Dismissing an Employee in NSW

DISMISSING AN EMPLOYEE IN NSW

Dismissing an employee can be distressing and upsetting for all concerned and
therefore ensuring that the dismissal is done in a fair and appropriate manner is
important to both the employee and the employer.

❖At the same time, the FW Act, sets out the circumstances where an employee is entitled to
make unfair dismissal claimsagainst the employer.

❖In NSW, the Fair Work Act 2009 (“FW Act”) sets out the legal obligations of the employer in
ensuring that an employee is fairly terminated and provides certain protections against unfair
dismissal of an employee.

❖At the same time, the FW Act, sets out the circumstances where an employee is entitled to
make unfair dismissal claimsagainst the employer.

❖The FW Act under Chapter 5, (Parts 5-1 and 5-2),establishes two government bodies which
are responsible for its administration.

▪The Fair Work Commission (“FWC”)

▪The Fair Work Ombudsman (“FWO”)

These separate entities perform different roles and work within the national legal framework in
Australia.

The FWC and the FWO provide the means and processes through which employee rights and
conditions in the workplace are protected and managed.

In particular, this is done by:

•The FWC (the main national tribunal)
having jurisdiction over, wages and wage
entitlements, unfair dismissal disputes,
unlawful termination, general protections
and anti bullying.

•The FWO (the employment advocate)
determines issues of wages and workplace
entitlements, provides general advice,
education and training to both employees
and employers and provides dispute
resolution services.

Both provide resources and services of
mediation, conciliation hearing swhich
assist in the resolving of disputes between
employees and employers prior to
escalating to a court.

What are important considerations for the employer when
dismissing an employee?

The FWC looks at whether there was a valid reason for terminating
an employment contract. The reason, can’t just be a far-fetched or
impulsive act of termination by the employer.

•Is there a justifiable reason relating to the employee’s performance
that has led to the decision to dismiss the employee?

•Is there some form of misconduct that is evident and is the primary
reason for dismissing the employee.

There needs to be a substantive reason, once established the FWC
then looks to whether there has been procedural fairness associated
with the dismissal.

The considerations are normally:

•Did the employee, have the opportunity to respond?

•Was the employee given the opportunity to prove they
could improve their performance?

The FWC is looking toestablish that the employee has
been given a “fair go” in terms of having the chance to
improve as well as having input into the decision
making process.

Is the size of the employer’s business a factor in the process of dismissing
an employee in NSW?

No, an employee may bring an action of unfair dismissal against a business no matter its
size.
However, there are additional requirementsfor ‘Small Businesses’ with 15 or less employees
to follow the Small Business ‘Fair’ Dismissal Code.

A small business must follow a checklist in determining each of the below:

•Summary Dismissal
Dismissal of this type is deemed ‘fair’ where the employer has reasonable grounds to
terminate an employee’s employment immediately and without notice on the basis of serious
misconduct.

•Other Types
In all other cases the employer must have valid reasons of dismissing an employee based
on the employee’s conduct and/or capacity to perform their job.

This follows a process where warnings must be given in writing or verbally and the
employee must be aware of pending dismissal in the event that the conduct is not rectified

Employees of a Small Business cannot make a claim for ‘unfair dismissal’
within the first 12 months of their employment with the employer.

•After this period if the Small Business employer has followed the Code,
then the dismissal will be deemed to have been fair.

•If after this period the employer did not follow the Code then the dismissal
would be deemed ‘unfair’ and the employee may bring an unfair dismissal
claim against the employer.

•Where there has been a downturn in the business of the small business
employer and a valid and genuine reason exists for the redundancy of the
position of the employee, then the dismissal will be deemed fair and a claim
for unfair dismissal cannot be brought against the employer.

What employee rights does an employer have to be aware of when
making the decision to dismiss an employee ?

An employee cannot be dismissed or
forced to resign their position entirely at the
initiative or conduct of the employer. The
FWC looks for procedural fairness being
applied by the employer in dismissing the
employee.

The employer is required to provide
reasonable notice stating reasons and /or
warnings of dismissal pending the
opportunity for the employee to rectify the
issue related to their conduct or
performance.

In the event where this has not occurred
then the employee may make an
application to the FWC for ‘unfair dismissal’
against the employer.

Employees who are excluded from making an unfair dismissal claim are :

• Fixed term employees.

• Apprentices and trainees where employment ends at end of the arrangement

• High income earners (over $142000)

• Genuine redundancies

• Employees who are demoted and whose remuneration has not had a
significant decrease
Claims must be filed by the employee within 21 days of the dismissal.

The employer on receiving the claim from the FWC has 7 days to respond
including any objection as to the FWC’s jurisdiction of the matter.

In what circumstances is conduct by the employer likely to be
harsh unjust or unreasonable in the dismissal of an employee?

The FWC will consider the following areas:

•Was there a valid reason for dismissal related to the employee’s capacity or conduct?

•Was the employee notified of that reason?

•Did the employer provide to the employee an opportunity to respond?

•Was there any unreasonable refusal by the employer to allow a support person to assistthe
employee with any discussions related to dismissal.

•In the event of unsatisfactory performance by the employee, was there warning that
continued unsatisfactory performance would lead to dismissal.

•The degree to which the size of the employer’s business would be likely to effect the
procedures followed in effecting the dismissal.

What should a business (whether large or small) do to
ensure a employee is dismissed fairly?

•It is not about, as most perceive – being 3 warnings and you are out!

•The employee needs to be placed on notice that their performance is not
meeting the required standard and they must be given a reasonable
opportunity to improve that performance.

•The best way to avoid claims for unfair dismissal is to make sure that the
people in your business understand their obligations and responsibilities
under the FW Act when terminating someone’s employment.

What are some tips for employers and employees ?

• Make sure decisions are transparent, fair and reasonable.

• Ensure the employee is provided with a written letter of termination stating
the reasons for dismissal and clearly set these out.

• Carefully consider if there are grounds for summary dismissal as dismissal
without noticeneeds to be for serious misconduct, theft, violence and
breaches related to safety.

• Retain all file notes of meetings and performance criteria expected and met
and full and detailed employment records in good form.

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