Employers often dread firing employees. Here’s what you need to know to avoid an unfair dismissal claim and ensure the process goes as smoothly as possible. By Shane Conroy
It’s an unpleasant reality of practice management that not every employee you hire will work out. Whether it’s a matter of serious misconduct or ongoing poor performance, you’ll likely need to dismiss an employee at least once during your career.
Firing employees can be an emotional experience for both employee and employer and, if handled incorrectly, can result in a stressful legal dispute. That’s why it’s so important to understand your legal obligations as an employer, and to ensure that you follow best-practice processes whenever you need to dismiss an employee.
The first important thing to understand is the difference between unlawful termination and unfair dismissal.
General protections exist in the Fair Work Act that prevent employers from firing people due to their race, gender, sexual orientation, religion, political allegiance, trade union membership or temporary absence from work due to illness or injury. Dismissing an employee for any of these reasons would likely be considered an unlawful termination.
Unfair dismissal, on the other hand, is when an employee is terminated in a harsh, unjust or unreasonable manner.
“Whether a dismissal is harsh, unjust or unreasonable, it all comes down to case-by-case assessment,” says Will Barsby, national special counsel, consumer disputes at Shine Lawyers. “The test really is whether the punishment fits the crime. Say, for example, you have a dental hygienist who arrives late for work twice because they are having issues with transport. To fire them immediately without warning would be considered harsh, unjust or unreasonable. However, if that dental hygienist stole money from the practice, then that would be grounds for summary dismissal.”
Both unlawful termination and unfair dismissal could come with a heavy financial penalty for offending employers.
“The Fair Work Commission tends to be very critical of employers who just expect their employees to know what their policies are and then fire them on the back of not complying with something they’ve never documented.”—Jessica Kerr, director, Sinclair + May
“If an employee files a claim with the Fair Work Commission, you’re going to have to incur legal expenses if you want to be represented,” says Barsby. “You’ll also need to take time out of your day to attend some form of conciliation conference to try to resolve the matter. And if it comes to a financial settlement, compensation is capped at 26 weeks’ salary of the position the claimant was terminated from.”
That’s a financial burden that many dental practices simply can’t withstand. When firing employees here’s what you need to do to ensure you don’t fall into that trap:
1. Put employment contracts in place
As a first step, it’s vital to have an employment contract in place whenever you hire a new employee, says Jessica Kerr, director of Sinclair + May.
“Employment contracts should specify circumstances in which employment can be terminated due to a material breach. This would be serious misconduct such as theft, fraud or harassment.”
2. Document your policies
You can’t expect your employees to follow the rules of your practice if they are not documented and widely available to your team. Ensure you have policies in place that govern all your major processes—everything from how you expect staff to behave on social media to how you deal with poor performance. “The Fair Work Commission tends to be very critical of employers who just expect their employees to know what their policies are and then fire them on the back of not complying with something they’ve never documented,” says Kerr.
3. Pay attention to probation periods
Small businesses with less than 15 employees (including regularly employed casuals) can dismiss employees for inappropriate behaviour or poor performance within the first 12 months of their employment without the risk of facing an unfair dismissal claim.
“For larger practices, always set up a six-month probation period in employment contracts,” says Kerr. “You can’t dismiss employees during the probation period without being at risk of having an unfair dismissal claim being brought against you.”
4. Clearly communicate your expectations
If you want an employee to meet your performance standards, you need to clearly communicate your expectations to them in a formal document.
“Whether a dismissal is harsh, unjust or unreasonable, it all comes down to case-by-case assessment. The test really is whether the punishment fits the crime.”—Will Barsby, national special counsel, Shine Lawyers
“If your expectations are not being met you’ll have something to refer to with the employee,” says Bethan Flood, general manager at Prime Practice HR. “It means you’ll both be on the same page and you’ll be able to spot any areas where the employee may need further development or training.”
5. Provide three written warnings
If the employee continuously falls short of your performance expectations, it may be time to issue a written warning. “Three written warnings are generally considered best practice,” says Kerr. “Set out how they are not meeting their performance goals, what they can do to improve, and what is expected of them in the future.”
6. Offer extra training and support
After identifying where an employee’s performance is falling short, it’s a good idea to offer extra training, support and mentoring. This helps the employee meet your expectations, says Kerr. “If they still haven’t improved, then it could be time to hold a termination meeting.”
7. Stay cool, calm and collected
Employers often dread termination meetings, but the key to a successful experience is a combination of preparation and compassion.
“It’s never an easy conversation for either side,” says Bethan Flood. “A termination discussion shouldn’t take hours. Be concise and transparent, but don’t be rude. They are still a member of your team, and regardless of personal feelings, should be treated with respect.
“You should hold the meeting somewhere private and have a support person for yourself and the employee. There should be no surprises in a termination meeting, so if you have gone through the right process, the employee will be aware that their performance has not met the agreed targets.
“And don’t apologise. If you’ve supported, trained, mentored and appropriately warned the employee; you are not doing anything wrong.”