is here to assist.
Frequently Asked Questions
What are the legal grounds for firing someone in Australia?
Under the Fair Work Act 2009, you can only fire someone for "fair" reasons, such as:
- Performance issues: Poor performance should be documented, warned, and given improvement opportunities.
- Misconduct: Serious breach of company policy or code of conduct.
- Capacity issues: Genuine inability to perform the job.
What’s the difference between firing someone and redundancy?
Firing occurs when an employee's poor performance or conduct justifies ending their employment. This could be due to poor performance, misconduct, or disciplinary issues.
Redundancy occurs when the employee's role is no longer needed due to operational changes, not their individual performance. Examples include restructuring, outsourcing or technology advancements.
What notice period does an employee need in Australia?
The minimum notice period you need to give an employee when firing them in Australia depends on their length of service. This could also be affected by an award, employment contract or enterprise agreement, so it’s important to check first.
- 1 week: If they have been employed for a year or less.
- 2 weeks: If they have been employed for more than one year to less than 3 years
- 3 weeks: If they have been employed for 3 years to less than 5 years.
- 4 weeks: If they have been employed for more than 5 years.
Do I need to offer severance pay if I fire someone?
When firing someone for performance issues or misconduct, there is no legal requirement to offer severance pay to a terminated employee beyond accrued entitlements (unpaid wages, annual leave, sick leave). However, offering severance pay can be part of negotiations during the termination process or a gesture of goodwill.
What are the employee entitlements for termination in Australia?
When terminating an employee in Australia, they're entitled to specific payments and leave accruals:
Mandatory entitlements:
- Accrued wages and salaries: Up to the termination date, including overtime, penalty rates and allowances.
- Annual leave: Unpaid and accrued annual leave remaining unused.
Additional potential entitlements:
- Sick leave: Paying out unused sick leave depends on company policies, employment contracts and industrial agreements.
- Long service leave: Eligibility varies based on state/territory legislation and employee service length.
- Redundancy pay: May apply if an employee is terminated due to operational changes resulting in their role being eliminated.
How do I avoid an unfair dismissal claim?
In Australia, navigating terminations requires understanding "fair dismissal" principles to avoid potential legal issues. Ensure the reason for firing is fair and valid, aligned with the Fair Work Act 2009, such as performance issues, misconduct, or capacity issues. Follow a fair and consistent process, including providing them with an opportunity to respond to the allegations or concerns.
What if the employee is part of a union?
In Australia, if you're a business owner firing someone who is part of a union, you must adhere to both general employment law and their specific union agreement. This agreement outlines specific procedures and potential additional entitlements related to termination.
An employment lawyer or HR professional specialising in unionised workplaces can guide you through the specific requirements and complexities of your situation.
What if the employee reacts emotionally?
Firing an employee, even professionally and following legal guidelines, can trigger emotional reactions. Anticipate potential reactions and have tissues, water, and support readily available. Stay calm and respectful, set boundaries, and maintain confidentiality. If the reaction becomes disruptive or threatening, seek assistance from a HR representative, security, or legal counsel.
What termination records do I need to keep?
When firing an employee, you should keep the following documents:
- Written termination documentation: Notice of termination and meeting records, signed agreements.
- Correspondence: Emails, text messages and letters related to the termination process.
- Performance documentation: Warnings, improvement plans and relevant performance reviews.
- Payment records: Final pay slips, calculations, and proof of payment.
- Leave records: Records of accrued and used leave entitlements.
How long do I need to keep termination records?
The Fair Work Act 2009 requires keeping records for seven years related to employee entitlements, including termination payments, leave accruals and calculations. Some states/territories have additional record-keeping requirements for termination, so check your local laws.
If you anticipate potential legal challenges (unfair dismissal claims), it's advisable to keep records for longer. Some experts recommend up to 10 years.
What are some examples of misconduct?
Some examples of misconduct that may lead to firing employees may include:
- Theft, fraud, or embezzlement: Misappropriating company funds, property or confidential information or falsifying company records.
- Violence, aggression, or threats: Physically or verbally assaulting colleagues, clients or managers.
- Sexual harassment: Engaging in unwelcome sexual advances, requests for sexual favours or other offensive conduct of a sexual nature that creates a hostile work environment.
- Sexual discrimination: Treating someone differently or unfavourably because of their sex, gender identity or sexual orientation in areas like hiring, promotion or pay.
- Harassment or discrimination: Unwelcome behaviour based on protected characteristics like race, gender, or disability.
- Breach of company policies: Serious and wilful violations of established policies, like drug or alcohol use at work and safety protocol breaches.
- Gross negligence: Causing significant harm to the company or others due to reckless disregard for responsibilities.
- Company property misuse: Personal use of company assets like vehicles, equipment, or technology beyond acceptable limits.
How to fire a remote employee virtually
Many companies today have remote employees working in different locations. If you need to fire a remote staff member, it's important to understand local laws and your company's policies for remote terminations. Use a secure video conferencing platform that allows private conversation and clear communication and be mindful of time zones — choose a neutral time that respects the employee's schedule. Consider having a manager or HR representative present for support and to uphold accountability.
