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Human Resources: The dismissal

Every Issue

Cite as: (2007) 81(7) LIJ, p. 94


Termination of employees is a difficult area to navigate.

Although the federal government’s WorkChoices legislation has made it easier for employers to terminate employees on more grounds, there are still many “grey areas”.

For instance, it is unlawful to dismiss an employee on discriminatory grounds.

One exception to this rule does apply. If an employer can prove that an employee cannot perform the inherent requirements of a job, it may be lawful for the employer to dismiss them. For example: an employee develops severe arthritis in their fingers after a non-work related accident and is unable to fulfil their job requirements as a typist. The employer may be able to terminate the employee on the basis they are unable to perform the inherent tasks of the position.

However, before dismissing the employee, the employer should consider whether the employee could perform the requirements of the job with “reasonable adjustment”. For example, will the employee be able to perform the job if the employer bought voice recognition word processing software?

If it would impose an “unjustifiable hardship” on the employer to provide the reasonable adjustment, it may not be unlawful discrimination to dismiss the employee.

As a matter of good practice, an employer may also consider moving the employee to more suitable duties before resorting to termination. For example, could the employee become a switchboard operator, responsible for taking calls, a task that requires little hand movement?

Unfair dismissal

Unfair dismissal is different from unlawful dismissal (although elements of the two can be included in one dismissal), in that it needs to be “harsh, unjust and unreasonable”.

Under WorkChoices, the laws for this area have been relaxed and more employees are excluded from these laws. They include:

  • employees of a small business of under 100 employees;
  • seasonal workers and employees engaged under a contract of employment for a
    specified period or task;
  • employees on probation;
  • casual employees engaged for a short period;
  • trainees; and
  • employees earning $98,200 or above.

Employees who are dismissed for a genuine operational reason are also not allowed to pursue an unfair dismissal claim.

Genuine operational reasons are typically associated with redundancy. They include dismissal for economic, technological, structural or similar matters relating to the employer’s business.

This clause gives employers the flexibility to dismiss employees for reasons relating specifically to their business, as long as they are able to provide evidence to support this.

Temporary absence from work for illness or injury

A temporary absence from work for illness or injury cannot be used as a reason for terminating employees.

For example, if an employee took three months paid sick leave, they would be “temporarily absent”.

Under WorkChoices, it is reasonable for an employer to request documentation supporting an illness. If an employee fails to provide documentation within a reasonable time, the absence may not fall under this classification, and may be subject to lawful termination.

An absence is not temporary if the absence extends for more than three months (continuous or over a 12-month period) and the employee is not on paid sick leave for the duration of the absence.

Notice requirements

When an employer terminates an employee’s employment, statutory notice requirements are in place.

On the other hand, employees do not have a requirement to give notice, unless prescribed under an industrial instrument, or a contract of employment.

The period of notice ranges from at least one week for not more than one year of continuous service to at least four weeks for more than five years of continuous service.

Employers are required to give an extra one week’s notice if the employee is over 45 years of age and has completed at least two years of continuous service with the employer.

Payment in lieu of notice

Where the employer fails to provide the required notice, the employer must pay the required amount of compensation in lieu of notice.

This amount should be equivalent to the compensation an employee would have received if their employment had continued until the end of the required period of notice. This may include shift loadings and overtime.

On the other hand, if an employee fails to give notice as prescribed in a contract of employment or industrial instrument, then the employer may be able to withhold funds from the employee in lieu of failed notice provided on the employee’s behalf.

Notice does not have to be given if the employee is guilty of serious misconduct, or during a probationary period (but must be given during the qualifying period of employment) or at the conclusion of a con-tract of employment of a specified time or specified task.

Payment at termination of employment

When an employee is terminated, all money due to the employee shall be paid at the time of termination.

Commonly this includes all annual leave owed and long service leave if they have worked continuously for the organisation for at least seven years.

To terminate or not to terminate?

If it is practicable to do so, the best way to avoid any legal risks associated with terminations is not to terminate employment until necessary and only after all reasonable steps have been taken to ensure that your legal obligations have been met.

Where areas of termination become too confusing, it’s always best to seek professional legal advice.

The Law Institute of Victoria (LIV) provides a free legal referral service that can put you in touch with a specialist employment solicitor.


This column was contributed by LIV HUMAN RESOURCES. For further information on this column and other HR issues ph 9607 9548 or see http://www.liv.asn.au/members/hr/

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