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Unfair dismissal: employers have rights too

Sasha Karen
23 January 2017 2 minute readShare
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If you have an employee who just isn’t the right fit for your business, you’ll have to let them go. However, how can you avoid facing a dreaded unfair dismissal claim?

If an employee is not working out for your business, it may be time to let them go. However, if you let them go too late, you can create legal issues for your business.

However, according to Norgay HR Consulting’s Clare Long, not many business owners fully understand that they too have rights when it comes to terminating employment contracts and protecting themselves against unfair dismissal claims.

“There’s a definition of small business out there that’s for any business under 15 people, a staff member needs to have worked for you for 12 months before unfair dismissal is a remedy for them,” explains Clare.

“Once you hit over that magic number of 15 [employees], six months is the period for which somebody needs to work with you.

A picture of blurry businessmen in a meeting“When I first started working with this sector, I was surprised that many business owners weren’t aware of that.”

If an employee has not worked for your business for that six- or 12-month period, depending on the size of the business, they cannot claim unfair dismissal. As such, from a risk management perspective, this can be the “safest time” to let an employee go, according to Clare.

“It’s not foolproof, but it’s safer than if you let that tick over,” she says.

Clare suggests having automated reminders at the halfway point before unfair dismissal is an option, either at three or six months, to assess whether an employee is a good fit.

It is important to keep an eye on a potentially unfit employee’s tenure, as Clare warns that in some cases, employees have been known to bully employers with the threat of unfair dismissal claims. She suggests not being a “jerk” about the process, but rather being empathetic towards the person you are letting go and ensuring their employment ends on as positive terms as possible.

“For example, if this decision needs to be made in November, that person’s on the market until February, because very few people recruit during December and January,” she says.

“My advice would then be, ‘Do you have an appetite to sweeten this a bit, so that we’re not putting somebody in a really disadvantaged position?’, because they’re not going to be able to find a job until February.”

For more information on where employers stand on the issue of unfair dismissal claims, Clare suggests checking out the federal government’s Fair Work Commission website.

“The Fair Work site is a terrific site, it’s got lots of information.”

And, as Clare points out, it’s also generally the first place a disgruntled former employee will look to for information.

Listen to more insights from Clare on issues of people management, unfair dismissal and other HR matters on the My Business Podcast now!

Unfair dismissal: employers have rights too
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Sasha Karen

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