When Do I Have the Right to Terminate an Employee’s Contract?

Terminate an Employee’s Contract

Australian employment contracts tend to provide a lot of protection to employees, but it’s important to realise that employers have rights as well. For example, two of the most important employer rights are workplace surveillance and the right to expect reasonable performance from every employee.

If an employee isn’t meeting the expected performance standards, you might be able to terminate their contract without advance warning. However, there are conditions. And, there are other reasons why you may want to and have the right to terminate a contract.

Below are a few common situations when you have the right to terminate an employees contract:

  1. With the Provision of Adequate Notice

In the absence of another clause written into an employment contract, an employer must provide a minimum amount of notice when terminating a contract. If a contract specifies a particular notice period, it must be given. If not, you need to give:

  • At least one weeks notice for less than a year of employment.
  • At least two weeks notice for one to three years employment.
  • At least three weeks notice for three to five years employment.
  • At least four weeks notice for more than five years employment.

On top of this, employees aged 45 or older who have been employed for a minimum of two years are entitled to an extra week of notice. If you believe you aren’t receiving your proper rights, this is when you should speak to your employment lawyer.

  1. If the Employee Is Employed Casually or Seasonally

Although minimum notice periods apply to most employees, anyone who is employed on a casual or seasonal basis may be fired effective immediately, with no notice whatsoever. Those on a fixed contract and those performing daily hire work can also be terminated without notice.

  1. If Serious Misconduct Occurs

Meanwhile, employment can also be terminated immediately if an employee is guilty of serious misconduct, which comes in a number of forms. These include, but aren’t limited to:

  • Theft
  • Fraud
  • Assault
  • Continually ignoring instructions

Note, however, that you will still have to pay out any accrued leave and other benefits in these cases.

Is There Anything Else I Need to Be Aware of?

Although terminating an employee’s contract may appear simple, there are a few other things to be aware of to ensure you’re not breaking any laws. For starters, note that every industry is different and has slightly different rules regarding contract termination.

On top of this, an employer terminating an employee’s contract must provide written notice. This can be in the form of a letter delivered personally or posted or left at the employee’s last known address. Note that employees only need to provide verbal notice.

As an employer, you have every right to terminate an employees contract, especially if they are underperforming or have committed a serious act of misconduct. However, firing still needs to be done in accordance with national employment laws, which can be a little confusing.

In short, you need to make sure that you provide adequate notice, pay out all entitlements and have a strong and valid reason if you decide to go for immediate termination. Consider speaking to a legal professional for more advice.