Pub­li­ca­tions

The dos and don’ts when ter­mi­nat­ing employees


In Brief

How you ter­mi­nate an employ­ee can be a mine­field, with many employ­ers find­ing them­selves before the Fair Work Com­mis­sion because they got it wrong. A claim for unfair dis­missal is an acces­si­ble and cheap process for many employ­ees which can end up cost­ing employ­ers a lot of time and mon­ey. This arti­cle looks at some of the traps, and var­i­ous risk min­imi­sa­tion mea­sures avail­able to employers.


Should employ­ers have a Social Media Policy?

The rapid spread of social media pos­es sig­nif­i­cant chal­lenges in the work­place. If employ­ers want to restrict poten­tial­ly dam­ag­ing com­ments by employ­ees on social media about their organ­i­sa­tion, they need to imple­ment a suit­able social media policy.

Glen Stut­sel v Lin­fox Aus­tralia Pty Ltd [2011] FWA 8444

The employ­er ter­mi­nat­ed the employ­ee for seri­ous mis­con­duct fol­low­ing the employ­ee and friends mak­ing racial­ly deroga­to­ry and sex­u­al­ly dis­crim­i­na­to­ry com­ments about man­agers on his Face­book page.

The sex­u­al com­ments about one man­ag­er were not made by the employ­ee and the Com­mis­sion con­sid­ered it strange to hold the employ­ee account­able for the com­ments of oth­ers. It was rel­e­vant that the employ­er did not have a social media pol­i­cy and no oth­er employ­ees who made deroga­to­ry com­ments were the sub­ject of any sanc­tion by the employ­er. The Com­mis­sion con­clud­ed the employ­ee was not guilty of seri­ous mis­con­duct and there was no valid rea­son for ter­mi­na­tion, and there­fore he had been unfair­ly dis­missed. The Com­mis­sion ordered he be rein­stat­ed and receive lost wages fol­low­ing ter­mi­na­tion. The case is cur­rent­ly the sub­ject of appeal.

The Com­mis­sion­er was crit­i­cal of the employ­er for not hav­ing a social media policy.

Is the ter­mi­na­tion a Gen­uine Redundancy?

Employ­ers who fail to observe the Fair Work Act 2009 (Cth) (the Act) redun­dan­cy require­ments can find them­selves exposed to unfair dis­missal claims. A recent deci­sion before the Fair Work Com­mis­sion high­lights these legal require­ments which include the need to con­sid­er alter­na­tive posi­tions and to con­sult with the affect­ed employ­ee about the redundancy.

Horn v Mas­termyne Engi­neer­ing Pty Ltd [2012] FWA 10846

The employ­ee claimed he was not gen­uine­ly redun­dant because:

  • there was no con­sul­ta­tion or any demon­strat­ed effort to iden­ti­fy alter­na­tive posi­tions in the employer’s business;
  • fol­low­ing the employee’s ter­mi­na­tion, his duties were allo­cat­ed to oth­er employ­ees not qual­i­fied to under­take the work; and
  • the employ­er sub­se­quent­ly adver­tised posi­tions the employ­ee was qual­i­fied for.

The employ­er claimed employee’s role was no longer required to be under­tak­en by any­one due to changed oper­a­tional require­ments, in response to a down­turn in the coal indus­try. Senior Deputy Pres­i­dent Richards con­sid­ered it did not mat­ter whether the employ­er redis­trib­uted the employee’s for­mer duties to oth­er employ­ees, who were not qual­i­fied, as that was a mat­ter for the employer.

The employ­er estab­lished it had inves­ti­gat­ed the avail­abil­i­ty of alter­na­tive posi­tions in the employ­ers group of com­pa­nies; how­ev­er, those inves­ti­ga­tions were unsuc­cess­ful. The posi­tions adver­tised after the employ­ee was ter­mi­nat­ed, were for fit­ters under­tak­ing under­ground work – which the employ­ee did not meet the reg­u­la­to­ry require­ments for. Richards SDP deter­mined that there was no oblig­a­tion on the com­pa­ny on this occa­sion to over­come the dif­fer­ence in skill and expe­ri­ence by retrain­ing the employee.

The employ­er had held a pre-start meet­ing” with employ­ees at which the organ­i­sa­tion review was explained, the mem­o­ran­dum of that meet­ing was pub­licly avail­able and employ­ees had been invit­ed to prof­fer sug­ges­tions to off­set, avert or mit­i­gate the pro­posed changes. Thus the employ­er had com­plied with the con­sul­ta­tion pro­vi­sions of the rel­e­vant Award.

Richards SDP con­clud­ed that the employ­ee had been made gen­uine­ly redun­dant and the employee’s appli­ca­tion was dismissed.

For fur­ther infor­ma­tion on redun­dan­cy see our arti­cle on Redun­dan­cy and for the full case details see our arti­cle on Horn v Mas­termyne Engineering.

Is a sys­tem of employ­ee warn­ings advisable?

A fail­ure to doc­u­ment per­for­mance man­age­ment pro­ce­dures such as com­mu­ni­cat­ing expec­ta­tions and issu­ing warn­ings prop­er­ly, may expose an employ­er to an unfair dis­missal claim if the employ­ee is lat­er ter­mi­nat­ed for poor performance.

Moumtzis v Dolina Fash­ion Group Pty Ltd [2013] FWC 501

The employ­ee in this case was ter­mi­nat­ed on the basis she was unfit for her posi­tion as a design­er of women’s cloth­ing. The employ­er had informed her that she had not achieved the required prof­it mar­gins for the busi­ness and was pur­chas­ing expen­sive fabrics.

The employ­er did not put for­ward any evi­dence con­cern­ing per­for­mance dis­cus­sions had pri­or to the ter­mi­na­tion and Vice Pres­i­dent Wat­son was left to con­sid­er the uncon­test­ed evi­dence of the employ­ee. She did not have any KPI’s, bud­gets or annu­al reviews and there­fore her employer’s per­cep­tion she was not per­form­ing, did not amount to a valid rea­son for termination.

The evi­dence did not estab­lish that the employ­ee had been warned of unsat­is­fac­to­ry per­for­mance pri­or to the ter­mi­na­tion. The fact there was no valid rea­son for ter­mi­na­tion, no chance for the employ­ee to respond and no pri­or warn­ings, led to the con­clu­sion the employ­ee was dis­missed unfair­ly. VP Wat­son ordered the employ­er pay the employ­ee 22 weeks remu­ner­a­tion as compensation.

Ter­mi­na­tion with­out an inves­ti­ga­tion is dangerous

Employ­ers must ensure care­ful doc­u­men­ta­tion of all inves­tiga­tive process­es par­tic­u­lar­ly if they may have dis­ci­pli­nary con­se­quences such as ter­mi­na­tion. It is also impor­tant to warn employ­ees that their con­duct may lead to dis­missal. The below case demon­strates that fol­low­ing prop­er pro­ce­dures in the inves­tiga­tive stage and dur­ing dis­ci­pli­nary action is important.

Read v Gor­don Square Child­care Cen­tre Inc T/A Gor­don Square Ear­ly Learn­ing Cen­tre [2012] FWA 7680

In this case an employ­ee at a child­care cen­tre was the sub­ject of a parental com­plaint. A par­ent com­plained that their child was left unat­tend­ed when upset by the employ­ee, was not giv­en break­fast, and on anoth­er occa­sion had been allowed to play with elec­tri­cal out­lets. This com­plaint was inves­ti­gat­ed by the child­care cen­tre management.

The inves­ti­ga­tion con­clud­ed that the employ­ee had admit­ted she left the child unat­tend­ed and that this was a fail­ure to super­vise and con­sti­tut­ed a breach of child­care reg­u­la­tions. This was deemed mis­con­duct which was not com­pat­i­ble with the employee’s employ­ment con­tin­u­ing with the employ­er. The employ­ee was sum­mar­i­ly dis­missed on the basis this con­sti­tut­ed seri­ous misconduct.

It was sig­nif­i­cant that the employ­ee was not warned that her con­duct could result in ter­mi­na­tion. Com­mis­sion­er Bis­sett con­clud­ed the employ­ee did leave the child unat­tend­ed and unsu­per­vised. This was a breach of the Nation­al Law and the cen­tres Super­vi­sion Pol­i­cy. Comm. Bis­sett also accept­ed that the employ­ee had pre­vi­ous­ly allowed chil­dren to play under her recep­tion desk where there were wires.

The evi­dence was that the employ­ee was informed that her non super­vi­sion of a child was the rea­son for ter­mi­nat­ing her employ­ment. The child­care cen­tre afford­ed the employ­ee pro­ce­dur­al fair­ness in the process of inves­ti­ga­tion because they had pre­sent­ed the alle­ga­tions, allowed her to respond and then made a find­ing which in turn was com­mu­ni­cat­ed to her. The employ­ee was also allowed a sup­port per­son at both meet­ings with the employ­er. While pre­vi­ous dis­cus­sions about per­for­mance did not con­sti­tute warn­ings, ulti­mate­ly Comm. Bis­sett con­clud­ed that sum­ma­ry dis­missal was fair.

Attend Fair Work Com­mis­sion Proceedings

If a for­mer employ­ee brings an unfair dis­missal claim before the Fair Work Com­mis­sion, employ­ers can­not afford to ignore such a claim. Regard­less of size, time and resources, employ­ers who ignore a claim run the risk of the Com­mis­sion mak­ing adverse find­ings against them in their absence.

Bargmann v Stil­no­vo Pty Ltd T/​AMurano and Gul­lot­ti [2013] FWC 1080

In this case the respon­dent employ­er did not attend the sched­uled tele­phone con­fer­ence or pro­vide sub­mis­sions upon request from the Com­mis­sion. On that basis DP McCarthy accept­ed the appli­cant employee’s evi­dence unchal­lenged and found that the employ­ee had been unfair­ly dismissed.

What does this mean?

The fol­low­ing points emerge from the above:

  • Imple­ment a suit­able social media pol­i­cy- with­out it, you are deprived of a valu­able tool in man­ag­ing the social media behav­iour of your workforce;
  • Redun­dan­cy may not mean redun­dan­cy under the Fair Work Act unless you stick to the rules;
  • Fail­ure to imple­ment and doc­u­ment a warn­ing process will dam­age your abil­i­ty to defend per­for­mance based terminations;
  • Appro­pri­ate inves­ti­ga­tion, and com­pli­ance with nat­ur­al jus­tice require­ments, can sig­nif­i­cant­ly assist in the defence of unfair dis­missal proceedings;
  • Ignore the Fair Work Com­mis­sion at your peril.