There is no provision in the Fair Work Act 2009 that says you must give three written warnings before terminating an employee. It’s a myth.

What the Act does require is that you follow procedural fairness when terminating an employee.

What is procedural fairness?

The decision-maker (usually the employer) must give the employee an opportunity to be heard before making a decision that affects their employment.
A fair hearing generally means:

• Giving the employee prior notice that a decision affecting their employment will be made
• Disclosing the critical issues to be addressed and any information that is credible, relevant, and significant to the decision
• Conducting a substantive hearing or investigation (oral or written) where the employee has a reasonable opportunity to present their case
  

While the Act does not require you to offer a support person, refusing a request for one may work against you if a claim is made before the Fair Work Commission. It’s best practice to suggest the employee bring a support person. (The rules around a support persons will be covered in the next article.)

Once you have all the facts, determine whether the matter is substantiated, unsubstantiated, or partially substantiated. Then decide on the appropriate response:

• Summary (instant) dismissal is only appropriate for theft, assault, or drugs/alcohol breaches — and only if your policies clearly allow for it
  Consider the employee’s length of service: someone with 5+ years and a clean record may require multiple performance interventions, such as a first warning followed by a second and final warning
• For an employee who has just passed the minimum employment period (6 months for larger employers, 12 months for small businesses) with ongoing performance issues, a first and final warning with follow-up after one month may be sufficient. During this month, many employers place the employee on a Performance Improvement Plan (PIP)

Warning: Getting this wrong can be costly. Mistakes in terminating an employee can result in tens of thousands of dollars in unfair dismissal claims. If the matter goes to a hearing, your business name will also be published, as Fair Work Commission decisions are public. No two situations are the same — you need to be very careful when terminating an employee.

IR Support

Full Cotton Australia levy payers are entitled to a 15-minute IR consultation with Wayne Schwalbach from Employment Mediation Services on 0447 935 416 for workplace guidance.