Guide to: Terminating Staff
Reasons for Dismissal
There are three main reasons an employee may be dismissed:

Performance, conduct or capacity to do the job:
The employee’s performance does not meet the minimum acceptable standard, their conduct is
unacceptable or they are unable to perform the job they were employed to do.

Serious Misconduct:
Instant (summary) dismissal for extremely serious behaviour such as theft, fraud, assault etc.

Genuine Redundancy:
The employer no longer requires the job the employee has been doing to be done by any one (i.e. the
position is being terminated rather than the particular employee).
In every case, the employer must have a valid reason for the termination and the decision to terminate must not be
harsh, unjust or unreasonable (see Unfair Dismissal for more information).
Basic Guidelines for Dismissing an Employee Fairly
In all cases (except where indicated), the following minimum process must be followed:

The employee must be warned that they are not meeting the expectations of the employer e.g. their
performance is poor, their conduct is unacceptable etc (except in the case of redundancy or serious
misconduct).

The employee must be given a reasonable period of time to improve or correct their behaviour. (except in
the case of redundancy or serious misconduct).

The employee must be given a valid reason for the dismissal.

The employee must be given the opportunity to respond to the reason for the dismissal.

Sufficient time and consideration must be given to the employee’s response before making the decision to
dismiss them i.e. never dismiss an employee at the same meeting they are provided their opportunity to
respond.

The employee should be provided the opportunity to have a support person present at any discussions.

The employee must be provided the appropriate notice of termination or payment in lieu thereof (no notice
is applicable in the case of serious misconduct).
Guide to Terminating Staff (Last updated December 2012)
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Medium to Large Businesses
It is considered that the larger the size of business, the greater the resources available to the business and thus the
higher the expectation of a fair and thorough process to be followed in terminating an employee e.g. ongoing
performance management and monitoring to identify and manage problems (e.g. performance reviews), more
warning provided to an employee, more training provided to assist the employee to meet company standards etc.
Small Business Employers
Small business employers must follow the Small Business Fair Dismissal Code.
This is a guide for small business employers to follow in the termination of an employee and must be retained on the
employee file for 7 years. This is also highly recommended for all businesses as a minimum guideline to follow and
keep for recording and evidentiary purposes.
A small business employer is one that employs fewer than 15 employees calculated as follows:
For the purpose of calculating the number of employees at a particular time, all employees are to be
counted including casual employees IF they have been employed on a regular and systematic basis. The
employee being dismissed is also to be counted and any associated entities are taken to be one entity.
Steps to take in Dismissal
Before terminating an employee’s employment because of unsatisfactory performance and/or conduct, you should
make every attempt to address the performance and/or conduct issue. An employer should follow the steps below
before terminating the employment of an employee.
(1) Highlight expected performance and behaviour standards
Performance and conduct issues often arise because employees do not understand what is expected of
them. An employer should:

Make sure the employee clearly understands their role and the expected level of output or
performance and the expected conduct at work.

Provide the employee with regular performance feedback and inform them of any changes needed
to their work or conduct.

Make sure managers and supervisors are equipped to handle unsatisfactory performance or
conduct. This includes recognising the reasons for underperformance and providing feedback and
training to employees.
(2) Identify and address the issue
Speak to the employee about any performance or conduct issues to avoid making assumptions about the
situation. Identify exactly what the employee did or does that is unacceptable and what impact this has on
the business.
Explain your intention in relation to continuing their employment and importantly set clear plans for the
employee to follow in order for them to improve. This might include providing training to the employee.
In any formal meeting, the employee should be allowed to be represented or accompanied by a support
person, who is not a lawyer. If you are considering not allowing the person to have a representative or
support person it is strongly recommended that you seek advice before doing so.
You should keep a written record of any meetings that you have with employees about their performance
and/or conduct.
Guide to Terminating Staff (Last updated December 2012)
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(3) Provide written warnings
Provide a written warning (or warnings) to the employee about the conduct and/or performance. Providing
the employee with a warning letter is useful because:

It sets out clearly what the issue is;

It guides the employee about what to do to improve;

It sets out the consequences should things not improve; and

It becomes a formal record of the counselling you have done with the employee.
(4) Show Cause
If the issues cannot be resolved after the employee has had a reasonable opportunity to rectify the issues
that you have identified and discussed with him or her, you may decide you need to end the employment
relationship.
It is very important at this stage to arrange a meeting where the employee is asked to ‘show cause’ as to
why their employment should not be terminated. This will ensure procedural fairness as the employee is
given the opportunity to respond to the reason for their possible termination.
A ‘show cause meeting request’ (request from HWS) should be sent to the employee which offers them the
opportunity to have a support person present.
(5) Meet with the Employee
In any serious meeting with an employee where their dismissal is possible, a support person for the
employee should be allowed and there should also be an impartial person to act as ‘note taker’ at the
meeting.
During the ‘show cause’ meeting the reasons for the possible termination of the employee’s employment
should be clearly explained to the employee and they should be given an opportunity to ask questions and
respond.
Any response provided by the employee in their defence must be given due consideration. Because of this,
you should not terminate the employee at the show cause meeting; the decision to terminate the employee
must occur after this meeting and preferably not on the same day of the meeting.
(6) Provide Written Notice
If you decide to end the employment relationship you need to give the employee written notice of their
termination. You must provide notice in accordance with the applicable industrial instrument, contract of
employment or NES, whichever is the more generous. The exception is in the case of instant dismissal for
serious misconduct where notice is not required.
Items to include in the letter:

The reasons for the termination;

The steps you’ve taken to counsel the employee about their performance/conduct issues;

The length of the notice period (or payment in lieu of that notice period);

The date the employment will end.
Guide to Terminating Staff (Last updated December 2012)
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Instant Dismissal
Instant (or summary) dismissal for serious misconduct has immediate effect. It’s a severe step to terminate an
employee’s employment without notice of termination, so you should seek advice about the matter before taking
action.
Small Business Owners
If you operate a small business it’s important that you follow the Small Business Fair Dismissal Code when
terminating an employee’s employment. The Small Business Fair Dismissal Code can be downloaded from our
Information Sheets page.
Contact Us
Haycroft Workplace Solutions can prepare personalised termination letters for a nominal fee, to order or for more
advice on terminations, please call us on 1300 766 380.
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all liability (including, without limitation, liability in negligence) for all expenses, losses, damages and costs you might incur as a
result of the information or documentation being inaccurate or incomplete in any way, and for any reason.
Guide to Terminating Staff (Last updated December 2012)
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