• Unfair dismissal claims in the Australian Industrial Relations Commission can be made by employees covered by a federal industrial instrument and Commonwealth public sector employees and employees who are not covered by an industrial instrument, provided the annual remuneration of the employee immediately prior to termination, did not exceed the prescribed amount ($94,900 as of 1 July 2005) (The Workplace Relations Act 1996).

 
• Unfair dismissal claim in the Industrial Relations Commission of NSW can be made employees covered by a state industrial instrument, New South Wales public sector employees, and employees who are not covered by an industrial instrument, provided the annual remuneration of the employee immediately prior to termination, did not exceed the prescribed amount ($94,900 as of 1 July 2005) (The NSW Industrial Relations Act 1996).

• Whether or not there was a valid reason for the termination,

 
• Whether or not the employee was notified of the reason;
   
• Whether or not the employee was given an opportunity to respond;

 
• If the termination was on the basis of unsatisfactory performance, whether or not the employee had been previously warned about that unsatisfactory performance; and

 
• The degree to which the size of the employer's business, or the absence of dedicated human resource management specialists, may have had an impact on termination procedures.

Temporary staff and contractors are not employees, and will not be eligible to make an unfair dismissal claim. However, creative titles or service arrangements with respect to employment will not work to deny persons who are employees from being entitled to make such a claim.

An effective contract of employment should set out the title of the employee's position, the duties of the employee, and the basis upon which the position and duties of the employee may change over the period of employment. The contract should contain a provision that in the event that the position and/or duties of the employee may change, the written contract will continue to apply. This will reduce the possibility of the employee from claiming that a new contract of employment was entered into.

A Probationary period for new employee is a very effective way employers can make sure they employee the suitable employee without opening the employer to the risk of an unfair dismissal claim. If a new employee does not perform within the probationary period, the employer may terminate their employment and the employee will not be eligible to make an unfair dismissal claim.

It is illegal to terminate an employees employment for any of the following reasons:

• temporary absence form work;
• union membership or activity;
• union non-membership;
• acting as an employee representative;
• filing a complaint against the employer;
• Refusal to participate in negotiations for an Australian Workplace Agreement;
• anti-discriminative reasons on the basis of colour, race, sex, sexual preference; age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

Termination on the basis of any of the above should be avoided at all costs. Further, to be valid, the termination must be based on the employees conduct or capacity.

Terminating an employee's employment summarily should be avoided if at all possible to reduce the risk of an unfair dismissal claim.

Conduct of a serious nature that may warrant a summary dismissal may include:

• theft;
• violence;
• assisting a competitor's business;
• serious negligence.

An employer should never act in haste. The conduct of an employee may appear to warrant an instant dismissal, but if possible, an investigation should be undertaken to back up any ensuing termination.

Employers should consider implementing a workplace policy on termination. The policy and the procedures contained therein should be adequate and relevant to the workplace and the kind of work undertaken by the employees. The policy should be disclosed to all employees and regularly reviewed and updated to take into account any changes that may take place in the workplace.

If a policy is implemented, it is important that the employer acts in accordance with the policy, otherwise the risk of an unfair dismissal claim by an employee who has been terminated in accordance with the policy will be increased, and the success of defending the claim reduced.

Ignoring a workplace policy, especially one that relates to discrimination, work performance, or conduct of employees, will put the employer at an added risk if a claim is made by a former employee.

Although these steps are not mandatory, if it can be shown that they were followed, an employee may find it difficult to prove that the termination by the employer was harsh, unjust or unreasonable:

Warn and counsel: There is no such rule as three warnings and you're out. If an employee is not performing their duties satisfactorily, an employee should be given the opportunity to improve on their conduct and performance. The number of warnings depends upon the individual circumstances of the employment and the employee.

Investigate: If allegations have been made against an employee, investigate the circumstances of that employees conduct before making any rash decisions to terminate.

Written reasons for termination: Make sure the employee knows exactly why their employment has been terminated. Giving far-fetched, unsubstantiated, or vague reasons for termination allows the employee more scope to challenge the termination.

Interview the employee: Present to the employee reasons as to why their employment is under consideration, and give the employee an opportunity to meet with the employer to discuss all the issues. If there have been allegations or accusations made against the employee, allow the employee the opportunity to respond. It should be made clear well in advance of the interview that termination is being considered, and that it is a likely or possible outcome of the interview.

Keep detailed Records: Accurate and detailed records should always be kept. Records of all complaints should be kept as well as records and notes of all investigations and interviews undertaken throughout the process. It will assist greatly in defending a claim for unfair dismissal, if it can be shown that the employee was warned of possible termination, and was also involved in the process of the employer arriving at that decision.

Notice: It is very important that the employee is provided with the correct notice period. If the employment contract is silent on the notice that should be given, a reasonable amount of notice is required, and this is to be determined taking into account the type of work performed by the employee.