If you are a business owner, at some point or another you are going to have to let employees go. Whether this decision is made because you are trying to downsize or simply because an employee’s performance is not up to scratch, there are certain obligations that you have to adhere to when firing staff. In today’s article, we have a look at exactly what those obligations are and how you can handle the termination process in the most ethical and law-abiding way possible. Read on to find out more!
1. Don’t Make It A Surprise
Whenever you decide on terminating staff, it is important that you ensure you don’t blindside employees. In other words, don’t make it a surprise. If your company needs to downsize, it is important that your staff is made aware of this fact. That way, if there are staff members who are looking to retire or move on to another job, they are given the opportunity to leave on their own accord. Secondly, if you are terminating due to poor performance, it is important that you have all the necessary documentation citing reasons, performance reviews and so on in order to prevent a situation where an employee takes the issue up with unfair dismissal lawyers.
2. Dismissal Notice Periods
If you need to dismiss an employee, you will need to have substantial evidence in the form of conduct reports, performance reviews and complaints made. Even so, it is your obligation as an employer to give them notice of their dismissal. This notice period starts the day after you have informed your employees about dismissal and ends on the last day of employment. When it comes to how much notice you have to give, timings will differ based on how long your employee has been a member of your organisation. Generally, someone who has worked with you for under one year will require 1 week of notice. Those who have worked for between 1-3 years will require 2 weeks, whilst those who have worked for between 3-5 years will require 3 weeks of notice. Finally, staff that have been employed for over 5 years will require 1-month prior notice before official dismissal.
3. Entitlement Guidelines
When an employment relationship ends, it is the employer’s obligation to ensure that employees receive their entitlements in their final pay. These entitlements can range from outstanding pay, pay in lieu of notice of termination, long service leave entitlements, accrued leave entitlements and redundancy pay if the employee being terminated is made redundant and is eligible for said entitlements. Failing to do so can land your business in hot water, so always make sure you stay on top of entitlement guidelines.
4. Always Have A Witness
The general rule of thumb is that employers should always have a witness present when terminating an employee. Ideally this will be an HR representative of your business or any other trusted senior to bear witness to your conversation. This is a step taken to ensure that you have acted ethically and legally in the termination process in the case where an employee decides to take legal action against you.
5. Advising Centrelink and Unions
Lastly, the final obligation an employer has to fulfil is to any departments or unions when terminating the contracts of 15 or more employees in your organisation. This can be because of economic, technological or structural issues with the business. Whatever the case, always remember to notify the related unions when terminating a large number of employees at once.
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Firing an employee is by no means a fun experience – however, sticking to your obligations as an employer and ensuring that the termination is conducted in the fairest and most ethical way is important for both employer and employee. We hope that this article has given you some insight into your obligations as a business owner when terminating staff.
