6 Fair Reasons for Dismissal in Australia

Here are 6 fair reasons for dismissal in Australia. Dismissal of employment isn’t always unfair in Australia. In many cases, employers may have valid reasons for terminating the employment relationship

Farrah Motley, a qualified Australian employment lawyer, wrote this article. Farrah has appeared in the Fair Work Commission. She has provided legal representation to employers and workers.

Key takeaways

• do not dismiss employees because of protected attributes such as race or religion
• follow the legal processes when terminating employment
• afford procedural fairness to staff
• remember that not all dismissals of employment are unfair
• fair reasons for dismissal can still lead to claims that dismissal was not fair

Reason 1: the employee cannot fulfil the inherent requirements of their role

An employer may fairly dismiss an employee if they cannot meet the requirements of their role. The job description may set out the inherent requirements. Or, the employee’s day-to-day duties may have changed over time. In that case, employers should review what the employee is actually doing as part of their role.

The employer can fairly dismiss an employee if the tasks are essential and the employee cannot fulfil the requirements.

Examples of a failure to meet the essential requirements of a role include a failure to:

• carry out tasks in a way that is safe for both the employee and other workers
• work as part of a team
• act in good faith and meet obligations of fidelity
• meet productivity and quality requirements
• manage stressful situations

It is important to assess whether the person’s role means that a particular requirement is essential. For example, working well as part of a team may not matter for a cleaner who works alone.

Reason 2: The employee has poor performance

An employee who has poor performance is a common reason for employers to terminate employment.

Employers must follow an appropriate process to avoid a claim for unfair dismissal. This process should involve setting expectations with an employee and monitoring their performance. It should also involve giving an employee an opportunity to respond.

Employers may act if the employee’s performance continues to be poor. This may include dismissing the employee.

It’s important to be able to show that terminating employment was not harsh, unjust or unreasonable. If an employer dismisses an employee on valid grounds, the dismissal of employment is likely to be fair. Employers support this by following a good dismissal process.

Reason 3: the employee has engaged in serious misconduct

A fair reason for dismissal includes serious misconduct. Serious misconduct entitles an employer to immediately dismiss an employee. The employer does not have to give notice in cases of summary dismissal.

Dismissal of employment is likely to be fair if the employer dismisses an employee for serious misconduct. This includes behaviour such as theft, sexual harassment, or other serious grounds.

It’s important that:

• if the Small Business Fair Dismissal Code applies, the employer has a reasonable belief of the bad conduct
• in all other situations, the employer used a process to confirm that serious misconduct probably happened

An employee who has engaged in serious misconduct will have difficulty arguing that their dismissal was unfair.

Reason 4: the employer no longer requires one person to carry out the role

An employer can make employees redundant if their role is no longer required. The employer fairly dismisses an employee when there is a genuine redundancy.

A genuine redundancy involves:

• following any consultation process required by law
• the employer no longer requires anyone to perform the role
• properly paying notice and entitlements to the employee

Employers who don’t follow proper procedures when business slows down may still unfairly fire an employee. Employers must ensure the reasons for dismissal are fair as well as the process.

Reason 5: the employer has the right to terminate the employment contract.

An employer may have a right in an employment contract to dismiss an employee.

For instance, high-income earners often have termination clauses in their employment contracts. These clauses allow their employer to terminate employment with notice.

An employer must strictly follow the contract to avoid unlawful termination. Further, fairly dismissing an employee will never involve reasons such as illness, religious beliefs or other protected rights. An employer must avoid any discussion concerning those matters when terminating an employment agreement.

It is also important to pay out any outstanding leave or entitlements on termination.

Reason 6: the employer ends employment during probation

Employees can only make an unfair dismissal claim where:

1. a small business has employed them for at least 12 months; or
2. a larger employer has employed them for at least 6 months.

A minimum employment period is an important part of making an unfair dismissal claim.

The Fair Work Commission cannot hear the claim even if the dismissal was harsh unjust or unreasonable. People often make objections on these grounds.

However, employers must still ensure that they do not dismiss employees because of a protected right. For example, employers must not fire employees because of their colour, race or religion.