Terminating Employment in South Australia - 2 nd Edition Booklet
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1 Terminating Employment in South Australia - 2 nd Edition Booklet The following is an extract to highlight the style and layout of this publication, as well as a snapshot of the content. Some samples may not be included in their entirety or have the most updated information. If you would like to view the whole publication, it is available at Business SA. These samples are covered by copyright and cannot be reproduced in any way. For more information, call Booklet Content Overview - Legal Obligations Relating to Terminating Employment - Institutions and Their Roles - Types of Termination - Termination of Apprentices and Trainees - Procedural Fairness Guidelines - Sound Employment Practices Relating to Termination - Frequently Asked Questions Avenues of Compensation Available to Employees - Unfair Dismissal - Small Business Fair Dismissal Code and Checklist - Unlawful Termination Terminating Employment With Notice - Minimum Period of Notice for Termination of Employment - Disciplinary Guidelines for Poor Performance and Misconduct - Issues to Consider - Disciplinary/Warnings Procedure - Case Study Terminating Employment Without Notice - Types of Conduct Justifying Instant Dismissal - Instant Dismissal Guidelines - Issues to Consider - Instant Dismissal Procedure for Serious and Wilful Misconduct Redundancy - Genuine Redundancy - Redundancy Pay - Redundancy Guidelines - Issues to Consider - Redundancy Procedure Abandonment of Employment - Abandonment of Employment Guidelines - Abandonment of Employment Procedure Sample Documents [Also available on CD-ROM] - Discipline Policy - Termination of Employment Policy - Employee Termination Record - Discipline Interview for Poor Performance or Misconduct Letter - Employee Warning Form - First, Second and Final Warning Letters - Termination of Employment for Poor Performance or Misconduct Letter - Discipline Interview for Serious and Wilful Misconduct Letter - Termination for Serious and Wilful Misconduct Letter - Voluntary and Involuntary Redundancy Letters - Redundancy Notification to Centrelink and Trade Union Letters - First and Final Abandonment of Employment Letters Terminating Employment in South Australia Booklet - 2 nd Edition with CD-ROM This Booklet can be purchased with the CD-ROM. The CD-ROM is not available for individual sale and must be bought at the same time as the Booklet. For details, refer to the Terminating Employment in South Australia Booklet - 2 nd Edition with CD-ROM.
2 Terminating Employment in South Australia Booklet - 2 nd Edition Page 8 Introduction Termination of employment is a complex and challenging area which requires employers to have an understanding of the correct principles and procedures to be applied in terminating employees lawfully and fairly, in order to minimise the risk of successful unfair dismissal, unlawful termination or discrimination claims being made against the employer. As the employment relationship can be terminated through a wide range of means, with the most common types of termination being resignation, termination with notice, termination without notice, redundancy and abandonment of employment, the type of termination will determine the appropriate process to be followed. A key aspect of the termination process is to be able to display and prove that procedural fairness has been followed. It is important that procedural fairness is provided in all termination processes. While employees in certain circumstances can be terminated without having been given time to improve, procedural fairness must still be provided through other aspects of the process. The Federal Fair Work Act 2009 identifies categories of employees that are excluded from making claims that the decision to terminate was harsh, unjust or unreasonable, e.g. unfair dismissal claims. However, all employees in the Federal workplace relations system, regardless of their employment status and their type of employment contract, are entitled to apply for relief from an unlawful termination. Further, all employees are able to make a workers compensation claim, as well as having the ability to make an application regarding discrimination to the Australian Human Rights Commission in the Federal jurisdiction or the Equal Opportunity Commission in the State jurisdiction. Therefore, it is essential that all employers continue to adopt sound human resources practices in the workplace. This Booklet outlines the legal obligations and requirements imposed upon employers and also provides employers with sound practices regarding the disciplinary process and the eventual termination of an employee s employment. These practices and procedures will provide an employer with a sound basis for making decisions in relation to potential terminations and can help minimise the risk of successful unfair dismissal, unlawful termination or discrimination claims. Additionally, this Booklet addresses redundancy and abandonment of employment, provides descriptions of governing legislation and bodies, sample policies, pro forma letters and forms, a case study for terminating an employee with notice and a collection of frequently asked questions about specific termination of employment related issues. Given that there are many means by which an employee can seek a review of their dismissal, it is strongly recommended that employers work carefully through the processes outlined in this Booklet. The content of this Booklet is intended to be a guide only and is not intended to be a substitute for an employer referring to specific termination provisions contained in the appropriate legislation or seeking professional advice when considering the termination of an employee s employment. It should be noted that this Booklet only focuses on those employers covered by the Federal workplace relations legislation and their workplace responsibilities, along with other relevant State and Federal employment-related legislation. In South Australia, all private sector businesses are covered by the Federal workplace relations system and therefore, the requirements of the Federal Fair Work Act Before making a decision to terminate an employee, businesses are advised to seek professional advice. Employers faced with unfair dismissal, unlawful termination, workers compensation or discrimination claims should also seek professional advice as soon as they become aware that a claim is likely to be made against them. For assistance, call Business SA s Business Advisory Centre :
3 Terminating Employment in South Australia Booklet - 2 nd Edition Page 13 Types of Termination Terminating employment is defined as being the voluntary or involuntary ending of the employment relationship by either the employee or employer, through several different means. The following briefly outlines the various types of ways the employment contract can be terminated, with different legislative requirements, processes, procedures and documentation requirements applying to each of them. However, procedural fairness should be taken into account in all termination decisions. [Refer to the Procedural Fairness Guidelines Section in this Booklet.] Resignation Resignation is the ending of the employment contract at the initiative of the employee. Resignation is made by the employee, either verbally or in writing, giving the employer an appropriate period of notice (as generally covered by the relevant award/agreement or their employment contract) of their intention to leave their position of employment. Resignation also covers where an employee retires. Termination With Notice Termination with notice occurs when the employer provides a reasonable amount of notice to the employee of their intention to terminate the employment contract. What constitutes a reasonable amount of notice varies according to the specific circumstances of each proposed termination, the relevant legislative provision and industrial instrument such as award or agreement. [Refer to the Terminating Employment With Notice Section in this Booklet.] Termination Without Notice Termination without notice refers to instant or summary dismissal and can be legally sustained only when the employee has acted in such a manner as to commit serious and wilful misconduct. The action must have been deliberate, or at least caused by gross negligence, and must be so serious that it strikes at the basis of the employer/employee relationship. [Refer to the Terminating Employment Without Notice Section in this Booklet.] Redundancy Redundancy is a dismissal that occurs due to the employer no longer requiring the job the employee has been doing to be performed by anyone. Redundancy does not occur on account of any personal act or fault of the employee. The term retrenchment refers to a termination that occurs when the employer wishes to reduce the number of employees in the workforce, but still requires the particular job that the employee has been doing to be performed. [Refer to the Redundancy Section in this Booklet.] Abandonment of Employment Abandonment of employment occurs when an employee is absent from work for a continuous period without the consent of the employer and fails to provide an appropriate explanation for their absence within a specified time period. While abandonment of employment is not specifically covered by the Federal Fair Work Act 2009, over time, an industrial standard has been developed through case law and award prescription. Under this standard, absence for three (3) or more consecutive days without reasonable cause and consent of the employer is prima facie evidence that the employee has abandoned their employment. Where the employee fails to contact the employer and provide an appropriate explanation within fourteen (14) days, the employer is entitled to view that the employment has been abandoned. [Refer to the Abandonment of Employment Section in this Booklet.]
4 Terminating Employment in South Australia Booklet - 2 nd Edition Page 36 Minimum Period of Notice for Termination of Employment Notice Required Under the National Employment Standards The minimum period of notice an employer must give to an employee in order to terminate the employment contract is covered in the National Employment Standards of the Federal Fair Work Act An employee should not be terminated unless the employer provides the minimum required notice in writing or pays the employee in lieu of the notice. Any payment in lieu of notice needs to include payments made on behalf of the employee, including superannuation contributions. Required Notice of Termination Period of Continuous Service Not more than 1 year More than 1 year but not more than 3 years More than 3 years but not more than 5 years More than 5 years Period of Notice At least 1 week At least 2 weeks At least 3 weeks At least 4 weeks If the employee is over forty-five (45) years of age and has completed at least two (2) years of continuous service, the applicable period of notice is increased by one (1) week. This requirement legally overrides anything that may be contained in an employment contract, unless the employment contract provides for a greater amount of notice than the Fair Work Act Failure by the employer to provide the relevant period of notice on termination will result in an unlawful termination of the employee. Exclusions From Notice Entitlement Under the Federal Fair Work Act 2009, the following employees are excluded from the entitlement to notice of the termination: - employees terminated for serious misconduct; - employees engaged under an employment contract for a specified period of time, specified task or during a specified season; - a casual employee; - employees (other than an apprentice) to whom a training arrangement applies and whose employment is limited to a specified time or for the duration of the training arrangement; - daily hire employees in the building and construction industry; - daily hire employees in the meat industry; - weekly hire employees in the meat industry terminated solely as a result of seasonal factors; or employees prescribed in the Federal Fair Work Regulations 2009.
5 Terminating Employment in South Australia Booklet - 2 nd Edition Page 57 Sample Employee Warning Form [Extract from Business SA s Employment Documentation Package - 4 th Edition] Warning First Second Final Other [please specify, e.g. first and final] Employee Name Date / /. Position Employee s Representative Person Issuing Warning Position This warning is about Employee s comments The employee must If the employee does not improve, then Follow up/review date [where applicable] / / / Signed Signed [Person Issuing Warning] [Employee s Acknowledgement of Receipt of Warning] Signed Signed [Management Witness] [Employee Witness (if applicable)] Name Name Position Position
6 Terminating Employment in South Australia Booklet - 2 nd Edition Page 68 Issues to Consider When Terminating Employment Without Notice Important Note Business SA recommends that professional advice is sought before terminating an employee for serious and wilful misconduct. Call our Business Advisory Centre on The following are critical factors that should be examined as part of the decision to terminate without notice for reasons of serious and wilful misconduct; however, other factors may be relevant depending on the circumstances of the situation. - What is the basis of employment? - Is the employee currently engaged as an apprentice or trainee under a Contract of Training? - Is the employee still within the minimum employment period, on probation or a casual employee? - Is the employee currently receiving workers compensation payments? - Is the alleged misconduct both serious and wilful? - Has the employer in any way condoned the employee s conduct or treated similar conduct from other employees as being less serious? - Has the employee been removed from the immediate workplace (suspension on full pay if necessary) pending a thorough investigation? - Has a thorough investigation been conducted in an unbiased manner, and if appropriate, witness statements taken to verify the reasons that are relied upon? - Has the employee been interviewed where the specific allegations of serious and wilful misconduct have been put to the employee and has the employee been given an opportunity to respond? - Has the employee been allowed to bring a support person to the interview? - Did management organise a witness to attend the interview? - Have you considered all mitigating factors raised by the employee? - Would the matter be handled more properly as a disciplinary matter subject to dismissal with notice? - Has the termination been put in writing? - Have all relevant termination payments in accordance with the relevant industrial instrument or legislative provision been prepared and provided to the employee?
7 Terminating Employment in South Australia Booklet - 2 nd Edition Page 75 Overview The generally accepted concept of redundancy is that a job becomes redundant when the employer no longer requires the position the employee has been doing to be performed by anyone and is not on account of any personal act or fault of the employee dismissed. Retrenchment is normally where the employer requires less people to perform a particular task or tasks. However, the Federal Fair Work Act 2009 provides more extensive and onerous criteria than the generally accepted concept of redundancy and retrenchment. In addition to the employer no longer requiring anyone to perform the person s job or less people are required to perform a particular job, an employer has to ensure that the redundancy or retrenchment is a genuine redundancy. The principles, concepts and legislative requirements for terminating employees in these circumstances apply equally to both and under the Federal Fair Work Act 2009 wherein the term redundancy incorporates both redundancy and retrenchment. [Refer to the Genuine Redundancy Section in this Booklet.] Redundancy Criteria The term redundancy is mainly used in the following types of cases, that is, a termination that occurs as a result of: - technological change, the most obvious example of which is the introduction of automated techniques reducing the number of workers needed for a particular process; - a diminution of the activities of an organisation caused through a lack of demand. This lack of demand may be peculiar to the product of an organisation or a general economic downturn; - a change in the nature of the activities of an organisation, often arising from modification or cessation of unprofitable activities; - a merger or takeover leading to a rationalisation of an organisation s activities; - a cessation of the activities of an organisation; - the completion of particular activities, such as projects in the construction industry; - fluctuations in production activity because of changes in the market or in economic conditions, for which the employer may not be reasonably held responsible; - a downturn of products due to climatic conditions, e.g. bad seasons in the rural sector; - flood, fire or other devastation of an organisation; or - reorganisation of the employer s business that may be required by an economic reduction or rationalisation of the workforce. Retrenchment of an employee also constitutes termination of employment and relates to an employer having to reduce the number of employees they usually employ to cut costs in an economic downturn, but still requiring the particular job the employee was doing to be done. Retrenchment may be justifiably used when an employer has made or seeks to make: - a reduction in expenditure; - a curtailment of costs; - a reduction in production; and/or - an economic reduction or rationalisation of the workforce.
8 Terminating Employment in South Australia Booklet - 2 nd Edition Page 92 Abandonment of Employment Guidelines Abandonment of employment occurs when an employee is absent from work without reasonable cause and without the consent of the employer. It is important that an unauthorised employment absence is not immediately treated as an abandonment of employment. An employee s absence may be justified due to, for example, hospitalisation, sudden illness or injury. Initially, the circumstances surrounding the employee s absence should be investigated and the employer should question any relevant managers/supervisors as to reasons (if any) relating to the employee s absence and whether or not leave (of any sort) has been granted. Depending on the circumstances, it may also be appropriate to contact the employee s emergency contacts or next of kin to establish the reasons for the absence. If the employer establishes that the employee is absent without a genuine reason or without permission, the abandonment of employment process should be implemented. While abandonment of employment is not specifically covered by the Federal Fair Work Act 2009, over time, the following industrial standard has been developed through case law and award prescription: - absence for a continuous period exceeding three (3) working days without the consent of the employer and without notification, is taken to be prima facie evidence that the employee has abandoned their employment; - the employer must make significant and documented attempts to ascertain the whereabouts of the employee, including sending a letter through registered mail, requiring the employee to respond within fourteen (14) days from the date of the letter; and - where an employee fails to respond or provide an appropriate explanation for their absence within fourteen (14) days from the date of the letter, the employer is entitled to view that the employment has been abandoned. To ensure that any dispute concerning the circumstances of a termination for abandonment of employment is minimised, it is recommended that all correspondence to the employee concerned is in the form of a letter sent by registered mail as the employee is required to sign a document acknowledging receipt of the letter and therefore the employer is able to prove the employee actually received the letter. Any communication by telephone, or other non-recorded means, should be immediately confirmed in writing and sent by registered mail.
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