Unhappy employees at a company always dream of packing their office accessories, stomping out of the office as they shout “Bye Felicia” behind them. The same can be said for managers who are tired of working with troublesome employees and can’t wait to wave them goodbye. Towards the end of the year employees also tend to start seeking out new challenges elsewhere which can also be a cause of conflict regarding leave pay-out. Regardless of the situation, managing employee terminations can be an emotionally exhausting affair, especially the side conducting the termination. A manager’s patience can be severely tested as well as their knowledge of the process during this period. If there is no expert in HR consultancy services to help you with the employee termination procedure, then you might unintentionally leave yourself and your company open to financial liability. To make this process proceed much smoother, here are a few points that you will have to keep in mind if the employee is the one instigating the termination.
Confirm In Writing
If one of your staff members is the one requesting to terminate their employment, then insist that it be done in writing and not verbally. The document must explicitly state the reasons they are ending the contract and their intended last day of employment. Before responding, do seek advice from an HR support services provider if you do not have an internal one. If there is no letter of resignation forthcoming, then request a written notification to make clear why they are leaving the company and the date. A resignation will only be valid where there is an unequivocal intention by the employee to no longer be bound by the employment agreement.
Resignation in Haste
If they are resigning in “Haste” because of a workplace argument or disagreement, then it is recommended that you give them time to cool down and then check that they are still wanting to resign.
The Fair Work Commission noted in case law principles that:
- It may not be reasonable to immediately accept a resignation where there are special circumstances;
- Special circumstances may include words said in anger, under undue pressure or the intellectual capacity of employee;
- Where there are special circumstances, employers should allow a reasonable period of time to pass. The employer may need to enquire whether the employee actually intended to resign;
- Given the special circumstances, whether an employee intended to resign will be judged objectively by the courts; and
- Where a resignation is given and the intention is unambiguous, the employer is not required to make further enquiries.
If an employer fails to take these steps and simply accepts a resignation made in the ‘heat of the moment’, it may be subject to an unfair dismissal application against them. Section 386(1)(b) of the Fair Work Act 2009 (Cth) distinguishes between a genuine resignation and one where an employee has felt forced to resign ‘because of conduct, or a course of conduct, engaged in by his or her employer’, which is in fact considered a dismissal at the initiative of the employer.
In the case of Minato v Palmer Corporation (1995), a retail employee stormed out of the workplace saying to her supervisor that she could “shove the f***ing job up her a***”. When the employer refused to accept the employee’s withdrawal of her resignation, it was found to be ‘harsh, unjust and unreasonable’ and therefore an unfair dismissal under section 385(b) of the Fair Work Act 2009 (Cth).
Check Contractual Obligations
Before you make verbal agreements about anything in regard to a contract termination, do check the Employment legislation on whether their contractual obligations have been met. It is to ensure that the rights of the employee are not being infringed upon and that they give the company their best while still working there, according to their contract. If both parties comply, then this process can proceed smoother and with less risk of any claims against the employer. If the worker has leave days remaining in their contract or you don’t want them around the business during their notice period, check if you can pay them out – this is called ‘payment in lieu of notice’. This ideally is set out in their contract of employment. There are also other commitments to be calculated, such as final salary payments, overtime hours, as well as long service leave according to when the termination of employment will take effect. You MUST pay out all the employee entitlements or you may well receive correspondence from the Fair Work Commission. Many companies operate in risk-sensitive industries and might fear a jaded employee stealing company secrets and sharing them with competitors – it’s always best to have contracts that protect you and keep them up to date and checked.
Exit Interview Session and Duties Handover
An exit interview is a significant meeting, and managers should never be short-sighted about its relevance. Just because an employee wants to leave, do not take their exit interview for granted or take their notes in the discussion as just coming from a disgruntled employee. Having this interview will help you understand the reasons for the departure and the issues raised can be reviewed to improve the business. If these issues are fixed, it means that you have a better chance of retaining your staff. This time is also perfect for the leaving employee to share and transfer their knowledge about their duties to other employees who will be filling their role moving forward.
Clarify Restrictions – Restraint of Trades
Restrictions are absolutely reasonable in contracts with permanent staff members and are made to protect the company. It is not designed to prevent an employee from leaving but that they should not start a company within the industry, presenting a threat to their old employers. It can lead to the employee poaching clients and interfering with relationships. Other companies take restrictions a step further and force the employee to not work within the industry for about a year. It gives the company time to re-establish the relationship with the client. What you however need to be mindful of is that you cannot stop a person from earning a living, so any restriction needs to be reasonable.
These are just some of the points that you will need to remember when working hard to manage an employee termination effectively. You can contact a HR company for advice on how to proceed. Fresh HR Insights is the company you are looking for to be in your corner. With more than a decade in the industry, we can help protect you from Fair Work breaches and managing employee terminations without the drama that follows.