In the constantly changing compliance environment it is important, even in established, sophisticated businesses, to take some time out occasionally to review the business systems and approaches to ensure that they reflect best practice and are appropriate for the business size, style and operation. It is staggering how quickly a business can outgrow a process that used to work for them, or how quickly a small change that is missed can lead to large issues later on. This Employment 101 Series is all about going Back to Basics – ensuring that the simple systems and requirements are understood and operational, so that we can build on them and focus on the growth of the business.
Terminating employees can be a minefield of compliance at the best of times, even when the reason for terminating employment is valid it is important that businesses understand and respect the need for procedural fairness to avoid unfair dismissal penalties.
Recent cases have highlighted that businesses are still falling into simple traps of skipping small steps when managing incidents that result in unfair dismissal penalties being applied and the Fair Work Commission noting that while the reasons for termination (such as fraud, gross misconduct, serious breaches) were valid, the way the business managed the termination made it unfair.
Performance termination: Procedural and Natural Fairness
The management of employee performance or indeed the end of an employment relationship – be it by termination or redundancy – requires the observation of certain forms and elements that ensure the relationship ends appropriately.
None is more important than the concept of Procedural or Natural Fairness, wherein employees are offered an opportunity to understand the breaches and be given chance to explain their actions and behaviours and be given an opportunity to rectify or improve those actions and behaviours if appropriate.
Management needs to be open to the reform of the behaviour in instances where reform is appropriate.
Working out what is appropriate to allow ‘another chance’ is the hard part. Businesses should look a the overall trust in the employee to follow instructions, the overall trust in the employee to meet the expectations and the nature of the breaches. Tardiness, uniform breaches and small task completion issues would all be considered appropriate to allow the employee an opportunity to show that they can and have improved.
For grievous misconduct and serious breaches, even where the stated business response to those breaches is termination (zero tolerance policy), it is still important for management to give the employee a chance to tell their side of the story as there may be mitigating circumstances that the employer should take into account before determining the business response in that particular case.
This requirement is not reduced when there is a clear and serious breach. Many businesses are still getting this wrong. It may be absolutely clear that the conduct of the employee warrants termination, such as punching the boss in the face, but the employee is still entitled to be given an opportunity to explain themselves and make any comments BEFORE a final decision is made.
Even in serious instances of bullying, violence, theft and safety breaches, where the business has a zero tolerance approach and is likely to terminate any offending employees, procedural fairness must be satisfied. The Performance Management basics must be followed, including; the appropriate notification a performance management meeting, affording employees the opportunity for a support person at the meeting, outlining the breaches as noted by the business, and allowing the employee to respond to the breaches BEFORE a business decision on the future employment of the staff member is considered.
All line managers and team leaders need to be aware of the need to build this concept of procedural fairness into their performance management responses and to seek advice from managers and third parties if required.
Performance termination: Process and considerations
A proper performance management process is one that takes into account all of the elements procedural fairness including; notice of the meeting, notice of the reason for the meeting, support persons presence and role, payment for attendance at the meeting, communication of breaches, communication of standard business responses, opportunity for employee comment and response, consideration of employee comment and response, a decision based on fairness and equity and written documentation of outcome.
This process is detailed and filled with its own issues and requirements. See; Part 6 – The Issues: Performance Management – https://acapmag.com.au/2023/12/employment-compliance-101-performance-management/, for more detail.
When there is a change in the business that impacts an employees continuing employment this is called a change-based termination (as apposed to a performance termination).
Change-based termination can come as a result of internal business review leading to redundancy or even the sale or closure of the business.
These complicated termination streams will be the topic of Part 9 in this Employment Compliance 101 series
More From This Series
Employment Compliance 101:
Here to Help
ACAPMA members are reminded that ACAPMA has a series of resources from Quick Reference Guides to template letters and investigation and reporting checklists that can assist with ensuring compliant and consistent responses in this area, and can call on the advice and support of the ACAPMA Employment Professionals via firstname.lastname@example.org .
HR Highlights are things to consider, implement and watch out for in your business.
They are provided as general advice and you should seek further advice on your situation by emailing email@example.com it’s free for members.
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Elisha Radwanowski BCom(HRM &IR)
Executive Manager Employment and Compliance