Terminate an Employee’s Contract

When Can I Legally Terminate an Employee’s Contract?

In Australia, both employee and employer rights are clear and comprehensive. In general, Australian employment law is fair and provides adequate protection for all parties. However, it can also be extremely confusing, and figuring out what your rights are can be time consuming and frustrating to say the least.

Fortunately, though, the information is readily available. An experienced employment lawyer will be able to help you figure out your exact rights, and it’s often worth spending a little money to hire one if you find yourself stuck in a complicated situation.

Contract termination is one such complication area, so we’ve decided to provide a brief overview of the subject from the employers point of view. With this in mind, let’s have a quick look at when you can legally terminate an employee’s contract.

  1. If There’s a Termination Clause in the Contract

Many employment contracts contain some sort of termination clause that provides a way out for those who want to terminate their employment early. Sometimes, these come into place if a particular event or action happens, or they may be triggered at an employee or employer’s leisure.

For example, a particular employee’s contract could have a clause that allows early termination without penalty if particular performance targets aren’t met. Note that it’s extremely important to read all contracts before signing them to ensure you know about and are comfortable with any clauses or other termination details they contain.

  1. If the Appropriate Notice Is Given

If you need to terminate an employee’s contract for some particular reason, you need to ensure that you provide an adequate amount of notice. Many contracts include information about the amount of notice that needs to be given, but the Fair Work Act also provides guidance on the topic.

In general, the following notice must be provided at a minimum:

  • One week for under a year of employment.
  • Two weeks for one to three years employment.
  • Three weeks for three to five years employment.
  • Four weeks for over five years employment.

Note that these are only guides, and that other rules do apply in certain cases.

  1. If Both Parties Agree on Early Termination

One important thing to understand is that contracts can be terminated immediately if both parties agree to the termination. This means that it could be a good idea to have a chat to the employee in question to see if they’re willing to split amicably.

  1. If a Serious Breach of Contract Occurs

You may also be able to terminate an employment contract immediately if an employee commits a serious breach of contract or serious misconduct. For example, an employee caught stealing from the office could be fired immediately without any risk of legal action.

Final Word

All things considered, there are quite a few ways to legally terminate an employee’s contract in Australia. Because of this, it’s important to do some research and ensure you’re familiar with your rights before considering firing someone. Speak to a lawyer if you need professional help.