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By Alex Millman and Lindsay Carroll, NRA Legal

The dismissal of an employee is possibly the single most commonly-litigated dispute between employers and employees. This is hardly surprising, given that dismissal is the most significant action an employer can take with respect to an employee (except, perhaps, hiring them in the first place).

It is also an area rife with misconceptions and myths which result in employers finding themselves on the wrong side of a claim from a disgruntled ex-employee.

Here, we will address five of the most common myths around dismissal and how you can avoid them.

1 – Verbal warnings are enough to justify dismissal

Let us be clear – verbal warnings, if they meet the criteria of a warning, can be enough to back up a dismissal.

The problem that employers face when relying on verbal warnings is proving that the warnings met those criteria, or that they were ever given at all.

In order for a warning to be a warning, it must:

  • identify the relevant aspect of the employee’s performance which is of concern; and
  • make it clear that the employee’s employment is at risk unless the performance issue is addressed.

Verbal warnings inevitably devolve to a case of ‘he said, she said’, and the Fair Work Commission is generally reluctant to uphold them unless the evidence of the employer is overwhelmingly convincing. Save yourself the effort and rely on written warnings.

2 – Employers can get rid of casuals by slowly reducing their shifts

It is not unheard of for employers to try and exit causal employees from their business by slowly reducing the shifts offered to that employee to nil. This is not, however, a tactic without risk.

Casual employees agree to work as and when they are available to work. Conversely, their employer agrees to offer them work as and when that work is available.

Where an employer fails to offer work to a casual employee for a reasonable time, the employee can argue that the employer has broken the agreement between them. In such a case, the employee can argue that the breaking of the agreement is a dismissal and lodge a claim against their employer.

Importantly, in a case such as this, the 21-day period for filing a dismissal claim starts from the day the employee determines that the employer has broken the agreement – generally, the day the employee files their claim.

Employees do have an uphill battle to fight – they need to show that the employer has in fact broken the employment agreement – but if they succeed on this point then the employer will almost inevitably lose.

A casual employee is not limited to arguing that they have been dismissed – ‘trouble makers’ are sometimes also managed out of a business in this way. This puts the employer squarely in the realm of an ‘adverse action’ claim – because the employee’s shifts were reduced because they complained about their employment.

Consequently, ‘phasing out’ troublemakers can be a risky and potentially expensive exercise.

3 – Terminating an employee in their probation period is risk-free

Contrary to popular bellied, probation periods are relevant only to unfair dismissal claims.

For every other claim an employee can make to dispute a dismissal – be it adverse action or discrimination – the probation period is completely and utterly irrelevant.

The most risky version of this is shortening the usual process in order to dismiss someone before the end of their probation, especially in larger companies with reasonably set processes.

If the process is made shorted to sneak the dismissal through before the probation period ends, the employee can argue that they were treated differently from other employees in order to prevent them from becoming eligible to make an unfair dismissal claim.

Another situation is where the proper process is followed, but the employee provides a medical certificate for the day they were to have their meeting to address the employer’s concerns. Relying on the probation period, the employer doesn’t bother with the meeting and simply dismisses the employee. In this case, the employee can claim that they were not given the same treatment as other employees thanks to their medical condition through any of the anti-discrimination commissions and tribunals.

4 – Termination by telephone or text message is an acceptable means of dismissal

A dismissal must be communicated in writing in order for it to be effective – section 117(1) of the Fair Work Act 2009 (Cth) makes this clear.

The courts have also made it clear that ‘in writing’ includes a text message – so therefore what is the problem?

Dismissal by text message is generally – but not always – symptomatic of a lacklustre disciplinary process which generally results in the employee not being provided with procedural fairness or a proper opportunity to defend their employment.

The expectation of a fair process can also result in dismissal by text message being held to be prima facie unreasonable (as, for example, in Pekaj v AAMG Cleaning Group Pty Ltd [2018] FWC 3401). Where a dismissal message lacks sufficient detail, the Fair Work Commission has held such brief messages to be “brutal, gutless and outrageous” (Kaye v Fahd & Ors [2013] FWC 1059).

Dismissal by text message or telephone call will generally only be reasonable where it is impractical for the employee to attend a meeting in person to be notified of the dismissal. This may arise where the decision maker and the employee are separated by significant distance, or if the employee has frustrated all other means of their dismissal being communicated.

Even then, dismissal by text or telephone must be at the end of a process by which the employee has already had an opportunity to defend their ongoing employment. It must be the final stop in a longer process, not the sum total of the process.

5 – An employee who gives notice of resignation may be terminated earlier

This is something of a vexed question, and it often puts employers in a bit of a spin.

Employees sometimes give their employers more notice than they need to. Sometimes, employers want to move things on a bit faster than the employee, and terminate their employment early.

Commercial or administrative convenience is not a valid reason for dismissal, and the Fair Work Commission looks unfavourably on employers who penalise employees who give plenty of notice. This is not a new phenomenon, with the principles on this point going back at least to the case of Nohra v Target Pty Ltd [2011] FWA 2534.

That said, if the employer has a valid reason for dismissal – misconduct, serious misconduct, or poor performance – dismissal can still be a valid course of action. However, you will need to convince the Fair Work Commission that the employee absolutely could not remain in the business until the end of their notice period, which is a tough sell except in the most severe circumstances.

That is not to say that you cannot have a discussion with the employee about the length of their notice, and let the employee know that they can leave earlier if they wish, but any decision to change the date on which employment ends by resignation must rest with the employee.

In the absence of a valid reason for dismissal, or the employee agreeing to bring the end of their employment forward, a safer option is to simply direct the person to go on what is called ‘gardening leave’ – that is, to not attend work during their notice.

Whilst on gardening leave, the employee is still paid as if they were at work, but it removes them from the workplace (and from potentially sensitive information and intellectual property) whilst allowing the necessary operational changes – recruitment of a replacement or a reshuffling of duties – to carry on without egos getting in the way.

If you do end up terminating an employee part-way through the period they have given as notice of resignation, you will need to give them the full period of notice, either worked or paid in lieu – you cannot claim a ‘credit’ against notice given by the employee.

If any of these dismissal myths strike a chord with you, or if you would like further information from our team, please contact the National Retail Association on 1800 RETAIL (738 245).