Grounds for Termination
The grounds for dismissal can include capacity, performance, misconduct (including serious misconduct) and redundancy. In addition to a valid reason for dismissal, the dismissal must be fair, in that it is not “harsh, unjust or unreasonable”. Furthermore, employees must not be dismissed on the basis of a protected attribute or as retaliation for exercising a workplace right.
Not applicable in Australia.
A performance related dismissal requires the giving of notice, or payment in lieu of notice if the payment in lieu is allowed by the contract itself. Where payment is made in lieu of notice, the date of termination is the date on which the notice is given, and the moneys are paid to the employee.
Is severance pay required?
Severance pay may be required if the employee has been made redundant and has an entitlement under the Fair Work Act 2009 (Cth), an award, enterprise agreement or contract of employment.
Is a Separation Agreement required or considered best practice?
Where an employee, whose employment has terminated (for whatever reason), receives a payment, which is higher than the employee’s minimum legal entitlements, it is almost always advisable to seek that a separation agreement (commonly known as a deed of release in Australia) be executed by the employee in exchange for that additional payment. The execution of the separation agreement will reduce (but not entirely remove) the overall degree of exposure of the employer from adverse legal consequences arising from the termination of employment.
What are the standard provisions of a Separation Agreement?
A properly drafted Separation Agreement (which includes a release) will ensure that 1) the employee acknowledges that their termination package is in full satisfaction of any claims they may have against the employer; and 2) the employee releases the employer from liability under any such claims. The following terms are standard in a separation agreement: 1) release and indemnity; 2) non-disparagement obligations; and 3) confidentiality obligations. Each of the above terms can be can drafted such that they are in favour of a particular party, or they can be mutual.
Remedies for employee seeking to challenge wrongful termination
The common law action of “wrongful dismissal” is available to all employees. However, due to the cost of pursuing a claim in the civil courts, it is not often pursued. Damages for wrongful dismissal can in some circumstances be limited to the amount of notice provided in the employee’s contract of employment or, if no period of notice is specified, “reasonable notice”. There are some exceptions, which allow for greater damages to be awarded, depending on the circumstances. This is particularly so where under the contract the employee had a reasonable expectation of employment for a long period of time.
Whistleblowers currently have protections under three legislative instruments at the Federal level; the Corporations Act 2001 (Cth); the Public Interest Disclosure Act 2013 (Cth) (disclosures in respect of the Australian Public Service, statutory agencies, Commonwealth authorities, the Defence Force, and contractors) and the Fair Work (Registered Organisations) Act 2009 (Cth) (disclosures about corruption or misconduct in unions and employer organisations).