How to Reduce Legal Risks When Dismissing Employees

Employment is something that is free-will, in most cases. This means that employers are usually free to dismiss any employee for any reason that falls within the law.

However, in some cases, legal termination of employment can sometimes appear illegal. You may have performance-based reasons for the dismissal, but if you can’t prove it with evidence and documentation, you may have a hard time defending yourself agaist a potential lawsuit.

Employment law can be tricky, but it is so important to understand the nuances of this in order to protect your business against future risks. There are many ways that you, as an employer, can minimise and mitigate any risks of potential lawsuits by asking yourself some important questions before making a decision to fire an employee.

Did you follow all of your policies?

Following all policies, procedures and adhering with contracts are so important when looking at the legal implications of dismissing employees.
Following all policies, procedures and adhering with contracts are so important when looking at the legal implications of dismissing employees.

Some of the most important things in the workplace are policies, and one thing you need to make sure you do before dimissing an employee is consistently and uniformly follow all of your employee personnel policies.

By following your policies, it ensures that you haven’t missed any important steps or procedures and that you’re following the same process for any other similar situation or dismissal.

Have staff signed any policies? Did they follow all procedures during their employment? Were you consistent with all your other employees? If your staff signed any documents or policies upon commencement of employment, you may want to check and these and have them reviewed by a legal professional.

Did you document all issues?

Whether its performance or behavioural, one of the best ways to minimise the legal risks associated with dismissing an employee is to make sure all issues are documented and filed.

Any specific incidents or problems should be acknowledged and reported so that they can be later referred to if needed.

Examples of these are;

  • Emails
  • Complaints
  • Phone calls and
  • Safety violations

Has the employee recently made a complaint?

One thing to be very cautious of before terminating an employment contract is whether they have lodged a formal complaint against you. For example, if a manager is racially abusing another employee, the dismissed employee may have a strong case that he or she was dismissed in retaliation to the complaint.

It’s a very grey area, but all complaints should be taken extremely seriously and wisely investigated and documented. If you’re considering dimissing an employee after they’ve made a complaint, make sure that the reason for the dismissal is well within your policies and procedures and well documented. Speak to a law professional about this if you’re unsure.

Is the employee part of a protected class?  

Under Australian law, it is illegal to dismiss an employee on the grounds of race, sex, religion, ethnicity, pregnancy or age. There are also  various state-wide laws protecting against unfair dismissal for sexual orientation and marital status.

When an employee is confused or surprised by a dismissal, they often file a lawsuit claiming they were discriminated against.

Hence, it is so important that your business complies with laws and regulations regarding discrimination in the workplace.

Did you pay the employee properly?

Before dismissing an employee, it’s vital that you check your pay records to ensure the employee has been fully paid for their work to avoid any claims against unpaid wages – the employee will be entitled to those wages, no matter what the reason for the dismissal was.

Ensure you’re always complying with all pay policies and employee contracts regarding payment.

Consulting a lawyer

Employee dismissals can be risky if not dealt with properly, and this is especially true when terminating the employment of someone in a protected class. An experienced lawyer will be able to help you assess your situation and guide you on the best course of action to take.

Le Brun understands that your business is your livelihood. We have helped businesses in Melbourne and Australia-wide protect and set-up their venture. If you are business owner and need more advice or information on employment law or your rights, you can contact us to discuss your needs during a free 30 minute consultation.

We have four offices throughout Melbourne that offer a wide range of legal services. Contact us here to find out more.