Four things to remember when dismissing employees

So, in simple terms, what does an employer need to remember?

1. Before stepping into the breach, consider whether there is a valid reason for dismissal. Be able to clearly articulate that reason and ensure that the reason is supported by evidence before making a final decision. It is often the case that the reason relied upon by the employer is undermined by evidence that later comes to light during the legal process. Ensure that the decision-makers are clear on the reason for dismissal and that the reason is proven and supported.
2. The fundamental requirement is one of process. Was there a proper, soundly based performance management process? That involves explaining to the employee the issue with their performance, allowing them an opportunity to improve before revisiting the issue, and assessing whether or not improvements have occurred. If it was an issue of misconduct, was a proper investigation or fact-finding process undertaken and conclusions formed based on sound facts and evidence?
3. Is dismissal fair in all the circumstances? In large part, this often relates back to process. If performance is the issue, the Fair Work Commission will consider whether the employee was afforded a ‘fair go all round’. Were they given a genuine chance to improve, and did they clearly understand that failure to improve could lead to dismissa? This is a really important step to be able to verify. Whether or not a policy applied to the issue in question, also relevant to this issue is whether the employee knew about and followed the policy. If an employer has a policy it must follow it. Failure to follow policies is a common mistake made by employers.
4. The issue of whether the dismissal is harsh in all the circumstances needs to be considered. That is, does the punishment fit the crime? This is often an area that employers struggle with. The best way to mitigate risk is to ensure that the decision-maker actually records that he/she has considered issues that may add to the harshness of a decision to dismiss, such as a very lengthy period of service, a previously unblemished record, treatment of other employees in the same circumstances, or some other consideration of the personal circumstances of the employee.

Above are the four fundamental do’s, so what are the don’ts?

1. Never construct a reason for dismissal that is not the real reason. 

If an employer wants to dismiss an employee, the reason for that decision needs to be genuine and the one communicated to the employee. Very often we see situations where, as a consequence mainly of frustration, a quick decision to terminate is made and ‘performance problems’ are constructed. This will always unravel in Commission proceedings.

2. Never fail to follow a clear and fair process.

Process failings are perhaps the most common reason for successful unfair dismissal claims. Take care with process and seek advice as appropriate

3. Don’t ignore factors such as length of service and disciplinary record.

Where the conduct is objectively serious, these factors will be discounted, but they still need to be considered. In general terms, decisions of the Commission tend to allow employees a ‘chance’, rather than accept that dismissal is an appropriate outcome. On that issue, be sure to consider alternatives to dismissal and record your consideration of them before making a decision. Would demotion, transfer or counselling be a more appropriate outcome in all the circumstances?
   

4. Lastly, always conduct dismissals in a dignified, respectful manner.

In my experience, the more that an employee feels humiliated by the manner of the dismissal, the more likely a claim will arise. Hold meetings and discussions in private areas and in a manner and tone that demonstrates you understand how serious an impact this decision will have on the employee’s personal life. There is rarely a need to have security escort an employee off the premises, and wherever possible this type of overt, humiliating experience should be avoided. This does reduce the likelihood of a claim.

​​​​​​​There is no way to manage the risk of unfair dismissal claims away entirely. However, by following fair processes and relying upon clearly articulated reasons for dismissal, not only is the chance of a claim reduced but the ability to defend a claim and refuse to settle is greatly increased. Always remember that you will need evidence to properly manage the risk of claims, so ensure that all of these factors can be supported by notes, forms and other types of evidence. The process itself will always remain a difficult one because of emotion, but the legal risk can be effectively managed.

Alice DeBoos is a partner and global practice area leader of the Labour, Employment & Workplace Safety team at K&L Gates.