Discipline and termination policy

Employee termination process and procedure

With a discipline and termination policy in place, employees who are unable to accomplish their duties or are found of serious misconduct in the workplace can be subject to having their employment terminated.

When dealing with the termination of employees, it is important to ensure they are treated fairly.

Firing an employee is one of the most stressful things you’ll ever have to do as a boss. It’s also something that is very difficult to defend.

In fact, while claims for unfair dismissals skyrocketed in 2015-16, employers achieved successful outcomes in fewer than 40% of these cases.

Make no mistake, if you have made the decision to terminate an employee’s tenure, it’s critical to get all your ducks in a row first and adhere to a strict employee termination procedure.

Whether you’re dealing with a poor performer or someone who behaves poorly at work, you need to give your employees every opportunity to respond and improve before you terminate employment.

Providing corrective action and performance management

If you’re facing the daunting situation of having to fire an underperformer, it’s important not to act rash with your disciplinary action. You need a measured response.

First, take a look at Fair Work Australia’s best practice guide on managing underperformance.

The procedural fairness aspects of the termination process mean you must give the employee every opportunity to lift their game and meet the expected standards.

To keep you on track, here’s a 14-step checklist from FWA:

Performance management checklist

1. Ensure employees clearly understand what is expected of them
2. Clearly identify and then assess the problem
3. Organise a meeting with the employee to discuss the problem
4. Allow the employee to bring a support person to the meeting
5. Conduct the meeting in a private, non-threatening location
6. Define and explain your concerns to the employee
7. Give the employee a genuine opportunity to respond before considering taking action
8. Where an employee’s performance is suffering due to the employee’s personal circumstances, refer the employee to professional help like counseling
9. Clearly outline the improvement required and the consequences of continued poor performance
10. Devise a solution with the employee to improve performance
11. Develop an action plan which includes performance improvement milestones and time frames for further review
12. Schedule another meeting to review the employee’s performance against the agreed action plan
13. Document all discussions, including actions to be taken
14. Monitor the employee’s performance and continue to provide feedback

Once you’ve been through this process and seen no sign of the employee’s performance improvements to the agreed standard after the final warning, you can terminate their employment.

Simply organise a private meeting to explain your actions. It’s also essential that you explain the sudden absence of the terminated employee to their team. You don’t need to go into details. Make sure you address the matter with staff promptly to avoid morale-zapping gossip.

Employee termination procedure for small businesses

For smaller businesses, specifically those with fewer than 15 employees, you are given a little more breathing room by way of the Small Business Fair Dismissal Code. But you still need to be cautious around the employee termination process.

The Code explains:

• When it’s fair to dismiss an employee
• Your responsibilities as an employer
• What you need to prove if your employee makes a claim for unfair dismissal

To qualify as a small business and use the code, calculate the number of employees in your business. Based on a simple headcount of all employees including; full-time, part-time and casual staff who are employed on a regular and systematic basis.

You must also include any employees of an associated entity, including those based overseas.

Should an employee be given notice of termination?

The process to terminate an employee’s work contract usually involves a period of notice that states in writing when their employment will end. The length of this period varies, depending on how old the employee is and how long they’ve been working at the company.

Summary dismissal

In matters where you believe an employee is guilty of serious misconduct, you can dismiss the employee without warning as long as you follow the Small Business Fair Dismissal Code.

In general, serious misconduct applies to the sort of things that you’d report to the police, such as theft, fraud and violence. This also includes serious breaches of occupational health and safety procedures.

Other Dismissals

When the issue relates to underperformance rather than misconduct, it’s important that you try to address the performance issues before taking action. This involves providing the employee with the opportunity to respond to the written warning and giving them a chance to rectify the problem.

One solution might involve providing additional training and ensuring the employee knows what’s expected of them. In the event that you do dismiss an employee for poor performance and that employee lodges an unfair dismissal claim, your due process will come under scrutiny.

Fair Work Australia will examine whether you warned the employee about their underperformance and gave them a reasonable opportunity to respond.

By showing that the dismissal was in accordance with the Small Business Fair Dismissal Code, you’ll be able to successfully defend a claim for unfair dismissal.

Using an employee offboarding management tool like Employment Hero can help you create a streamlined offboarding process and an audit trail if you need to review the process down the road.

Be protected against unfair dismissals

Implement a discipline and termination policy in your workplace now to minimise the risk of unfair dismissals.

Download our fully customisable, printable version now. Entirely free.