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Four Valid Reasons for Employee Termination

A valid reason for termination should be classified into at least one of four categories: capacity, conduct, performance or termination on the grounds of redundancy.


Capacity relates to the employee’s ability to perform the inherent requirements of the job. To rely upon capacity as a reason for termination, the core or substantive duties of a position should be identified and compared against the employee’s ability to satisfy those requirements.

Evidence should exist in relation to the lack of capacity, particularly in cases of medical incapacity, and reasonable alternative position or duties considered prior to the decision to terminate.


Reasons related to conduct can range from serious contraventions of company policies or workplace health and safety obligations, inappropriate conduct, to serious misconduct.

There must be evidence that the conduct actually occurred. You should then assess whether termination is a fair option or whether a lesser form of disciplinary action, such as a formal written warning should be considered.


In cases of persistent poor performance of duties, the employee should be notified of the precise issues, given an opportunity to respond and generally provided with a reasonable period of time to improve. If disciplinary action or termination are likely outcomes of performance management, there should be prior warning that continued poor performance may result in such action.

Genuine Redundancy

Genuine redundancy may constitute a valid reason if it can be demonstrated that a position is no longer required to be performed by anybody because of changes in the operational requirements of your enterprise, consultation has occurred, and acceptable redeployment options have been considered and offered.

Pro Tip…

Fair Work Australia is hesitant to conclude that a termination is harsh or unfair, where a valid reason is established and procedural fairness ensured, particularly in the absence of significant mitigating factors.

Need Further Advice? Talk To Harrison Human Resources

With our HR Consulting service, we can provide practical advice and guidance on what constitutes a valid reason to dismiss an employee.

Simply click here to request an obligation-free 15 minute phone consult to get some initial advice on your HR needs.

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