When an employee is dismissed, two common reasons given by an employer are poor performance or misconduct. The reason for an employees’ dismissal is important for employees as it may impact their notice pay and entitlements. If an employer is dismissing an employee, the employee must be paid out their entitlements and notice pay, as applicable. When an employee is terminated on the grounds of serious misconduct, the employer does not have to provide any notice of termination. However, the employer does have to pay the employee all outstanding entitlements such as payment for time worked, annual leave and sometimes long service leave. Whether an employer needs to pay out long service leave depends on where the entitlement comes from, usually state or territory long service leave laws.
If the employee has completed at least the minimum employment period and the reason for their dismissal is not valid, the employee may be eligible to pursue an Unfair Dismissal application in the Fair Work Commission. In order to qualify for an unfair dismissal, the employee must have completed at least the minimum employment period with the employer. The minimum employment period is 6 months continuous service at a particular time, for non-small business employers. If the employer is a small business, which employs less than 15 employees at the relevant time, the employee must have completed at least 12 months of continuous service at the particular time.
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When providing an employee with a reason for their dismissal, the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It will not be enough for an employer to say that they acted in the belief that the termination was for a valid reason. In regards to dismissing an employee in relation to conduct, the Commission must determine whether, on the balance of probabilities, the conduct allegedly engaged in by the employee actually occurred. The test is not whether the employer believed on reasonable grounds, after sufficient inquiry, that the employee was guilty of the conduct. The Commission must make a finding as to whether the conduct occurred based on the evidence before it. Inconsistent treatment of previous similar conduct by other employees in the workplace is an issue that can be relevant. For instance, if previous employees were issued written warnings for using their phones during work hours but a particular employee was terminated for this, the Commission may look into whether this constitutes a valid reason for dismissal given the circumstances and the treatment of previous employees.
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Serious misconduct is defined as conduct that is wilful or deliberate and that is inconsistent with the continuation of the employment contract. This conduct is also conduct that causes serious and imminent risk to the health and safety of a person or to the reputation, viability or profitability of the employer’s business. Examples of serious misconduct includes theft, fraud, assault, intoxication at work and the refusal to carry out lawful and reasonable instructions. If an employer dismisses an employee for serious misconduct, the employee is summarily dismissed and will receive no notice pay. However, some employers’ may label conduct as serious misconduct in order to avoid paying out notice. Thus, the Fair Work Commission must assess whether the summary dismissal was a proportionate response to the alleged misconduct. The test for serious conduct remains whether the reason was sound, defensible or well founded. As established in Briginshaw v Briginshaw, the standard of proof remains the balance of probabilities but ‘the nature of the issue necessarily affects the process by which reasonable satisfaction is attained’ and such satisfaction ‘should not be produced by inexact proofs, indefinite testimony, or indirect inferences’ or ‘by slender and exiguous proofs or circumstances pointing with a wavering finger to an affirmative conclusion. Thus, the Briginshaw principle does not raise the standard of proof beyond the balance of probabilities and thus more serious allegations, may require stronger evidence to substantiate.
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In regards to an employees capacity and termination for poor performance, the appropriate test for capacity is not whether the employee was working to their personal best, but whether the work was performed satisfactorily when looked at objectively. For instance, it was held in Boag & Son Brewing pty Ltd v Button that where an employer relies upon an employee’s incapacity to perform the inherent requirements of his position or role, it is the substantive position or role of the employee that must be considered and not some modified, restricted duties or temporary alternative position that must considered. Where an employee has been dismissed for poor performance, another relevant criterion is whether or not they were warned about their performance. These procedural elements form an important part of fairly dismissing an employee.
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