10Jan

How Many Warnings Before Termination?

How Many Warnings Before Termination?
FACT or FICTION!

Understanding the role of warnings in employee dismissal—how many are necessary, and what does the law actually say?


How Many Warnings Are Necessary Before Termination?

When it comes to employee termination, a common misconception is that a strict “three strikes” rule applies. But is this fact or fiction? Let’s clarify what the Fair Work Act actually requires.

The Legal Perspective

The Fair Work Act does not mandate a specific number of warnings before dismissing an employee. However, warnings can play a crucial role if the employee is protected from unfair dismissal. The Fair Work Commission considers whether the employee was warned about their unsatisfactory performance before dismissal, but there is no set rule on how many warnings are required. Generally, two to three warnings are considered reasonable, depending on the severity of the issue.

Performance vs. Misconduct

The approach to warnings depends on the nature of the issue:

  • Performance Issues: Employers should consider the seriousness of the issue, the clarity of expectations, and whether the employee was given an opportunity to improve.

  • Misconduct: In cases of serious misconduct (e.g., theft, violence, fraud), immediate termination may be justified without any prior warnings. For less severe misconduct, issuing warnings may be appropriate before dismissal.

Common Misconceptions

  • The “Three Strikes” Rule: There is no legal requirement for three warnings. Instead, each case is assessed individually based on the circumstances.

  • Immediate Dismissal: While serious misconduct may justify instant dismissal, employers should ensure their decision aligns with procedural fairness.

Exceptions: When Warnings Are Not Required

There are certain situations where warnings are not necessary before termination:

  • The employee is within their first six months of employment (or 12 months for small businesses).

  • The employee earns over $175,000 annually and is not covered by an award.

  • The business follows the Small Business Fair Dismissal Code, which requires only one written warning in cases of non-serious misconduct.

Enterprise Agreements & Workplace Policies

If an employer has specific policies or enterprise agreements that require a set number of warnings, they must adhere to them. However, businesses should review and simplify policies where possible to avoid unnecessary procedural complications.

Final Thoughts

While warnings can be important in avoiding unfair dismissal claims, there is no strict legal requirement dictating the number. Employers should assess each situation carefully, ensuring fairness and compliance with workplace laws. If in doubt, seeking professional HR advice is always a wise step.

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