Termination issues down under

first_imgTermination issues down underOn 3 Jul 2001 in Personnel Today Comments are closed. Nick Ruskin and Siobhan Mulcahy of Melbourne law firm Philips Fox Lawyersgive an overview of the issues surrounding the termination of employment inAustralia and explain how the law is governed at different levels and bydifferent jurisdictionsThe law governing termination of employment in Australia is covered byseveral jurisdictions – federal and state legislation, and common law. Atfederal level, termination of employment is covered by the Workplace RelationsAct 1996 but the legislation generally does not apply to executive level staff.Most states in Australia also have state legislation dealing with terminationof employment that covers employees under state awards or those earning lessthan A$71,200, or just over £26,000 (this amount may vary from state to stateand is increased by the inflation rate 1 July each year). Dismissed staff not covered by the legislation may look to common law forprotection. As a general rule, both federal and state legislation make it unlawful toharshly, unjustly or unreasonably dismiss an employee. There are also variousstandards of procedural fairness that must be met when dismissing an employee. The federal system The Australian Industrial Relations Commission has jurisdiction to deal withall issues relating to dismissals covered by the Workplace Relations Act. Exclusions There are several categories of employees excluded from making anapplication under the Workplace Relations Act. These include: – Employees serving a probationary period of up to three months or less – Casual employees who have not been employed on a regular and continualbasis for more than 12 months – Employees engaged on a fixed-term basis – Trainees, and – Employees who earn more than $71,200 and where employment is not governedby Australian industrial “awards” or agreements made by theAustralian Industrial Relations Commission which legally bind the employer. Notice In cases of serious misconduct, where it would be unreasonable to requirethe employer to retain the employee for the required notice period, theemployment may be terminated summarily, or without notice. In other cases, theWorkplace Relations Act provides that an employee must be given a certainminimum notice period, which depends on age and length of service. Valid reason The Workplace Relations Act also requires that the employer shows a validreason for dismissal. Valid reasons include the employee’s conduct or capacity (performance) orthe operational requirements of the employer’s business (redundancy). The employer must establish that the reason is objectively justifiable. Asubjective decision or mere preference that things be done differently will notbe considered a valid reason for termination. The Workplace Relations Act makes it illegal to terminate an employee forany of the following reasons: – Temporary absence due to illness, injury or parental leave – Union membership or activity – Non-membership of a union – Acting as a staff representative – Filing a complaint against an employer – Anti-discrimination reasons including race, colour, sex, sexualpreference, age, physical or mental disability, marital status, familyresponsibility, pregnancy, religion, political option, national extraction orsocial origins, and – Refusal to negotiate an Australian Workplace Agreement – that is, anagreement made with an employee, approved by a government body and not throughcollective bargaining). If an employee is dismissed for one of these reasons the Federal Court canhear the claim. Procedural fairness The Industrial Relations Commission will take account of whether theemployee was notified of the reason for termination and whether they were givena chance to respond and put forward any mitigating circumstances. Commissiondecisions indicate that an investigation must show genuine procedural fairnessand cannot be a mere “going through the motions” in order to entrapan employee. Assessing whether procedural fairness has been accorded may extend to examiningthe employer’s conduct leading up to the termination, including a transparentwarnings process. In cases where the process is extremely harsh or unfair, thedismissal may be found to be harsh, unjust or unreasonable regardless of theexistence of a substantive reason. The commission bases its decisions on theprinciple of “a fair go all round”, a term actually set out in thelegislation. Remedies If an employee is successful in an unfair termination application, thecommission may order reinstatement or re-engagement with back pay or, wherereinstatement is impracticable, the payment of compensation to a maximum of sixmonths wages. The Federal Court can provide the same remedies in an unlawfultermination case except it can also impose a penalty of up to $10,000 (£3,700).State jurisdictions Industrial tribunals similar to the Australian Industrial RelationsCommission exist in most states. The principles of state unfair dismissal legislation are broadly the same asthe principles of the federal system outlined above. In New South Wales andQueensland, however, the law is extended to regulate “unfair”contracts. The New South Wales Industrial Relations Commission recently awardedA$10m (£3.67m) to an former senior executive of Microsoft applying its broadjurisdiction to the facts of this case. The NSW and Queensland commissions have jurisdiction to declare void or varycontracts they find to be unfair. The jurisdiction covers contracts that areunfair when they are made as well as contracts that operate unfairly. Thisextends to situations where the contract operates unfairly at termination ofthe employment. Common law Employees who do not fall within state or federal legislation must look tothe terms of their employment contract and their interpretation at common lawto deal with any issues arising from the termination of their employment. No questions of fairness or reasonableness will apply in thesecircumstances. The amount of notice required by the employer will be as set outin the contract. In the absence of an express notice provision, reasonablenotice is required. In determining reasonable notice, a court will consider factors such as thenature of the position and the skills required, location, length of service,age and level of mobility in the employment market. Conclusion The Australian laws of termination clearly distinguish between employees whoare covered by legislation dealing with the unfairness of a dismissal and thosewhere employment is subject to the terms of the common law. The laws alterfrequently and a possible change to the federal government later this year mayresult in a spate of changes. Edited by Clare Murray, employment law partner at Fox Williams and editorof www.hrlaw.co.uk , Fox Williams’ onlineemployment law information service Related posts:No related photos. Previous Article Next Articlelast_img


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