As an Australian business owner or employer, you know there’s a lot to keep track of. From dealing with customers or clients to payroll and taxes, it can be tough to keep your head above water. But there’s one thing you should never forget – you can’t just verbally terminate an employee.
That’s right, no matter how much you may be tempted to give your employee the pink slip over the phone or in the hallway, you’re legally obligated to give them written notice of termination.
So why is verbal notice of termination not enough? Good question.
Let’s delve into the legal requirements for giving proper notice of termination in Australia and explore the consequences of failing to do so.
Please note that this is general information and does not constitute advice. If you are considering terminating an employee, please consult a qualified employment relations professional.
What does the law say?
As an Australian business owner or employer, it’s important to be aware of your legal obligations when terminating an employee. One of the most important things to know is that verbal notice of termination is not enough. Under Australian employment law, employers must give employees written notice of termination.
Section 117 of the Fair Work Act 2009 (Cth) states that an employer must not terminate an employee’s employment unless the employer has given the employee written notice of the termination date. This requirement applies to all employees, regardless of their age, employment status, or length of service.
The written notice of termination must be clear and must specify the employee’s last day of employment. Crucially, the notice period must start on the day the employee receives the written notice, not the day it is given/sent.
Are there other reasons to avoid verbal notice of termination?
Verbal notice can be easily misinterpreted, and it can leave employees feeling confused and vulnerable. Written notice of termination isn’t just a legal requirement, it’s also the right thing to do.
Additionally, verbal notice of termination doesn’t give employees enough time to prepare for their departure. They need time to wrap up their projects, prepare a handover for their replacement, and say goodbye to their colleagues (not to mention start a job hunt!).
Are there any exceptions?
There are some exceptions to the requirement for written notice of termination. For example, employers don’t need to give written notice if the employee is terminated for serious misconduct, such as theft or violence. Additionally, employers don’t need to give written notice to casual employees, who also have the freedom to leave an employer without any notice.
But for the most part, employers are required to give employees written notice of termination. So, next time you’re feeling tempted to give your employee the verbal boot, take a deep breath, hold back on the urge, and make sure you follow a process that won’t land you in trouble.
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Consequences of failing to give written notice of termination
If an employer fails to give an employee written notice of termination, the employee may be entitled to make an unfair dismissal claim to the Fair Work Commission (FWC). If the FWC finds that the employee was unfairly dismissed, it may order the employer to reinstate the employee, pay compensation, or both.
In addition, the employee may also be able to take the employer to court for breach of contract. If the court finds that the employer breached the employee’s contract of employment, it may order the employer to pay damages to the employee.
Tips for giving written notice of termination
If you want to avoid claims and financial penalties, it’s crucial to follow a fair and compliant termination process, including giving formal written notice.
Here are some tips for giving written notice of termination in a fair and professional manner:
Be clear and unambiguous in your wording. State the employee’s last day of employment and the reason for termination.
Give the employee the notice period they are entitled to under their employment contract or the Fair Work Act.
Meet with the employee in person to give them the notice of termination. This will give you an opportunity to answer any questions they may have and provide them with any support they may need.
Offer the employee the opportunity to have a support person present during the meeting.
Be respectful and compassionate when giving the employee notice of termination. Remember that this is a difficult time for them, so even if they lose their cool, don’t lose yours.
Example of a written notice of termination
The following is an example of a written notice of termination:
To: [Employee’s name] From: [Your name] Date: [Today’s date]
Subject: Notice of termination of employment
Dear [Employee’s name],
This letter is to inform you that your employment with [Company name] is terminated, effective [Employee’s last day of employment].
The reason for your termination is [Reason for termination].
You are entitled to [Number] weeks’ notice of termination under [your employment contract/the Fair Work Act].
If you have any questions or concerns, please do not hesitate to contact me.
Sincerely, [Your name]
Although most business owners would prefer to avoid it, terminating an employee is an unavoidable part of running a company. Whether it’s because of underperformance or misconduct, or the business needs to tighten its belt financially, you’ll probably have to let someone go at some stage.
Irrespective of the reason, you need to follow the right steps, treat the person with dignity and respect, and take measures to keep your business out of hot water.
To reiterate, verbal notice of termination isn’t normally enough in Australia. In most cases, employers have to give employees written notice of termination. If in doubt, it’s always advisable to seek out expert advice.
By using the tips above, you can give written notice of termination in an appropriate way that can help you avoid claims for unfair dismissal or breach of contract.
On a personal level, it’s important to remain compassionate and humane, no matter how testing the circumstances might be. This is going to be a tough time for them, so try to be as empathetic and supportive as possible. For the sake of everyone involved, don’t let the relationship end on a bad note!
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Before you dismiss an employee, make sure you understand your obligations and follow the correct procedure. Call our FREE Advice Line on 1300 651 415 to get your questions around staff management answered.