Seeing as we deal with it day in and day out, we thought we’d give you a quick run down of the most commonly used ways to terminate an employment relationship.
- Mutual consent
As a starting point, parties to an employment agreement can agree at any time that the employment relationship should come to an end. The agreement must, however, be truly mutual.
An instance of misconduct doesn’t, on its own, undermine or destroy the relationship of trust and confidence between an employee and employer. An employer may, however, terminate an employee’s employment following multiple warnings for misconduct. Depending on what the employment agreement or relevant policy provides this usually follows the sequence of a first written warning, final written warning and then termination.
- Serious misconduct
The key question to ask in relation to serious misconduct is: did the conduct undermine or destroy the trust and confidence required in the employment relationship? If it did, it may be considered serious misconduct. An employee can be summarily dismissed (without notice) if, after a full and fair investigation and disciplinary process, it is found that on the balance of probabilities the employee committed serious misconduct.
Unsatisfactory work performance will usually justify dismissal – but the employee must have been given graduated warnings of the employer’s dissatisfaction and an opportunity to improve. This is a minimum 3 month process. Two things to remember: just because an employer is performance managing an employee, doesn’t mean disciplinary action must be an outcome, however the employer won’t be able to terminate unless it has been going through the graduated warnings over the 3 month period. Also, don’t get instances of performance and misconduct mixed up, the employer must run a separate process for each (i.e. an employee may be on a final written warning for misconduct and a first written warning for performance).
An employee’s position may be disestablished as the result of a restructure, whether this is an internal restructure or the result of the business being bought/sold. An employer must always have genuine reasons for disestablishing an employee’s role. The disestablishment of an employee’s role may result in them being made redundant. While the process can seem daunting and complex, the key aspects of the process can be defined as – Consultation, Feedback, Consideration, Selection and Confirmation.
Abandonment is where an employee walks away from their job with no intention of returning. Some employment agreements have a clause which states that the employee’s employment may be terminated after a specific number of days of unauthorised absence. When an employee has just not turned up the employer must make an effort to contact them. There’s no legal number of days before they’re considered to have abandoned their job, but it’s usually three days or more.
This is a concept which is often used incorrectly. Frustration of contract occurs when an event occurs which so significantly changes the nature of the contractual rights and obligations from what the parties could reasonably have contemplated that it would be unjust to hold the parties to the contract. In this case, it is by operation of the law that each party is discharged from its obligations under the contract.
- Medical incapacity
The law does not require an employer to hold open an employee’s job where the employee is unable to fulfil their role due to long term illness or injury. The employer must, however, be at the stage where it can “fairly cry halt”. This includes following a fair and reasonable process which considers the requirements of the role and any alternatives, up to date medical information and the employee’s feedback during the decision making process.
- Serious misconduct outside of the workplace
Misconduct outside of work could lead to termination if the conduct damages the relationship of trust and confidence between the employer and employee, or the conduct brings the employer into disrepute, or the conduct is not appropriate for the employee to be doing their job properly.
- Irreconcilable breakdown or incompatibility
In rare and unusual cases, termination may be justifiable on the grounds of irreconcilable breakdown in the employment relationship. Basically, the relationship is absolutely beyond repair. Merely being unable to get along with other employees or fit into the culture of an organisation will not be enough. For example, in one case the Employment Court found that the breakdown substantially caused by the employee’s uncompromising and largely irrational behaviour ensured that the organisation could not function efficiently.
Workplace Law team
If you have any queries in respect of the above, or any other Workplace Law issues, please contact a member of Lane Neave’s Workplace Law Team:
Employment: Andrew Shaw, Fiona McMillan, Gwen Drewitt, Maria Green, Hannah Martin, Joseph Harrop, Holly Struckman, Alex Beal, Giuliana Petronelli, Abby Shieh
Immigration: Mark Williams, Rachael Mason, Daniel Kruger, Nicky Robertson, Julia Strickett, Ken Huang, Mary Zhou, Shi Sheng Cai (Shoosh), Sarah Kirkwood, Janeske Schutte, Lingbo Yu
ACC: Andrew Shaw
Health and Safety: Andrew Shaw, Fiona McMillan