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. Finally, collective dismissals are 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, an award, enterprise agreement or contract of employment.
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.
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; 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), regarding disclosures with respect to the Australian Public Service, statutory agencies, Commonwealth authorities, the Defence Force and contractors; and the Fair Work (Registered Organisations) Act 2009 (Cth), relating to disclosures about corruption or misconduct in unions and employer organisations. Whistleblowers can also rely on safeguards under the general protection provisions of the Fair Work Act 2009, if their disclosure pertains to a complaint or inquiry related to their employment, and the protections against ‘discriminatory conduct’ for a ‘prohibited reason’ under the Work Health and Safety Model Laws.
To address criticisms that the existing laws, in particular the private sector whistleblower protections, are insufficiently broad to fully enable whistleblowers to come forward, in December 2017 the government introduced the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 to the Senate. In addition to far-reaching categories of wrongdoing, strengthened privacy protections for the whistleblowers and harsher penalties, the Bill also aims to harmonise the existing Federal legislation and also imposes an obligation on certain corporations (dependent on size and purpose) to have a whistleblower policy. On 12 March 2019, the Bill was enacted into law. To date, there have been no case decisions that have considered or applied these new whistleblower protections.