Nearly all businesses will deal with the exit of an employee at some stage, whether it's through resignation, dismissal or redundancy. As a business owner and employer, it is important you understand your employees’ entitlements and the relevant legislation you need to adhere to

There are different rights and obligations that come as a result of ending employment. These depend on the way in which the employee exits.

Resignation

A resignation by an employee is a conscious decision that they no longer want to be part of the employment relationship.  If resigning, an employee must give you the appropriate amount of notice.

While an employee can resign from their job verbally, it is best for you to follow up by confirming the resignation in writing. This will help avoid any misunderstandings.

You can find related information by selecting from the list below:
•    Notice Periods
•    References
•    Exit Interviews
•    Separation Certificates
•    Statement of Service

Dismissal

A person has been dismissed from their employment when:
•    their employment has been terminated at the initiative of the employer, or
•    they have resigned their employment, but the resignation was forced by something their employer did

Valid reason

To dismiss an employee, you must have a valid reason. This reason must be based on poor performance, conduct or changes to your operational requirements.

Poor Performace

Poor or underperformance should be dealt with promptly and appropriately by an employer, as employees are often unaware they are not performing well and so are unlikely to change their performance.

You can find information on how to manage performance here 

Conduct (misconduct)

There are various degrees of behaviour which fall under the general description of ‘misconduct’.

Misconduct in employment can be at two different levels: 

  • misconduct - behaviour justifying a warning, and
  • serious misconduct - behaviour justifying summary dismissal.

You can find information about misconduct here 

Abandonment of employment

An employee who is absent from work without authorisation or approval, or without supplying a reason, may have abandoned their employment. It is important to be clear about your rights and obligations as an employer in such situations. 

You can find more about abandonment of employment here

Redundancy

A job becomes redundant when the work performed by an employee is no longer necessary as the job has been replaced by technology or the work has been restructured.

Employees may be entitled to redundancy benefits, depending on their length of service and the award, agreement or contract of employment they were employed under.

You can find more about redundancy here.

You must make sure you understand the requirements for each of the abovementioned reasons to ensure you avoid any legal problems later. Two areas to be particularly aware of are:
•    Unfair Dismissal
•    Unlawful Termination

Small business exclusion

If you are a small business (i.e. you employ less than 15 employees on a regular and systematic basis) the Small Business Fair Dismissal Code provides you with a process to follow if you need to dismiss an employee. 

You can find a copy of the Small Business Fair Dismissal Code here.

Need more

NatRoad’s advisors have substantial experience in advising on termination of employment. 

For more information and advice about, termination of employment contact a NatRoad advisor on (02) 6295 3000 or info@natroad.com.au