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Termination of employment means the ending of the contract of employment between the employer and employee.
This happens in one of three ways:
1. the employee ends the contract, eg by resigning or retiring;
2. the employer ends it, eg by dismissing the employee or making him/her redundant; or
3. circumstances occur that end the contract, eg the employee dies or abandons employment, or the contract expires because it was for a fixed term and its end date is reached.
Alternatively, either party may end the contract by fundamentally breaching it in some way or by changing it in a way that is so substantial that the existing contract no longer applies and the other party accepts the breach as ending the contract.
Termination of employment due to redundancy is a form of dismissal by the employer. It carries with it the concept of involuntary termination of the employee’s employment. However, rather than being a fault based dismissal, redundancy is usually caused by factors such as economic conditions, business efficiency, or technological development.
Generally speaking, termination of employment due to redundancy occurs where:
Notice periods
It is important that both employer and employee adhere to the required notice period on termination. The Federal minimum standard which has been broadly adopted for award and agreement employees is:
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Not more than one year - at least 1 week;
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More than 1 year but not more than 3 years - at least 2 weeks;
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More than 3 years but not more than 5 years - at least 3 weeks;
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More than 5 years - at least 4 weeks.
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(Note that employees who are over 45 years of age and have worked 2 years or more are entitled to an extra week's notice.)
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Executive contracts are usually subject to at least one month's notice - the particular contract should be referred to.
Types of dismissal
The more common type of dismissal is dismissal with notice or payment in lieu of notice. However, summary dismissal (without notice) may occur where an employee’s conduct amounts to serious misconduct sufficient to justify instant dismissal.
What is Unlawful dismissal?
It is unlawful to dismiss an employee for any of the following reasons:
- grounds of discrimination, including race, colour, sexual preference, age, physical or intellectual disability, marital status, family responsibilities, religion, pregnancy, political opinion, national extraction, social origin;
- temporary absence from work due to illness or injury;
- Union membership or non-membership, or activities related to same;
- absence from work on parental leave;
- temporary absence from work due to involvement in emergency service activities, such as fighting bushfires;
- because the employee has lodged a complaint or commenced proceedings against the employer;
- because the employee refused to negotiate, sign, vary or extend an Australian Workplace Agreement.
What is Unfair dismissal?
If your business is incorporated and employs fewer than 101 employees then unfair dismissal laws do not apply under WorkChoices. If your business is not incorporated then State unfair dismissal laws apply.
If the employee is covered by the federal Workplace Relations legislation and the employer has 101 or more employees, the employee is also protected by federal ‘unfair dismissal’ provisions, subject to certain exclusions, such as fixed-term or fixed-project employees, short-term casual employees, non-award employees whose remuneration exceeds a prescribed amount, employees on probationary employment, and most employees for the first six months of their employment with that employer.
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