Resources: Blog

Termination of employment letters

Blog
|

In your letter

A termination of employment letter serves a significant purpose in bringing the employment relationship to an end.

A termination of employment letter serves a significant purpose in bringing the employment relationship to an end.

Termination letters are frequently relied upon by employers and employees alike when a claim for unfair dismissal is made. Given their tendency to arise in legal proceedings, it is important that these documents are correct, provide as much detail as possible and meet the requirements under the Fair Work Act 2009 (Cth) (FW Act).

Termination date and notice

The termination letter must serve its purpose – that is, it must clearly specify that the employment has been terminated and state the day on which the termination of employment comes into effect.  

Section 117 of the FW Act provides that an employer must give the employee written notice of the day of the termination of employment, that is, the day the employee’s employment ends. The date of the termination letter (written notice) must reflect the actual date the notice is given and the termination date cannot be before the written notice is given.

Notice of termination of employment should, to the extent it is reasonably practicable, be given to an employee by delivering it personally by hand. Alternatively, the notice may be left or sent to the employee’s last known address (ideally, by registered post).

Where notice of termination of employment is to be given to the employee, the termination letter should set out the minimum period of notice and whether the notice:

  • Is given in time – that is, the employee is to work through their notice period and the employment will end at the end of the notice period; or
  • Is to be paid in lieu – that is, the employee is not required to work their notice period, the employment will end immediately and an amount equivalent to the notice period will be paid to the employee.

Written confirmation should be provided to the employee soon after the employee is advised of their dismissal so that there is little dispute about when the dismissal takes effect.

For example, in Porter v Ramdhas Poli Pty Ltd [2019] FWC 5681, an employee argued that she was protected from unfair dismissal because she had received notice of termination in a letter sent by email on 10 May 2019 and that, by that date, she had met the minimum employment period. However, the Fair Work Commission (FWC) found that the employee was told in a meeting on 3 May 2019 that her employment would cease and that this was confirmed in an email dated 5 May 2019. The FWC dismissed the employee’s application as she was actually dismissed prior to the completion of the minimum employment period and was therefore not protected from unfair dismissal.

Reason for termination

The termination letter should also set out the reason for the employee’s dismissal. To this end, it must correctly reflect the valid reason for the termination of the employee’s employment.

Notifying an employee of the reason for the termination of their employment is a basic tenet of procedural fairness. An employee must be notified of the valid reason for the termination of their employment before the decision is made and they must be provided with an opportunity to respond.

Under section 387 of the FW Act, when considering whether a dismissal was harsh, the FWC must take into account whether there was a valid reason for dismissal and whether the person was notified of that reason.

For example, in Khan v Oakleigh Fruit Barn [2019] FWC 3458, the FWC found that the employee was not notified of the reason for her dismissal. The uncontested evidence provided by the employee was that she was told at the end of a shift that she would only be required for another two weeks and to look for another job. When the employee asked why, she was advised that the owner was not happy with her. At the employee’s request, she was provided with a letter confirming the termination of her employment which again did not specify a reason for her dismissal.

The FWC found that the employee was unfairly dismissed due to the employer’s “significant failures” which included a lack of valid reason and failure to notify the employee of the valid reason before the decision was made to dismiss her. The FWC ordered the employer to pay the employee $4,522.82 (gross) plus superannuation.

Other matters

Employers may wish to include in their termination letter the requirement for the employee to return company property (keys, uniform, documentation etc) and if relevant, remind the employee of their continuing obligations in relation to the non-disclosure of confidential information and other post-employment conduct, as further risk mitigation measures.

Lessons for employers

Employers should take care when drafting termination letters. Clear termination letters avoid confusion in relation to key dates and reasons for dismissal which may arise if a dispute about the dismissal later arises.

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

Similar articles

FWC finds that employee’s employment ended at end of fixed term and was not dismissed

Time goes by so slowly

Access to the unfair dismissal jurisdiction under the Fair Work Act 2009 (Cth) is on the basis that the employee is “dismissed” from the employment. A jurisdictional objectional can be raised if the employee has not been actually dismissed by the employer.

Read more...

Commission finds employer’s suspicion of an employee’s misconduct was not a valid reason for dismissal

Under suspicion

If considering taking disciplinary action due to an employee’s misconduct, it is critical that an employer makes a decision based on wrongdoing as opposed to a mere suspicion of wrongdoing.

Read more...

Commission finds termination letter sent to inactive email address was not notification of dismissal

You've got mail!

Given the serious nature of matters such as dismissals, employers should, as far as reasonably practicable, communicate such matters in person to ensure that there is no confusion about when the employee was made aware of any issues with their employment.

Read more...

Commission finds mask mandate to be a lawful and reasonable direction

Mask up

Employees have a duty to comply with lawful and reasonable directions from their employer. In the current COVID-19 context, a key concern for employers is whether it is lawful and reasonable to issue directions related to safety matters arising from the pandemic.

Read more...

Lack of consultation rendered mandatory vaccination requirement unreasonable

Talk before you walk

Consultation with employees always plays an important part when introducing changes in the workplace. Under work health and safety legislation, employers have a duty to consult with their workers as far as reasonably practicable in relation to health and safety matters.

Read more...

Offers of alternative employment in redundancy cases

An offer you can refuse

In most cases of redundancy, employers have an obligation to consult with affected employees about the proposed redundancy and consider whether or not anything can be done to mitigate or minimise the impact on the employee, such as redeployment or obtaining other acceptable employment for the employee.

Read more...

Let's talk

please contact our directors to discuss how ouR expertise can help your business.

We're here to help

Contact Us
Let Workplace Law become your partner in Workplace Relations.

Signup to receive the latest industry updates with commentary from the Workplace Law team direct to you inbox.