How to Avoid Unfair Dismissal

How to Avoid Unfair Dismissal

You hate doing it, but you need to dismiss an employee. This employee is late almost every other day, and the projects they complete look sloppy, as if no effort was put forth. You try everything you can to help your employee improve, but it seems as if they just don’t care. After the dismissal, the employee claims it was unfair and unwarranted. What happened?

Most employers would rather not terminate an employee‘s employment, but sometimes it is unavoidable.  Firing someone is never pleasant. But when you have a poor performer on your hands, you can’t afford to waste your time or money by keeping them around. If you are heading down the termination path with an employee you must ensure that you minimise the risks of the employee claiming the dismissal was unfair.

There are certainly right and wrong ways to go about letting someone go. Get it wrong, and you could cause unnecessary heartache for the both of you — or worse, end up in court.  So how can you protect yourself against unfair dismissal claims? Take these precautions and and you can ensure that you have given your employee every chance to improve at the same time can demonstrate that you have done everything possible to ensure that the process has been fair.

Applying for unfair dismissal

There are plenty of reasons for employers to terminate an employee but they generally fall into two main categories – misconduct and performance issues. Employees are able to claim unfair dismissal if your business employs:

  • A staff of less than 15 people (excluding any irregular casuals) and the employee in question has worked for you for 12 months or more OR
  • A staff of 15 or more (again excluding any irregular casuals) and the employee has been working for you for six months or more.

After an employee is dismissed, he or she has 21 days to file an unfair dismissal claim.

Know the Small Business Fair Dismissal Code

Small businesses follow a slightly different set of codes than larger businesses. The Small Business Fair Dismissal Code protects employers who follow the directions outlined in the code from unfair dismissal claims.

The code states that a small business owner can immediately terminate an employee if his or her conduct is considered serious enough. A serious charge would include theft, violence, fraud and other serious behavioural misconducts involving occupational health and safety. Any allegations of theft, violence or fraud should be reported to the police. Of course, you must have reasonable grounds to prove the employee’s misconduct.


For less serious offenses, such as general conduct or job capacity, owners must give employees a verbal warning of potential termination, though a warning in writing is more preferred, that if the employee does not improve, he or she will be terminated. The employee must then be given a chance to respond to the warning, and then the two may work together to rectify the problem.

Remember, you must have evidence to show that you gave sufficient warning of the employee’s potential termination. Keep statements and any emails regarding the situation. You never know when you might need them.

Outline all policies clearly

If you are having trouble with employee conduct, it might be because the company policies are not properly outlined. Vague policies make it difficult for you to dismiss anyone because employees can claim they did not know their actions were against company policy.

Break down all company policies in an easy-to-read format and distribute them to all employees when they first begin. The information should be neatly organised so employees can look up harassment, dress code and attendance policies with ease. Be sure to include what steps will be taken before termination and any actions that employees can take to avoid termination.

Do not forget to post all that information online or have additional copies available in the human resources department. Should an employee lose the original packet, he or she can pick up another copy.

Though it may seem obvious to you, not all employees and managers know who responsible for recruiting, disciplining and firing employees. Make sure everyone knows the chain of command and who they should be reporting to. This will help clear up confusion about expectations.

Implement a performance management plan

When you first speak to an employee about potentially dismissing them, you need to set up a performance management plan to give your employee a chance to improve. Should you still need to terminate this employee, the documented plan shows that you tried to help your employee. This checklist will help you identify whether your reasons for dismissal are sound.

Set up parameters and goals for improvement. If the employee is constantly late, then he or she must demonstrate punctuality. You may also want that employee to report any projects or tasks directly to you so you can see if your employee’s work is improving.


In some cases, retraining may be necessary. If so, treat your employee as if it was his or her first day and retrain from day one. Go back over the original job description and outline exactly what employees are expected to do and how they will be judged on productivity.

Keep notes of employee conduct

Terminating an employee can sometimes devolve into a he-said-she-said argument that has no clear winner. You say the employee turned into multiple projects long past the deadline; the employee says that never happened. Without proper documentation, it can be difficult to terminate an employee without fearing an unfair dismissal claim.

As you begin to see that an employee might not be cut out for your company, start keeping track of his or her misconducts. Use a word document, daily journal or spreadsheet to keep track of any problems the employee encounters. Make a note of any time they showed up late or were not dressed appropriately.

You should also be recording any interactions between yourself and this employee. Make notes of your conversations and the way your employee acts around you. Is he or she acting in a professional manner, or is the employee short with you or rude? Is this employee asking a lot of questions and trying to improve his or her work? Share your notes with your own supervisor so he or she is aware of any progress – or lack of progress – being made.

Whatever your decision is, be sure it is swift and justified. If an employee’s actions require immediate dismissal, do not hesitate but make sure that you follow necessary procedures.  Do not wait to dole out verbal or written warnings either. Make sure you are keeping copies of any written warnings or follow-ups so you will have them should an employee be terminated.

Dismissing an employee is never enjoyable, but it is sometimes necessary. Be diligent about documenting employee behaviour and make sure all company policies are clear and straightforward. This is the best way to avoid unfair dismissals.

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