Dismissal

Any worker can be dismissed if their work performance is unsatisfactory or if the employer has genuine financial and operational reasons.

However, it is against the law to dismiss someone or select them for redundancy because of a personal characteristic covered by the Equal Opportunity Act 2010 and federal anti-discrimination laws.

For example, you cannot retire someone, threaten to retire them or do anything to make them retire because they have reached a certain age. It is also against the law to dismiss an employee because of an injury.

Managing underperformance, misconduct, redundancies and dismissal can be stressful for all concerned. Employers need to know their rights and responsibilities, as well as best practice guidelines, to manage risk and achieve the best possible outcome.

Tips to avoid discrimination

  • Only dismiss an employee for poor work performance or serious misbehaviour.
  • Document unsatisfactory work performance and discuss it with the employee, including the steps they can take to address the issue.
  • Where possible, try to accommodate reasonable requests for workplace adjustments or flexible work

Related resources

Download a Best Practice Guide on Managing Underperformance from the Fair Work Ombudsman.

Small business owners should check the requirements of the Small Business Fair Dismissal Code at the Fair Work Australia website. 

The Commission also offers training for employers and has a range of publications and resources on discrimination and the law.

Performance

If an employee’s work performance or behaviour is unsatisfactory, the employee should be counselled as soon as possible. Good practice is to:

  • have a clear written policy on disciplinary, warning and dismissal arrangements 
  • ensure that the policy is applied fairly and consistently to all staff members.

Example of counselling requirements

Alexandra worked as a property manager for two years before she became unwell and required hospital treatment for bipolar disorder. Her case manager contacted her employer to let him know that Alexandra would require two weeks’ sick leave. Alexandra’s employment was terminated shortly afterwards. Alexandra had not been counselled about poor work performance before being dismissed.

Injury

It is against the law to dismiss an employee because of an injury. An injured worker needs to be given time to recover and reasonable adjustments should be made so they can return to work.

Medical retirements or dismissals must comply with:

  • anti-discrimination laws
  • workers' compensation legislation 
  • the relevant award or enterprise agreement. 

You must also have independent medical advice that confirms that the injured worker is no longer able to meet the requirements of the job and:

  • no adjustments can reasonably be made to enable a person to continue working, or 
  • the person poses an unacceptable risk to safety in the workplace.

Age

It is against the law for employers to retire someone, threaten to retire them or do anything to make them retire because they have reached a certain age. This includes making the working environment so unpleasant that they are forced to retire. 

The Commission’s Right Smart Employers Toolkit has specific resources on mature-age workers, including tips on avoiding age discrimination in the workplace.

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