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There is no ‘one size fits all’ approach to terminating an employee for serious misconduct or underperformance. However, there are some factors that you should consider to ensure you follow a fair and appropriate termination process.
If you operate a small business with less than 15 employees, you must follow the Small Business Fair Dismissal Code when terminating an employee.
Your reason for termination is important as it may have an impact on your employee entitlements. For example, generally notice will not be payable for an employee terminated for serious misconduct.
There is often confusion between what amounts to serious misconduct as opposed to when an employee is underperforming.
Outlined below are some factors to consider when terminating an employee.
Under the Fair Work Regulations serious misconduct has its ordinary meaning. Serious misconduct involves an employee deliberately behaving in a way that is inconsistent with continuing their employment.
To be considered serious misconduct, the behaviour by that employee must be:
Serious misconduct may include:
Underperformance is when an employee is not doing their job properly or is behaving in an unacceptable way at work. This may include:
Summary dismissal for serious misconduct has immediate effect. It is a severe step to terminate an employee’s employment without notice so you should get legal advice before taking these steps.
Termination for serious misconduct should be considered on a case-by-case basis.
The steps outlined below may assist you in determining when dismissal on the basis of serious misconduct is warranted and how it should be approached.
Organise a meeting to discuss the problem directly with the employee to avoid any misunderstandings or assumptions being made.
The employer should:
Taking into consideration:
If the employees’ action was serious misconduct that warrants summary dismissal, you will need to draft an appropriate termination of employment letter.
Include in the letter:
Establishing a system to manage underperformance can be a useful tool to ensure that your business runs smoothly.
Any performance management issues should be dealt with as soon as possible as employees can sometimes be unaware that they are not performing well and so are unlikely to change their behaviour. The longer the poor performance is allowed to continue the more difficult it becomes to resolve any issues.
Consider the following checklist when managing an underperforming employee.
|Employee/Employer act or understanding||Possible cause||Action|
Does the employee understand what is expected of them in their job?
Is there a clash of personalities?
Does the employee have the skills and training required to do the job?
Is there a wider problem with the work environment?
Is there any evidence of workplace bullying or harassment?
Does the employee have any personal factors that may be affecting their ability to do their job?
Review or create a job description.
Investigate if there is a lack of understanding of the job role and responsibilities.
Explore possible training opportunities.
Ask yourself what the work environment is like.
The employer needs to consider:
Organise a meeting to discuss the problem.
The employer should:
The employee should understand:
The employer should give the employee the above points in writing.
Hold the meeting in private.
The employer should try to create a non-threatening environment, away from distractions and interruptions.
Ensure that notes of the meeting have been taken.
Establish meeting outcomes.
The employee needs to be given an opportunity to discuss and respond to problems.
Reinforce any positive aspects of the employee’s performance.
Talk about the issue not the person.
When discussing performance issues make sure the employee:
The employer and the employee need to come up with a plan together to try and address the issues raised in the meeting.
An action plan for managing underperformance can:
Ensure that the above is put into writing and agreed to by the employee.
The employer must ensure that:
A meeting to discuss the employee’s performance should be conducted even if there is improvement.
Ensure all follow up meetings are recorded in writing.
Identify any further issues that may have arisen.
Continue to monitor performance overtime.
If the employees performance has not improved before terminating an employee for underperformance the employer should consider if:
If you feel you have satisfactory grounds for termination on the basis of underperformance you will need to:
HIA HR Docs can assist members with relevant employment policies and procedure documents relating to performance management. Members can purchase a Performance Management – Reviews Kit which includes a Performance and Misconduct Policy and a variety of templates you can use in your business.
Additionally, there is a Performance Management – Complaints and Investigations Kit which includes 7 policies and a wide range of template documents you can use.
Find out more about how HIA HR Docs can help you manage your employees or contact your local HIA Workplace Advisor.
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