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Dismissing employees

Termination, dismissal and redundancy obligations

Termination occurs when the employment relationship comes to an end. This can be when the employee hands in their resignation, when a fixed term contract comes to an end, or when an employee is dismissed for a particular reason. 

On this page:

  1. Resignation  
  2. Dismissal  
  3. Fair dismissal    
  4. Termination entitlements and notice periods  
  5. Resignation and forfeiture provisions  
  6. Claiming unfair dismissal  
  7. Unlawful termination    
  8. Redundancy and severance pay     
  9. Procedural fairness

This information is for private sector employers in the Western Australian state industrial relations system.  If you do not know if it is relevant to you, read our information on who is in the Western Australian system.

Resignation

An employee has the right to resign at any time and for any reason. The important issue for the employee is to ensure that the correct amount of notice is provided to the employer. This may be detailed in an award, agreement or contract of employment. There may also be a requirement to provide notice of termination in writing.   

If the employee does not give the correct period of notice, the employer may be entitled to withhold monies owing to the employee, in the form of salary and/or annual leave payments. 

Dismissal

A dismissal occurs when the employer terminates the employment contract. The employer should ensure that they have a valid reason for dismissing the employee and take steps to ensure procedural fairness. This will minimize the risk of the employee bringing a successful unfair dismissal claim against the employer. 

A claim can be made by an employee that they have been harshly, oppressively or unfairly dismissed from employment, and this can only be determined on a case by case basis.

Fair dismissal

Valid reasons for dismissing an employee include their capacity to do the job, their conduct or the operational requirements of the business. 

Capacity and conduct

If the employee is being dismissed because of poor performance, the employer should ensure that there has been a valid reason for the dismissal and provide evidence that the dismissal has been dealt with in a fair and reasonable manner. The following guidelines should be followed: 

  1. Advise the employee that there is a problem with their performance or conduct;  
  2. Provide the employee with an opportunity to respond;  
  3. Assist the employee to rectify the problem by providing additional training or explaining what the expected work standards are;   
  4. Ensure the employee has a reasonable chance to rectify the problem;   
  5. If the poor performance or conduct persists, explain that the employee is at risk of being dismissed if there is no improvement;  
  6. Provide a warning of potential dismissal in writing;   
  7. Give the employee an opportunity to respond to the warning and a reasonable chance to rectify the problem;   
  8. Allow the employee representation in meetings with management; and  
  9. Keep a record to ensure the accuracy of discussions and all forms of communication.   

These steps do not apply to cases of serious misconduct (for example, involving theft, fraud, violence or serious breaches of occupational health and safety procedures).  Refer to the section on Termination entitlements.

Operational requirements

An employer may dismiss an employee on operational grounds when they have made a definite decision that the employee’s job will no longer be done by anyone.  This is referred to as a redundancy.

An employer who has decided to make an employee redundant must inform the employee and discuss the likely effects of the redundancy.  This must happen as soon as practicable after the employer decides to make the employee redundant. 

For further information refer to the section on Redundancy.

Termination entitlements and notice periods

Where the employment is terminated by the employer, except in cases of serious misconduct, the employer must provide the employee with:

  1. The appropriate notice period or pay in lieu of notice; 
  2. Up to one day’s paid time off during each week of the notice period to seek other employment;
  3. Payment of any unpaid wages, redundancy pay if applicable, and any unused annual or long service leave entitlement; and
  4. On request, a written statement specifying the period of employment and the classification or type of work performed.

How much notice is required?

An employee must be given written notice of termination under the Fair Work Act 2009 according to the following table (subject to Exemptions outlined below):

Employee's period of continuous service

Minimum period of notice

Not more than 1 year

At least 1 week

More than 1 year but not more than 3 years

At least 2 weeks

More than 3 years but not more than 5 years

At least 3 weeks

More than 5 years

At least 4 weeks

These notice periods override any lesser period specified in an award, agreement or contract of employment. However, if the award, agreement or employment contract specifies a longer notice period, employers then need to comply with this instead.

An employee over 45 years of age with at least two completed years of continuous service with the employer is entitled to one additional week of notice on top of the periods shown above.

Pay in lieu of notice

Depending on the award, agreement or employment contract, the employer may pay out the notice period in lieu of giving notice. The payment must be at least the amount the employer would have been liable to pay the employee at the full rate of pay for the hours the employee would have worked had the employment continued to the end of the required notice period.

Payment in lieu of notice does not apply in cases of summary dismissal due to serious misconduct (see below). 

Exemptions

The employer does not have to give the above periods of notice to the following types of employees:

  1. Casual employees; 
  2. Contract workers who have reached the end of their contract; 
  3. Trainees who have completed their period of training; or
  4. Employees terminated due to serious misconduct. 

However, casual employees must receive any period of notice specified in their award or agreement. 

Leave entitlements

Any accrued annual leave and long service leave entitlement that has not been taken by the employee must generally be paid out on termination.

Accrued sick leave is generally not paid out, although employers should check the provisions of the relevant award, agreement or contract of employment.

Job search entitlement during termination

Employees are entitled to up to one day of paid time off during each week of the notice period to seek other employment. The time off should be taken at times that are convenient to the employee after consultation with the employer.

If the employee has taken more than one day of paid leave to seek other employment during the notice period, the employer can request proof of attendance at an interview.  A statutory declaration is considered to be sufficient proof. If such proof is not provided by the employee, the employer can withhold payment for the period of time in question.

Statement of employment

On request from a terminated employee, the employer must provide a written statement specifying the period of employment and the type of work performed by the employee.

Resignation and forfeiture provisions

When an employee terminates their employment, they must provide the required notice as specified in their award, agreement or contract of employment.  Failure to do so may entitle the employer to withhold monies owing from either wages or other entitlements.

Forfeiture provisions may apply in circumstances such as failure to provide the correct notice, leaving employment prior to completing the notice period, or resigning without giving notice.  Forfeiture provisions can vary depending on the award, agreement or contract of employment.

Claiming unfair dismissal

Employees covered by the state industrial relations system can make a claim of unfair dismissal in the Western Australian Industrial Relations Commission (WAIRC). Claims need to be lodged within 28 days from the date of dismissal.

The dismissed employee or their representative must complete the official form, lodge it with the WAIRC and then provide a copy to the employer.

The WAIRC may accept a claim outside the 28-day period in some circumstances. This is usually determined by a formal hearing where the employee must establish that it would be unfair not to allow the claim to be made.

Probationary employees - A probationary employee is entitled to make a claim for unfair dismissal. However, the WAIRC is required to take the formal period of probation, of up to 3 months, into account when determining the claim.

Employer response

Employers have 21 days after receiving a copy of the claim to lodge a response with the WAIRC and to provide a copy of the response to the employee who made the claim.

How does the WAIRC deal with a claim?

When the employer has filed their response and if the employee wishes to proceed with the claim of unfair dismissal, the matter will generally be listed for a conciliation conference. This is an informal meeting conducted by a Commissioner or Registrar that attempts to resolve the matter by discussion between the parties.

If the matter is not resolved it will be listed for a formal hearing after which a Commissioner will make a decision about whether or not the dismissal was unfair.

Remedies

If the dismissal is found to be unfair, the WAIRC can make an order that the employee be reinstated to the same position the employee held before the dismissal. If reinstatement is not practical, the WAIRC may make an order requiring the person to be re-employed in a suitable position.

In addition to reinstatement or re-employment, the WAIRC may make an order for payment of remuneration that has been lost because of the dismissal and to maintain the employee’s continuity of service.

If reinstatement and re-employment are both impractical, the WAIRC may make an order for compensation for loss or injury caused by the dismissal (to a maximum of 6 months’ remuneration).

Enforcement

If an employer does not voluntarily comply with the orders of the WAIRC, the orders are enforceable through separate proceedings in the Industrial Magistrate’s Court and the employer may be penalised for non-compliance.

Representation

Employers and employees can represent themselves in unfair dismissal proceedings or engage a legal practitioner or registered industrial agent.

Costs

Employers and employees are generally responsible for their own legal and other costs in unfair dismissal proceedings.

Forms and further information

The official forms and general information about unfair dismissal claims are available from the WAIRC.  Telephone 9420 4444 or 1800 624 263 (country freecall), or visit its website www.wairc.wa.gov.au.

Unlawful termination

It is unlawful for an employer to dismiss an employee for reasons which are considered to be discriminatory.  

An unlawful termination can occur if a person is dismissed for any of the following reasons: 

  1. A person’s race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin [refer to exceptions below];
  2. Being absent from work during maternity leave or other parental leave;
  3. Temporary absence from work because of illness or injury;
  4. Temporary absence from work to engage in a voluntary emergency management activity;
  5. Membership of a trade union or participation in union activities outside working hours or, with the employer’s consent, during work hours;
  6. Non-membership of a trade union;
  7. Acting or having acted as a representative of employees; and
  8. Filing a complaint or taking part in proceedings against an employer for alleged violation of laws or regulations.

EXCEPTIONS

It is not unlawful to terminate a person’s employment on these grounds if the reason is based on the inherent requirements of the job or the person is employed by a religious body and their employment is terminated to avoid injury to religious beliefs.

Claiming unlawful termination

As of 1 January 2013, employees wishing to claim unlawful termination will have 21 days to make an application to the Fair Work Commission. Employees dismissed prior to this date will have 60 days.

Claiming discrimination in the workplace 

An employee can make a complaint about discrimination in the workplace to the Western Australian Equal Opportunity Commission, including a complaint that their employment has been terminated on discriminatory grounds.  The written complaint must be made within 12 months from the date of the incident or termination.  Contact the Equal Opportunity Commission on 9216 3900 or visit its website www.equalopportunity.wa.gov.au.

Serious misconduct

Serious misconduct is wilful or deliberate behaviour by the employee that is inconsistent with the continuation of the employment relationship.

This could include conduct such as:

  1. Causing a serious safety or health risk, including being intoxicated or taking drugs at work;
  2. Damaging the reputation, viability or profitability of the employer’s business;
  3. Theft, fraud, or assault; or
  4. Refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

Summary dismissal

Dismissing someone without notice due to serious misconduct is known as summary or instant dismissal.  It is important for employers to seek independent professional advice prior to a summary dismissal if they are unsure whether an employee’s actions constitute serious misconduct.

Payment in lieu of notice does not apply to employees terminated due to serious misconduct. 

Leave entitlements and summary dismissal

Unused annual leave must generally paid out to an employee when their employment ends, including pro rata annual leave for a partially completed year of service. However, pro rata annual leave is not required to be paid out if an employee is dismissed due to their serious misconduct.   

Redundancy and severance pay

An employee is redundant when their employer has made a definite decision that the employee’s job will no longer be done by anyone.

Employers should not use redundancy to dismiss an employee whose work performance or conduct is unsatisfactory as this could result in a successful claim of unfair dismissal.

Consultation with employees and unions

Before a redundancy occurs, an employer must consult employees who are directly affected and any unions nominated by affected employees to represent them. The consultation should cover the reasons for the proposed terminations, measures to avoid or minimise the terminations and/or any adverse effects on the employees concerned.

Consultation includes providing employees and their representatives with all relevant written information about the proposed terminations. However, employers are not required to divulge any confidential information that could harm their business.

Providing notice of redundancy

A redundant employee must be given the minimum period of notice, based on years of continuous service with the employer, in accordance with the notice provisions specified in Termination entitlements. 

Employee leaving during the notice period

An employee who is made redundant may terminate their employment during the notice period and will still be entitled to the same severance payments they would have received if they had remained with the employer until the end of the notice period. However, the employee will not be entitled to payment in lieu of notice or payment for any of the notice period that is not worked.

Job search entitlement during redundancy

Employees who are given notice of termination for a reason that is related to redundancy is entitled to up to one day of paid time off during each week of the notice period to seek other employment. The time off should be taken at times that are convenient to the employee after consultation with the employer.

If the employee has taken more than one day of paid leave to seek other employment during the notice period, the employer can request proof of attendance at an interview.  A statutory declaration is considered to be sufficient proof. If such proof is not provided by the employee, the employer can withhold payment for the period of time in question.

An employee who has been advised that they will be made redundant but who has not been given notice of termination is entitled to up to 8 hours of paid leave to be interviewed for further employment.  The 8 hours need not be consecutive. The employee must provide their employer with evidence that would satisfy a reasonable person that they are entitled to the leave. 

Severance pay

If an employer has a total of 15 or more employees (including casual and part-time), a redundant employee is entitled to severance pay according to the following table:

Period of continuous service

Minimum number of weeks’ pay

Less than 1 year

Nil

1 year and less than 2

4

2 years and less than 3 years

6

3 years and less than 4 years 

7

4 years and less than 5 years 

8

5 years and less than 6 years  

10

6 years and less than 7 years  

11

7 years and less than 8 years 

13

8 years and less than 9 years  

14

9 years and less than 10 years  

16

10 years and over  

12


 
The calculation of severance pay excludes bonuses, allowances, loadings, overtime, penalty rates and any other ancillary payments.

The severance payments shown in the above table override any lesser period specified in an award, agreement or contract of employment.  However, if the award, agreement or employment contract specifies a higher severance payment, employers need to comply with this instead.

Employers with fewer than 15 employees are not required to make severance payments.  However, they are required to meet the other obligations outlined in this guide, such as notice periods, paying out unused leave, consulting with employees, and providing paid job search leave.

Severance Pay Exemptions

An employer does not generally have to provide severance pay to:

  1. Employees terminated due to serious misconduct;
  2. Employees with less than one year’s service;
  3. Probationary employees;
  4. Apprentices and trainees; or
  5. Casual and contract employees.

However, some awards, agreements and employment contracts may require severance payments to these employees.

Severance pay may not be payable where a business is sold or transferred to a new owner and (a) the employee continues employment with the new owner who recognises the employee’s prior service or (b) the employee rejects a comparable offer of employment with the new owner which recognises the employee’s prior service.

Transfer to lower paid duties

If an employee is transferred to lower paid duties due to redundancy, the employer must provide notice or payment in lieu before transferring the employee to lower paid duties, for the period of notice the employee would have been entitled to if the employment had been terminated.  

If the employer chooses to make payment in lieu of notice, the transferred employee must be paid the new lower rate plus an additional amount equal to the difference between the previous higher rate of pay and the new lower amount for the relevant number of weeks.

This amount must be worked out on the basis of:

  1. The employee’s ordinary working hours;
  2. The amounts payable to the employee for the hours worked, including allowances, loadings and penalties; and
  3. Any other amounts payable under the employee’s contract of employment.

Varying the amount of severance pay

An employer can apply to the WAIRC to have the severance payment varied in the following circumstances:

  1. The employer does not have the capacity to pay; or
  2. The employer obtains acceptable alternative employment for an employee.

Notifying Centrelink

Where an employer decides to terminate 15 or more employees for economic, technological or structural reasons they must advise Centrelink in writing before the terminations take place.  Failure to notify Centrelink may result in a financial penalty.

The following information needs to be provided:

  1. Reasons for the terminations;
  2. Number and categories of employees affected; and
  3. When the terminations will occur.


Procedural fairness

The principles of natural justice or procedural fairness are required to ensure that decision making in relation to termination, dismissal and redundancy is fair and reasonable.   The employer has an obligation to base their decisions on compelling evidence that can be substantiated if required. 

An employee who will be adversely affected by a decision should be provided with all relevant information and provided with the opportunity to respond to an allegation or significant change affecting their employment. 

Need more information?

If you require more information about termination, dismissal and redundancy, please contact Wageline on 1300 655 266.

The content on this page is the same as the content on the Being dismissed page in the Employee section of this website.