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What you need to know about termination of employment

Termination of employment isn’t just a daunting prospect for employees. It can also be a very uncomfortable situation for the person whose responsibility it is to dismiss staff members.

Kerrie-Anne Chinn, Content & Editorial Manager

2017-09-19

If you’re a manager, or small business owner, termination of employment is something you’ll most likely have to do. It’s part and parcel of the job. But whatever you want to call it – dismissing, firing, or ‘letting someone go’ – terminating someone’s employment is never an easy or pleasant task.

There are also considerable legal requirements and procedures that you need to be aware of when terminating someone’s employment. So if you’re a manager or employer, it’s important to take the time to understand the rules and regulations for your state (as well as federal laws), to protect yourself and your business.

The more you know about employment termination beforehand, the less painful the process will be – for both you and the person you’re dismissing. Today we’re going to talk more about this topic, to help you feel more prepared and confident in your ability to deal with the situation head on.

Reasons Why Employment May Be Terminated

First up, let’s talk about why a worker’s employment may be terminated.

Termination of employment can be for various reasons, but the most important thing to know is that you must always have suitable reasons for taking this decision.

Valid reasons can be something quite straightforward, like a driver losing their driving licence – in this case, the person is simply no longer able to perform their job. Dismissal is also fair if you made it clear at the start of employment that the job was only for a temporary period of time, such as in the case of a maternity leave contract.

Things get more complicated when the termination is due to an employee’s capability or conduct. Even the best managers, dedicated to the professional development of their staff, will have instances where an employee’s performance can’t be improved upon any further. And that may mean it’s best to remove the employee from their role with your company.

When someone continually ignores feedback, makes mistakes, or constantly falls short of contractual requirements, you are in a position to terminate their employment. If you’re letting someone go because of poor work performance, ask yourself if you’ve done everything you can to help improve their work and correct the issue/s. If you can safely say that you have, be sure that you’ve documented these efforts and all performance-related discussions with the team member.

How to Terminate Someone’s Employment

When you do decide to dismiss someone, you need to make sure that it’s done in a fair, reasonable, sensitive and legal way.

In Australia, employers need to follow certain procedures under law before terminating any employee’s service. If it’s found that you dismissed an employee unfairly, you could be ordered to reinstate them or re-engage them. You might also have to pay compensation.

As the Australian Government’s Fair Work website outlines, unfair dismissal is “when an employee is dismissed from their job in a harsh, unjust or unreasonable manner.”

Regardless of how the worker’s employment ends, it’s important that you follow the rules about dismissal, notice and final pay to the letter. You should also have uniform policies in place around employment termination, to establish clear guidelines across the organisation.

Alyssa Gregory, small business expert, has some great advice around preparing yourself for the termination discussion:

“Before you fire anyone, you should have your ducks in a row. Understand how the event will be carried out from start to finish. You should be able to answer questions like: How and when will you collect property like keys or electronics from the employee? What will you say when the employee asks about the last paycheck?”

Gregory also recommends that managers be prepared for employees to ask why they’re being dismissed. She advises that you prepare for this question and have documented examples of poor performance, if that’s the reason for dismissal. “If you try to wing this portion of the conversation, you could inadvertently say something that could get you into hot water later,” says Gregory.