Saying goodbye – managing exiting employees
All employment will eventually come to an end and there are a range of issues that should be considered to facilitate an employee’s smooth transition out of the workplace.
As with any business decision, it is important to analyse the potential risks attached to each course of action. The way in which the employment relationship ends may provide grounds for an employee to raise an unfair dismissal, unlawful termination, or contractual benefit claim.
This can also occur in situations where the employee has seemingly resigned or abandoned their employment. Therefore, it is important for HR practitioners to be familiar with the types of claims that employees can make and ensure that the termination process complies with the relevant legislative requirements.
Notice of the end date (in writing)
Notification of the end date needs to be provided to (or by) the employee. While it may seem obvious, it is important that is clearly communicated from both a practical and a legal perspective.
For example, a fixed-term contract may have an explicit end date but if it is not discussed, the employee may believe that their ongoing services are still required. If the employee then continues to present at work after this date and the employer allows it, there may be an argument that the contract has rolled over into a permanent position.
To ascertain the appropriate notice period, businesses should review any applicable awards, agreements, contracts and legislation. The Fair Work Act 2009 (Cth) (FW Act) provides the minimum notice periods for national system employees; underlying any other industrial instruments or contracts of employment, as well as situations where employers are exempt from giving notice.
The legislation also provides that written notice of the day of termination must be given to an employee in one of the following ways:
- delivering it personally
- leaving it at the employee’s last known address
- sending it by pre-paid post to the employee’s last known address.
The simplest way to provide notice is as part of a face-to-face meeting with the employee where they can be handed a written letter. However, in certain circumstances this may not be possible.
Although not ideal, ensure that the employee at least has some opportunity to discuss the termination and the circumstances surrounding it, and follow up with written notification.
The Fair Work Commission has considered instances where employers have, for example, sent text messages as “written” notice of termination.
Case law has shown this will only be considered appropriate in exceptional circumstances. In the example of Sokolovic v Modestie Fashion Australia, Commissioner Cambridge found a text message to be inappropriate in absence of any compelling reason why parties were not able to communicate in a face-to-face conversation.
In this instance, termination by text was described as “pretty appalling”, showing the employer lacked “courage” and sufficient confidence in their decision to discuss it directly.
Perfect time to survive the “economic storm”
Often either the employer or employee will want to finish up the employment before the notice period expires. In the case of the employer there is generally an option to provide an employee with payment in lieu of notice when terminating an employee, or to pay out the notice where an employee is resigning. Where the employee wishes to finish up early, the employer can agree to waive the notice or in some circumstances withhold monies for notice not given.
Whilst many contracts provide for deduction of wages where notice is not given, the legislative provisions regarding this are complex and as such advice should be sought.
Communicating with staff – farewells and recognition
It is important to remember the broader impact of an employee leaving the business. Colleagues and clients will query sudden absences if no explanation is given. Therefore, it is best practice to have a communications plan in place.
This would typically commence with a discussion with the individual about how they would like to announce their departure. When coming up with a communication plan, consider the following:
- What is the message you are communicating? Who is leaving? Why are they leaving? When are they leaving?
- Who will be most impacted by the departure?
- What will the timeline be? Who needs to be informed first? How quickly will the information spread by word-of-mouth?
- What is the best method of informing people — email, staff briefing or individual meeting?
Colleagues may also appreciate an opportunity to celebrate and say farewell to the leaving co-worker. A morning tea, farewell card, group gift or speech from a relevant manager may be welcomed.
If it is a long-serving employee it may be appropriate to acknowledge their contributions to the company over the years. The way in which existing employees perceive the termination process will have an impact on their own productivity and motivation. Often consideration needs to be given as to what information is given to co-workers for them to understand why and how the termination has occurred. For clients, depending on the level of management the relationship requires and involvement by the staff member, anything from an email, phone call or letter to a personalised face-to-face meeting and handover may be suitable.
As business will need to continue after an employee leaves, it is important to proactively manage any necessary handover.
Identify the key responsibilities of the role and who will be assuming them; this may be in terms of daily duties, clients, projects, or even management of teams.
Planning who will take over and how will help ensure a smooth transition. Depending on the role, different actions will be appropriate.
They might include:
- Job shadowing
- Meet and greets with clients
- Specific training on procedures
- Up-skilling (soft or hard) competencies.
If there will be an interim period before somebody else assumes the duties (for instance where the business needs to recruit a replacement), consider requesting the employee to compile handover notes.
Ideally this information should be documented on an ongoing basis, to avoid problems with employees who leave without notice or become uncooperative during the notice period.
HR practitioners can draw valuable information from a well-conducted exit interview.
Clearly, they will not be appropriate in all circumstances such as when there have been instances of serious misconduct.
However, where an employee has resigned they may be able to provide insight into the organisational culture and feedback on areas that require improvement.
Questions might include:
- What were the reasons for resignation – health issues, family responsibilities, personality conflicts, boredom with work, dissatisfaction with remuneration, inconvenient location or excessive travel time?
- What did the employee like best about working for the company? Equally, what did they like least? Does the employee have any suggestion for improving the company in relation to work or employee management?
- Is there anything the company could have done to prevent the resignation?
- Would the employee consider re-employment and returning to the company in the future?