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Termination by Electronic Media – Pitfalls and Best Practice

The rise in the use of technology means the way we can communicate with each other in our personal and working lives has expanded, almost beyond belief. The ways in which termination of employment can occur have also expanded, but is it lawful to terminate an employee using electronic media?

Requirement for written notice

Under section 117(1) of the Fair Work Act 2009 (“the FWA”) employers are required to give written notice to employees of the date of termination (which cannot be before the date of the notice). Written notice can be:

  • in person;
  • sending it by pre-paid post to the employee’s last known place of residence;
  • by leaving it at the employee’s last known place of residence.

Section 9 of the Electronic Transactions Act 1999 (Cth) provides that written communications can be given electronically (which can include email and sms) if consent to receipt of electronic communications has previously been given by the intended recipient.

The circumstances are important

The Federal Magistrates Court has previously held that a text message was a form of “writing” and accordingly the notice requirements under the FWA had been met. However, the difficulty for employers in using electronic means for termination, is that this conduct may be scrutinised in assessing whether it was “harsh, unjust or unreasonable” in the context of an unfair dismissal claim.

There have been a number of cases where termination of employment was by electronic media. Most notably, in August 2015, Hutchinson Ports created headlines around Australia by sending redundancy notifications to 97 workers by sms (text) and email, shortly before midnight, effective immediately.

In one case, the Fair Work Commission found that a termination by text message was “unfair” as the employee was not given an opportunity to respond to conduct issues. However, in another case, the Fair Work Commission found that a termination by text message was not unfair, even though there was no face to face meeting beforehand, based on the severity of conduct of the employee.

More recently, on 16 May 2016, the Fair Work Commission found that a worker who had been terminated from a recycling company in Queensland by text message had been unfairly dismissed.

In that decision, the worker had been requested to work overtime but had not been paid for previous overtime and expressed his concerns to the CEO. He and the CEO then swore at each other with the worker calling the CEO a name. The name calling was used by the company to argue that the dismissal was not unfair, as such a comment would not be tolerated in any workplace in Australia. The Deputy President stated that the language and behaviour by the CEO was “neither reasonable nor appropriate for the CEO of a firm with 43-48 employees”.

The comments in the various cases suggest that the main consideration is one of procedural fairness and the outcome of the case depends on the individual circumstances of each case.

For that reason, employers should consider including a clause in employment contracts to the effect that communications can be made electronically, including specifying when such communication is deemed to have taken effect.

However, for best practice, to try and avoid unfair dismissal claims with possible orders for reinstatement of the employee, fines and other penalties, employers should ensure that terminations are done “face to face”.

If you or someone you know wants more information or needs help or advice, please contact us on 08 9422 8111 or email buslaw@taitlegal.com.au.