Scott: Welcome to Employsure Essentials, our series that covers the big issues in small business. I’m Scott McGrath, and it’s great to be back for Episode Two. This time with our expert advisor, Renee Turpin. Today I’m going to chat with Renee about the hot topics of termination, resignation, and dismissal. Renee will cover getting the process right and what employers can do to avoid any claim of unfair dismissal. Let’s get it started.
Hi Renee, thanks for coming.
Renee: Thanks for having me, Scott.
Scott: Today we’re going to have a bit of a chat about termination, dismissal, and resignation. Does it keep you guys busy?
Renee: Absolutely. It’s something that we deal with day in, day out in the advice team.
Scott: Okay, so let’s break it down. What is termination? What is dismissal? What’s resignation? What are we talking about?
Renee: We use termination as a bit of an umbrella term so capture the end of an employment relationship. An employee can be dismissed, which is usually initiated by the employer, or an employee can resign, obviously at the initiation of the employee.
Scott: Okay, lot to talk about there. Let’s break it down. Dismissal. What are we talking about? What’s the process?
Renee: When we’re looking at dismissing an employee, we first need a valid reason, whether that’s ongoing performance or conduct issues or a very serious breach of conduct.
Scott: Okay, so valid reasons, say … Let’s just hypothetical here. I hate the way Bob does his hair on a Monday, can I ask him to leave?
Renee: Unfortunately, it’s not quite that easy. That wouldn’t be seen as a valid reason and would leave a business at risk of an unfair dismissal claim.
Scott: Let’s move on to resignation. This is as you just said an employee leaving his spot. Is it the same process or …?
Renee: There’s different types of resignations. An employee could resign quite formally with a letter or they could resign in more so of a heat of the moment verbal resignation.
Scott: Okay. The notice period. An employee has decided they’re going to go, how do we know how long they have to tell us or what’s the process there for an employer?
Renee: When an employee resigns, they’re required to give notice just like an employer is required to give notice if they’re dismissing an employee, and that notice is defined by the employee’s length of service as per the Fair Work Act 2009. That notice period may be changed by the relevant Modern Award or the employee’s contract of employment.
Scott: Okay, so at the end of the notice period, is that when the final payment is due? I mean, we hear that term a lot. Does it vary when that payment is due or …?
Renee: It’ll likely vary, and again, dependent upon the relevant Modern Award. For example, the Building and Construction General On Site Award 2010, requires that that final payment be processed on the employee’s last day of employment.
Scott: Okay. Let’s talk about worst case scenario here. Something’s gone wrong, serious misconduct, I’ve had enough, this person’s been dangerous or whatever the case may be, can I walk them out the door?
Renee: In that type of situation, it would be very reasonable to exit that employee from the business immediately given the circumstances. However, it’s not always necessary to go to those extreme lengths, whether it’s an actual resignation or normal dismissal.
Scott: Okay, so might be a bit over the top sometimes.
Renee: Sometimes, yes.
Scott: Okay, let’s flip it then. An employee on a Thursday leaves an hour or so early, decides they’ve had enough, they just go. They don’t come back in on the Friday, looks a bit like a resignation, what do we do? What does the employer do there?
Renee: We would call that a heat of the moment resignation and if the employer was just to accept that as it is, it may not stand if tested by the Fair Work Commission, so what we’d be advising to do is the employer to contact the employee and get them to confirm their intentions.
Scott: Okay, so even though everything looks like a resignation, we just want to get it cleared up.
Scott: Document it, make sure we’re trying everything to make sure we’re on the same page.
Renee: Documentation is very important.
Scott: Renee, what are the tips? You were saying that this is something that keeps you guys busy. Clearly employers probably have their own processes but they might not be 100% right. What are the watch outs? What can employers trip over? What should they be doing?
Renee: Documentation is key, whether it’s escalating a series of written warnings or continued failed performance management plans. Documentation is very important. Also in regards to getting that resignation in writing. Another area that’s very important is to always check the clauses in the relevant Modern Award or the employee’s contract.
Scott: Okay, so get the documentation down pat, get it all covered, and make sure everything in the Award or the agreement is being followed through.
Scott: Then the employee is aware the employer has done all their part.
Renee: Everyone’s different in regards to terminations and we’d always be advising to call the advice team at Employsure to ensure that it’s processed correctly the first time.
Scott: Okay. Get it right and all the headaches will go away.
Scott: Renee, thanks for your time.
Renee: My pleasure.
Scott: Well, there’s the essentials. Before you march Bob out the door for his bad haircut, get the process right. As Renee said, every termination is different and employers need to get it right and document the details. If you need help on anything Renee covered, contact Employsure’s advice line on 1-300-651-415. Tune in again next time where we’ll have more essentials for your business. This is Scott McGrath from Employsure and I look forward to your company next episode.