The dangers associated with not providing a valid reason for termination definitely makes it worth doing so.

‘Legal’ Termination Costing Employers Thousands

How it could happen to you – and how to help stop it.

No reason for Termination = Problems

Imagine you have a problem employee (perhaps you don’t have to imagine, you might already have one!), who is not up to your performance standards, despite still being on probation. They often come in late, leave early, take sickies and can’t grasp the concept of deadlines. They are frustrating and de-motivating your other employees – and you too.

You want to fix the problem, and the only option you can really see is terminating the employee. So you do, without giving them any reason, which is within your legal rights to do so because they are still within probation.

How the Employee Sees It

However, the employee, who has been fired completely out of the blue in their eyes, is incensed. They haven’t been warned about their behaviour, they’re suddenly out of work and they are looking for someone to blame.

They contact the Fair Work Ombudsman, the Fair Work Commission, the Anti-Discrimination Board – anyone who will listen – and then they lodge a complaint.

Suddenly you’re told you will be out of pocket thousands of dollars in court fees defending yourself, when you did nothing ‘wrong’.

How could this have been prevented?

Whilst employers are within their legal rights to not give a reason for terminating the employment of employees within their probationary period, the dangers associated with not providing a valid reason for termination definitely makes it worth doing so!

Giving no reason for termination of employment is going to spell trouble for the employer because of ‘General Protection’ provisions of the Fair Work Act, introduced by the previous Labor Governments. These provisions require the employer to disprove that the employee was dismissed for having a “workplace right” – such as discrimination on the grounds of race, religion, gender, political opinion – there is a long list of rights prescribed under the Act.

General Protection matters have no limit to the damages that can be awarded by a court and there is no 6 month qualifying period as with unfair dismissal applications, which would rule a probationary employee out.

As the employer has given no reason for termination and may well not have any records of performance counselling sessions, they will be faced with a difficult task of convincing a court that the reasons were legitimate. That will cost time and money, which then results in pressure on the employer to end the matter by paying money for a settlement.

Our Conclusion

Dismissed employees will demand a reason for being fired, and the employer can easily become that reason.  So our advice is, give them a reason before you become the reason! And back it up with records such as diary notes.

Free Download: Termination Letter Template

Need to let an employee go? Use our letter of termination template to ensure you are using the correct format. 

termination letter template