In this scenario, an employee has been employed for about four months, and their performance has been unsatisfactory. The company has decided to terminate his employment. As the employee has not completed their minimum employment period and is not eligible to claim unfair dismissal, is the company still required to provide a reason for the dismissal? Should the process be documented that has resulted in the decision to dismiss? If not, is it advisable to do so in any case?

While the employer is not obliged to provide a reason for dismissal, it is advisable to do so, as it may otherwise provoke the employee to seek alternative remedies concerning the dismissal. This is particularly the case if the employee believes there is an ulterior reason for the dismissal, other than that stated by the employer. The employee would not be eligible to claim unfair dismissal as they have not completed the minimum employment period.

The reason for dismissal should be based on objective criteria. The employer should retain any documentation of the employee’s poor performance, as it may be required as evidence in any subsequent court matter. 

 

General protections

An increasing number of termination of employment claims arise from the general protections provisions of the Fair Work Act. There are a number of reasons why an adverse action claim (which includes termination) potentially presents a greater problem for employers than unfair dismissal claims.

The main reasons why a dismissed employee may pursue an adverse action claim rather than an unfair dismissal claim include: 

  • a wider jurisdiction – adverse action applications are open to prospective and current employees as well as contractors and other workers
  • there is no minimum period of employment required to be served to access this jurisdiction
  • general protections provide broader remedies, including injunctions.
  • while time limits for lodging claims are the same as for unfair dismissal, damages are uncapped and
  • there is a reverse onus of proof under general protection applications, which means the employer is effectively guilty until proven otherwise.

As adverse action applications may eventually be heard before a court, legal costs for proceedings may be a consideration for an applicant. However, there have been instances of self-representation before the Federal Circuit Court.

However, from the employer’s perspective, the cost and difficulty of defending general protection claims are largely caused by the reverse onus provision. The reverse onus of proof is significant in that the employer must provide evidence that excludes the possibility that the termination happened because the employee had a workplace right or exercised a workplace right, or for a discriminatory reason.

 

Other remedies

Other possible remedies available to the employee, depending on the circumstances, include:

  • discrimination under the relevant federal, state or territory equal opportunity legislation
  • under common law for breach of contract.

 

The bottom line

While the employer is not obliged to provide a reason for dismissal, it is advisable to do so, as it may otherwise provoke an employee to seek alternative remedies concerning the dismissal.