How to terminate employees and avoid unfair dismissal claims

How to terminate employees and avoid unfair dismissal claims

Real estate agencies operate in high pressure environments. Invariably, employers regularly find employees that do not fit or perform well in the real estate industry. Most employers are well versed in terminating employment during periods where new employees are within their probationary period or where there has been gross misconduct.

In our experience, real estate agencies fall short on compliance with the Real Estate Industry Award and employment legislation in relation to termination in the areas in between such as where there has been misconduct that is not overly serious, failure to follow lawful instruction or poor performance. It is in these circumstances where terminations regularly result in Fair Work applications for unfair dismissal being brought. The ultimate test being whether the dismissal was harsh, unjust or unreasonable.

Real estate agencies who employ less than 15 employees cannot have an unfair dismissal claim brought against them within the first 12 months of employment. Other agencies cannot have an unfair dismissal claim brought against them within the fix 6 months of employment. For businesses who employ less than 15 employees if they have complied with the Fair Dismissal Code after the 12-month period the dismissal will be deemed fair.

So, the question then becomes, how does an employer terminate an employee’s employment and minimise the risk of an unfair dismissal claim?

1.  Summary dismissal is only appropriate for serious misconduct including theft, fraud, violence or dangerous refusal to comply with occupational health and welfare procedures. Police reports made whilst not required support summary dismissal in these circumstances.

2.  Do not hide behind redundancy to avoid an unfair dismissal claim. If a redundancy is not genuine, then it is a termination. A redundancy where there was an opportunity for redeployment, there was not proper consultation and a replacement employee is needed is not genuine and offers no protection to an employer.

3.  So, what does an employer have to do when terminating an employee?

  • Discuss your concerns with the employee and offer that the employee have a support person present (not a lawyer). Document the meeting and who was in attendance. During this meeting note that if performance or conduct does not improve within a reasonable time that the employee may be dismissed.
  • Confirm meeting outcomes in writing and issue written warnings.
  • Put steps in place to provide additional support to the employee in question. This can be in the form of training or a period of additional assistance.
  • Have further meetings, as appropriate, to address performance and/or conduct targets in the same form as the initial meeting. Listen to the feedback provided by the employee. Document everything and always ensure that the employee is aware that termination will result where notwithstanding support and alterations to the support offered in line with the employee’s feedback is not yielding results. Confirm meeting outcomes in writing.
  • Issue additional written warnings where required.
  • If notwithstanding all the above, the employee is not meeting the standard of conduct or performance criteria then arrange a further meeting to hear the employee out. If there is not valid reason for the failure to comply then the employer will have little option but to terminate the employee. When confirming in writing ensure that all attempts to warn, support and train the employee and all meetings attempting the same are outlined.
  • Consistency is key. Do not terminate employee A for behaviour that was acceptable for employee B.
  • Pay out all due entitlements.

4.  Ideally, all Real Estate Agencies should have crystal clear employment agreements incorporating the relevant provisions of the Real Estate Industry Award, outlining expected performance and conduct for employees as well as addressing protective deterrent factors for when employment is terminated. Even better when addressing office behaviour and additional conduct requirements, put written policies in place that outline your expectations.

5.  Clarity in expectations, procedure and support coupled with consistency of treatment of employees are the ultimate protective mechanism.


At M A Legal we place significant emphasis on prevention rather than cure when it comes to employment obligations as ultimately the best defence is a strong offence.

We prepare employment agreements, warnings and letters of termination. Where you comply with your obligations, even if a claim is brought, we can save you significant time, resources and emotional energy by bringing the matter to an end efficiently. Where you follow the general guide outlined above, appreciating that this advice is general in nature and the best approach is always to obtain bespoke advice before taking action, you will at the very least strongly mitigate against the risk of unfair dismissal claims.

If you as an employer find yourself in a difficult position with a difficult employee who is hindering the business, then please contact our office for commercial, real and effective advice on your next steps.