If well written, termination letters can influence an advisor or claim mediator to recommend against proceeding with the claim or convince an employee they have been heard and properly considered.

However, there are some frequent issues that add to the risk for employers and can lead to an unhappy outcome if the FWC ultimately hear and decide the claim.

#1: Not providing a termination letter

The FWC must consider various criteria in deciding an unfair dismissal claim. If an employer fails on any of these, the Commission must find it was harsh, unjust or unreasonable, and consequently an unfair dismissal. One of these considerations is if the employee was “notified of the reason for the dismissal”.

A termination letter acts as clear evidence of having met this requirement. Without this, an employee will often argue they were not properly informed, and frustrated employers must mount arguments to demonstrate they were.

It is much simpler when this has evidently occurred. The employee will often attach the letter to their claim, which helps ensure the employer’s position is clear before they have even responded.

#2: Recycling old letters or over-reliance on templates

Template letters are a good starting point (our member portal has plenty) and help overcome staring at a blank page. However, in deciding an unfair dismissal claim, the FWC needs to establish whether the employee was advised termination of their employment was being considered, had an opportunity to influence the outcome, and their views were genuinely considered.

The termination letter can support this by including certain information such as a short summary of the employee’s views and a short response to those points. This does require a bit more work and enables the employee to feel heard and understood, which can also be helpful to reduce the risk of a claim.

Including evidence of a discussion about the proposed dismissal helps ensure clarity that the employee had a genuine opportunity to respond and influence that decision, and that the employer didn’t simplify arrive at a ‘dismissal’ meeting with their mind already made up.

#3: Serious misconduct

Termination often follows a situation where managers have invested time and energy in an employee and are aggrieved because they have been poorly treated in return. Additionally, we want to send the employee a message “You can’t go around doing this – it has an impact on others!”.

For these reasons it is tempting to label the behaviour ‘serious misconduct’ (or ‘summary dismissal’ or ‘gross misconduct’) and rely on these labels to withhold payment of the employee notice period.

However, there is a legislative definition of serious misconduct, and it is a very high bar to meet. An employer who labels the termination simply ‘misconduct’ and pays any relevant notice period doesn’t have to prove the issue rose to the level of ‘serious misconduct’ and is on much safer ground.

#4: Mitigating factors

The FWC must also, as part of considering an unfair dismissal claim, consider “any other matters” that are relevant.

Previous Commission decisions tell us there are factors they expect an employer to consider in deciding a disciplinary outcome. Even if those factors did not change the decision, it is important they are noted in the termination letter, as this also acts as evidence of having given full and proper consideration to the matter.

For example, the employee’s length of service and employment record is one factor the Commission may consider.

#5: Supporting evidence

In a recent unfair dismissal matter, an airline terminated an employee following multiple warnings. In their letter proposing termination of her employment (‘show cause’ letter), and in the final termination letter, they did not include any reference to those warnings as part of the reasons for termination. The FWC found this, and other elements of the case, were procedurally unfair.

The employee was not aware this was one of the reasons the airline was considering termination, and consequently did not have an opportunity to put her response to this issue in the process.

Where an employer is relying on prior warnings or objective evidence such as customer complaints or performance data, it is prudent to raise these and hear an employee’s response. The dismissal in the case was found to be unfair, and the Commission ordered reinstatement of the employee to her role.

Business owners and managers must often wear many hats – accountant, counsellor, safety officer, marketer, mediator, and so on. We recognise that having enough expertise in each of these is a challenge. Our workplace relations team provide prompt, practical and to-the-point advice to help you deal with disciplinary or employment issues.

How we can help

The Victorian Chamber has a team of Workplace Relations Consultants with a wealth of experience that provide expert advice, support and templates to members. For more information on termination consultation or other ways in which VCCI can support your business, call us today on (03) 8662 5222.