Termination of
Employment:
Australian Business
Lawyers & Advisors
Australian Business
Level 10, 140 Arthur Street
Lawyers & Advisors
NORTH SYDNEY NSW 2060
Tel: (02) 9458 7005
Fax: (02) 9954 5029
e-mail: [email protected]
website: www.ablawyers.com.au
Australian Business Lawyers & Advisors Pty Limited (ACN 146 318 783) is the Trustee of Australian Business Lawyers & Advisors Trust (ABN 76 008 556 595).
Liability limited by a scheme approved under Professional Standards Legislation. Legal practitioners employed by or being directors of Australian Business Lawyers
& Advisors Pty Limited are members of the scheme.
2nd Edition
UpdatEd FEbrUary 2011
rrp $45.00
a new legal framework
The Fair Work Act took effect on 1 July 2009. As with the previous legislation, the Fair Work Act
provides a framework for dealing with claims of unfair dismissal and provides a means by which
unfairly dismissed employees may be compensated or reinstated to their former employment. The
Fair Work Act expands the unfair dismissal protections to the majority of employing businesses.
Even small businesses are affected by these laws and the Fair Work Act includes a special dismissal
code for small business. The relevance of the Fair Work Act is not just confined to unfair dismissal
claims. The National Employment Standards as contained in the Fair Work Act provide for minimum
periods of notice and minimum severance pay conditions where employment is terminated due to
redundancy. The Fair Work Act also provides additional protections from termination for prohibited
reasons.
our objective
Employers need to ensure compliance with existing laws and need to be suitably informed in order
to assess the potential effects of laws upon their businesses. Termination of employment is a subject
that can be confusing and daunting for employers. Dismissal can expose employers to challenges to
the fairness of the dismissal and several other legal actions. It is not possible for a single handbook to
deal with everything that is relevant to the subject of termination of employment and this handbook
does not purport to be comprehensive. However, the handbook is designed to be an information
resource in which key issues are explained and illustrated by example. In keeping with this objective,
the handbook contains an overview of unfair dismissal and unlawful termination processes under the
Fair Work Act and includes practical checklists for redundancy, counselling and discipline, warnings
and pre-dismissal checks.
Making business life simpler
Our mission is to make business simpler by using everyday scenarios to explain the workplace
law issues which frequently confront business. Our team has a wealth of experience in all areas of
workplace law. We use the intellectual property from our strategic practice to provide tangible and
practical solutions. By promoting how workplace law is understood, we promote compliance.
Experts make things simple
aUstralian bUsinEss lawyErs & advisors pty ltd
Level 10, 140 Arthur Street
NORTH SYDNEY NSW 2060
Tel: (02) 9458 7005
Fax: (02) 9954 5029
e-mail: [email protected]
AUSTRALIAN BUSINESS LAWYERS & ADVISORS
website: www.ablawyers.com.au
Australian Business Lawyers & Advisors Pty Ltd is a wholly owned subsidiary of the NSW Business Chamber
Contents
Contents
Chapter 1: Reasons for termination of employment
2
Chapter 1: Reasons for termination of employment
2
Chapter 2: Prohibited reasons
6
Chapter 2: Prohibited reasons
6
Chapter 3: Notice of termination
11
Chapter 3: Notice of termination
11
Chapter 4: Redundancy
15
Chapter 4: Redundancy
15
Chapter 5: Unfair dismissal, unlawful termination
19
Chapter 5: Unfair dismissal, unlawful termination
19
Chapter 6: The Small Business Fair Dismissal Code
29
Chapter 6: The Small Business Fair Dismissal Code
29
Chapter 7: Discrimination claims
30
Chapter 7: Discrimination claims
30
Chapter 8: Checklists
32
Chapter 8: Checklists
32
APPENDIx
APPENDIx
Form 1 Notice to Centrelink of proposed dismissals
35
Form 1 Notice to Centrelink of proposed dismissals
35
Form 1 Notice to Centrelink of proposed terminations
36
Form 1 Notice to Centrelink of proposed terminations
36
Form F2—Application for Unfair Dismissal Remedy
37
Form F2—Application for Unfair Dismissal Remedy
37
41
Form F3—Employer’s Response to Application for an
Unfair Dismissal Remedy
41
44
Form F4—Objection to Application for
Unfair Dismissal Remedy
44
45
Form F8—Application for FWA to Deal with a
General Protections Dispute
45
Form F8A—Response to Application for FWA
to Deal with a General Protections Dispute
49
Form F8A—Response to Application for FWA
to Deal with a General Protections Dispute
49
Small Business Fair Dismissal Code
51
Small Business Fair Dismissal Code
51
Form F3—Employer’s Response to Application for an
Unfair Dismissal Remedy
Form F4—Objection to Application for
Unfair Dismissal Remedy
Form F8—Application for FWA to Deal with a
General Protections Dispute
© AUSTRALIAN BUSINESS LAWYERS & ADVISORS. This handbook has been prepared for information
purposes only. It is a summary and it does not purport to be comprehensive or to render legal
advice. It may not be reproduced without the written permission of Australian Business Lawyers & Advisors.
© AUSTRALIAN BUSINESS LAWYERS & ADVISORS. This handbook has been prepared for information
purposes only. It is a summary and it does not purport to be comprehensive or to render legal
advice. It may not be reproduced without the written permission of Australian Business Lawyers & Advisors.
Australian
| Termination
of employment
AUSTRALIAN Business
BUSINESS Lawyers
LAWYERS &| Advisors
TERMINATION
OF EMPLOYMENT
Australian
| Termination
of employment
AUSTRALIAN Business
BUSINESS Lawyers
LAWYERS &| Advisors
TERMINATION
OF EMPLOYMENT
1. Reasons for termination
of employment
1. Reasons for termination
of employment
“A contract of employment like any contract can come to an end in a number of ways. Termination
can be “by” the employer where an employee “is dismissed” either with notice in accordance with
the provisions of the contract or without notice in the event of serious and wilful misconduct.
Both the employer and the employee may mutually agree that the contract of employment should
come to an end. In other cases the employee may bring about the termination by resigning.”
“A contract of employment like any contract can come to an end in a number of ways. Termination
can be “by” the employer where an employee “is dismissed” either with notice in accordance with
the provisions of the contract or without notice in the event of serious and wilful misconduct.
Both the employer and the employee may mutually agree that the contract of employment should
come to an end. In other cases the employee may bring about the termination by resigning.”
Allison v Bega Valley Council (1995) 63 iR 68 at 72.
Allison v Bega Valley Council (1995) 63 iR 68 at 72.
There are various ways in which employment can come to an end. If the employer is responsible
for bringing the employment to an end, it can be said that the employment has terminated at the
initiative of the employer. If the employee is responsible for bringing the employment to an end, it
can be said that the employment has terminated at the initiative of the employee. If the employee
is employed for a fixed term, the employment ends at the time agreed by the employer and the
employee.
There are various ways in which employment can come to an end. If the employer is responsible
for bringing the employment to an end, it can be said that the employment has terminated at the
initiative of the employer. If the employee is responsible for bringing the employment to an end, it
can be said that the employment has terminated at the initiative of the employee. If the employee
is employed for a fixed term, the employment ends at the time agreed by the employer and the
employee.
This chapter describes some frequently encountered reasons for termination and some important
considerations such as particular responsibilities of the party who initiates the termination.
This chapter describes some frequently encountered reasons for termination and some important
considerations such as particular responsibilities of the party who initiates the termination.
REsignAtion
REsignAtion
An employee can resign from the employment by giving the employer notice. The period of notice
may be stated in a contract; an award; or an enterprise agreement.
An employee can resign from the employment by giving the employer notice. The period of notice
may be stated in a contract; an award; or an enterprise agreement.
Illustrative examples - resignation
Illustrative examples - resignation
Joe’s written contract of employment requires one month’s notice of termination. Joe wishes to
resign. To comply with the terms of his employment, Joe must give his employer one month’s
notice.
Joe’s written contract of employment requires one month’s notice of termination. Joe wishes to
resign. To comply with the terms of his employment, Joe must give his employer one month’s
notice.
Marie is employed under an enterprise agreement. The agreement requires two weeks notice
from an employee with between one year and not more than three years continuous service.
Marie has been employed for just over two years. She wishes to resign. Marie will need to give
her employer two weeks notice.
Marie is employed under an enterprise agreement. The agreement requires two weeks notice
from an employee with between one year and not more than three years continuous service.
Marie has been employed for just over two years. She wishes to resign. Marie will need to give
her employer two weeks notice.
If the employee does not resign voluntarily, but is forced to do so because of the employer’s
conduct, the termination can be considered to be at the employer’s initiative. This situation is
often described as ‘constructive dismissal’.
If the employee does not resign voluntarily, but is forced to do so because of the employer’s
conduct, the termination can be considered to be at the employer’s initiative. This situation is
often described as ‘constructive dismissal’.
2
2
Reasons for termination of employment
Reasons for termination of employment
Business
&| Advisors
| Termination
of employment
AUSTRALIAN Australian
AUSTRALIAN
BUSINESS LAWYERS
BUSINESS
| Lawyers
LAWYERS
TERMINATION
TERMINATION
OF EMPLOYMENT
OF EMPLOYMENT
Australian
| Termination
of employment
AUSTRALIAN Business
BUSINESS Lawyers
LAWYERS &| Advisors
TERMINATION
OF EMPLOYMENT
1. Reasons for termination
Illustrative example - constructive dismissal
of employment
An employee who is constructively dismissed could gain access to the unfair dismissal jurisdiction
- subject to satisfying any other relevant conditions for gaining access to that jurisdiction. Unfair
dismissal is covered in chapter 5 of this handbook.
An employee who is constructively dismissed could gain access to the unfair dismissal jurisdiction
- subject to satisfying any other relevant conditions for gaining access to that jurisdiction. Unfair
dismissal is covered in chapter 5 of this handbook.
Illustrative example - constructive dismissal
Michael is the quality control manager of a small department store. He has been employed for
“A contractsix
ofyears.
employment
likeinany
contract
canreveals
come to
an an
enditem
in aof
number
of missing.
ways. Termination
An audit
Michael’s
store
that
stock is
There is no record
can be “by”
employer
whereofanthe
employee
“is dismissed”
either
with noticethe
in accordance
with
tothe
show
the location
item. Without
any further
investigation
employer concludes
that
the provisions
of
the
contract
or
without
notice
in
the
event
of
serious
and
wilful
misconduct.
Michael stole the item. Michael’s supervisor tells Michael that, unless he resigns, the police will
Both the employer
the employee
mutuallythen
agree
thatMichael
the contract
of employment
be calledand
to investigate.
Themay
supervisor
gives
a letter
of resignationshould
previously
come to anprepared
end. In other
the employee
may bring
about
termination
by resigning.”
by thecases
supervisor.
Even though
he does
notthe
really
wish to resign,
Michael signs the
resignation because he feels pressured and thinks that he will be dismissed if he does not sign.
Allison v Bega Valley Council (1995) 63 iR 68 at 72.
In this example, the resignation letter does not represent Michael’s free consent. The conduct
of Michael’s employer is the principal contributing factor leading to the termination of the
employment
so the
dismissal iscan
at the
initiative
Michael’s
employer.is responsible
There are various
ways and
in which
employment
come
to an of
end.
If the employer
for bringing the employment to an end, it can be said that the employment has terminated at the
initiative of the employer. If the employee is responsible for bringing the employment to an end, it
sUMMARy
disMissAL has
(instAnt
disMissAL)
can be said
that the employment
terminated
at the initiative of the employee. If the employee
is employed for a fixed term, the employment ends at the time agreed by the employer and the
If the conduct of the employee is sufficiently serious, an employer can dismiss the employee
employee.
without giving notice. This right is reserved for very serious circumstances. The employee’s
conduct
demonstrates
wilful encountered
or deliberatereasons
behaviour
inconsistentand
with
the important
continuation of the
This chapter
describes
some frequently
for termination
some
contract
employment.
Examples are:ofphysical
violence;
fraud; the
theft;
refusal to carry out a lawful
considerations
suchofas
particular responsibilities
the party
who initiates
termination.
and reasonable instruction.
REsignAtion
Illustrative example - summary dismissal
Michael is the quality control manager of a small department store. He has been employed for
six years. An audit in Michael’s store reveals that an item of stock is missing. There is no record
to show the location of the item. Without any further investigation the employer concludes that
Michael stole the item. Michael’s supervisor tells Michael that, unless he resigns, the police will
be called to investigate. The supervisor then gives Michael a letter of resignation previously
prepared by the supervisor. Even though he does not really wish to resign, Michael signs the
resignation because he feels pressured and thinks that he will be dismissed if he does not sign.
In this example, the resignation letter does not represent Michael’s free consent. The conduct
of Michael’s employer is the principal contributing factor leading to the termination of the
employment and so the dismissal is at the initiative of Michael’s employer.
sUMMARy disMissAL (instAnt disMissAL)
If the conduct of the employee is sufficiently serious, an employer can dismiss the employee
without giving notice. This right is reserved for very serious circumstances. The employee’s
conduct demonstrates wilful or deliberate behaviour inconsistent with the continuation of the
contract of employment. Examples are: physical violence; fraud; theft; refusal to carry out a lawful
and reasonable instruction.
Illustrative example - summary dismissal
An employee can resign from the employment by giving the employer notice. The period of notice
may be stated
a contract;
an award;
an enterprise
Peterinhas
been employed
for or
eight
years and agreement.
occupies a supervisory position. His contract
requires four weeks notice of termination. As part of his job, he is responsible for a petty
cash float of $1,000. There is a detailed procedure for the proper use of petty cash. Peter
is well aware of that procedure. Despite this, Peter uses the petty cash for his own personal
Joe’s written
contractand
of employment
month’sfrom
notice
termination.
Joe wishes
to
purchases
attempts to requires
conceal one
his actions
theof
employer
by misleading
behaviour
resign. To and
comply
with
the
terms
of
his
employment,
Joe
must
give
his
employer
one
month’s
explanations. However, the employer finds out about Peter’s conduct and his attempts
notice.
to conceal the facts. The employer is satisfied that Peter has misappropriated its funds and
Peter’s employment
is terminated
withoutThe
notice.
In this example,
Peter
has conducted
himself
Marie is employed
under an enterprise
agreement.
agreement
requires two
weeks
notice
in
a
manner
contrary
to
his
duty
of
honesty
towards
his
employer.
This
dishonest
behaviour
is
from an employee with between one year and not more than three years continuous service.
inconsistent
with
the
continuation
of
the
employment.
Marie has been employed for just over two years. She wishes to resign. Marie will need to give
her employer two weeks notice.
Illustrative examples - resignation
Peter has been employed for eight years and occupies a supervisory position. His contract
requires four weeks notice of termination. As part of his job, he is responsible for a petty
cash float of $1,000. There is a detailed procedure for the proper use of petty cash. Peter
is well aware of that procedure. Despite this, Peter uses the petty cash for his own personal
purchases and attempts to conceal his actions from the employer by misleading behaviour
and explanations. However, the employer finds out about Peter’s conduct and his attempts
to conceal the facts. The employer is satisfied that Peter has misappropriated its funds and
Peter’s employment is terminated without notice. In this example, Peter has conducted himself
in a manner contrary to his duty of honesty towards his employer. This dishonest behaviour is
inconsistent with the continuation of the employment.
If the employee does not resign voluntarily, but is forced to do so because of the employer’s
conduct, the termination can be considered to be at the employer’s initiative. This situation is
often described as ‘constructive dismissal’.
2
Reasons for termination
Reasons
of employment
for termination of employment
3
Reasons for termination of employment
3
Termination of
Employment:
Australian Business
Lawyers & Advisors
Australian Business
Level 10, 140 Arthur Street
Lawyers & Advisors
NORTH SYDNEY NSW 2060
Tel: (02) 9458 7005
Fax: (02) 9954 5029
e-mail: [email protected]
website: www.ablawyers.com.au
Australian Business Lawyers & Advisors Pty Limited (ACN 146 318 783) is the Trustee of Australian Business Lawyers & Advisors Trust (ABN 76 008 556 595).
Liability limited by a scheme approved under Professional Standards Legislation. Legal practitioners employed by or being directors of Australian Business Lawyers
& Advisors Pty Limited are members of the scheme.
2nd Edition
UpdatEd FEbrUary 2011
rrp $45.00