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How to Terminate an Employee

A termination by definition is the voluntary or involuntary bringing to an end of a contract of employment.
This can be done by one of the following ways: -

  • Resignation by the employee.
  • Termination by the employer providing a due process and relevant notice provisions.
  • Redundancy by the employer.
  • Summarily by the employer due to the employee’s misconduct.
  • Frustration of the agreement.
  • Repudiation by either the employer or employee.
  • Abandonment by the employee.

Other terminations of employment contracts can include: -

  • Termination by the death of an employee
  • Completion of a fixed term, maximum term, task project

Due process must be followed when the termination of an employment agreement applies. This can include providing the relevant notice period, consultation with employee and representative (if applicable), and written documentation.

The Fair Work Regulation 1.07 defined serious misconduct as conduct that is wilful or deliberate and that is inconsistent with the continuation of the employment contract. It is also conduct that causes serious or imminent risk to the health and safety of a person or to the reputation, viability or profitability of the employer’s business.

Serious misconduct includes theft, fraud, assault, intoxication at work and the refusal to carry out lawful and reasonable instructions consistent with the employment contract.
Where serious misconduct is alleged, the test for a valid reason for dismissal does not change. It is whether the reason for dismissal was ‘sound, defensible or well founded’. A valid reason for dismissal does not require conduct amounting to a repudiation of the contract of employment.  Whilst a finding by the Commission may be that there was a valid reason for the dismissal, the dismal may be deemed harsh if the dismissal was disproportionate to a dismissal without notice.

All other forms of termination require a notice period. A notice period can be treated in a number of different ways: -

  • Worked by the employee
  • Paid out in lieu of the notice being worked
  • Extended on agreement
  • Reduced on agreement
  • Waived on agreement
  • An employee is placed on garden leave for the duration

In the absence of an award or agreement, an employee will be subject to the notice provisions provided for in the National Employment Standards which are: -

Service Weeks
1 year or less 1
More than 1 year - 3 years 2
More than 3 years - 5 years 3
More than 5 years 4

Termination by redundancy will attract a further payment of severance unless the employer is deemed to be exempt for the purposes of redundancy pay. If exempt, only the applicable notice provisions and unpaid accrued entitlements will be payable on termination.

For assistance in ensuring you are following due process with your terminations, please contact us at [email protected] or 1300 720 004.

Information in HR Advice Online guides and blog posts is meant purely for educational discussion of human resources issues. It contains only general information about human resources matters and due to factors, such as government legislation changes, may not be up-to-date at the time of reading. It is not legal advice and should not be treated as such.

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