Termination of Employment: Understanding Your Rights and Entitlements

We’ll be honest — getting fired absolutely sucks, even more so if you feel like you’ve been wrongfully dismissed. Unfortunately, wrongful termination is an issue that threatens the livelihoods of people all over the country, especially during the uncertain times of a global pandemic. If you have recently been dismissed from your job and feel like you have been a victim of wrongful termination, it is so important that you keep on reading this article. Today, we look at everything you need to know about termination of employment, from your rights to entitlements and so much more, so sit back, relax and carry on scrolling to find out more.


Employees VS Contractors

The first thing that you will need to understand if you feel like you have been wrongfully dismissed is the difference between an employee and a contractor. The reason we need to differentiate between whether you are a genuine employee or a contractor is that a contractor cannot make a claim for unfair dismissal with the Fair Work Ombudsman. 

An employee is someone who is hired by an institution under an agreed-upon employment contract. In this contract, an employer will determine the hours, work location, and how work should be done. Your employment contract should also include how much you will be paid, your employment status, and employment conditions such as leave and other entitlements.

A contractor, on the other hand, is someone who works for themselves and hires out their services at an agreed-upon rate. A contractor is responsible for paying their own tax, superannuation, and insurance out of the income that they earn.

Reasons For Termination

If you are an employee of a company or an organization, there are some genuine reasons for termination such as:

  1. Misconduct – Misconduct is conduct that is intentionally inconsistent with the continuation of an employment contract. Some examples of serious misconduct include theft, intoxication at work, assault, fraud, and the refusal to carry out lawful and reasonable instructions consistent with the employment contract.

  1. Poor Performance – Poor performance is when an employee fails to do their job properly and/or is unable to follow workplace rules, procedures and policies.

  1. Redundancy – Redundancy occurs when an employer decides that an employee’s skill sets are no longer relevant to the institution or when an employer becomes insolvent or bankrupt, and thus terminates employment.

  1. Capacity – If an employee is deemed to be incapable of fulfilling the requirements of their job, an employee can lawfully terminate their employment contract on the basis of incapacity.

Your Rights and Entitlements

If you are terminated, your employer is still required, by law, to ensure that you are entitled to your rights as stated in your employment contract. Some of these rights and entitlements include:

  1. Notice Of Termination – If your employer has decided to terminate you, they are required to produce a notice of termination which should be provided directly to you and in writing. You should be given reasonable notice as stipulated in your employment contract or prescribed by legislation or award.

  1. Summary Dismissal – A summary dismissal differs from notice of termination as it is an immediate notice of termination that is justifiable where the employee’s conduct is such that it can be interpreted as an abjuration of his or her obligations as an employee. In such a case, an employer is not required to give you prior notice of termination.

  1. Final Pay – Upon termination, an employer is legally required to ensure that the employee receives their outstanding wages. This includes penalty rates and other paid entitlements such as paid annual leave, and this is referred to as “final pay”. The best practice is for an employee to be paid within one week of termination or on the next scheduled payday. If you believe your employer has failed to pay all of your entitlements, the Fair Work Ombudsman can investigate the matter for you and take appropriate action.

Wrongful Termination

Wrongful termination/dismissal is when your employer has terminated your employment contract in an unjust or unreasonable way. If you believe this may be something that you are experiencing, you may be entitled to damages. However, in order to qualify for this, you will need to have been employed for a minimum of 6 months prior to your dismissal or 12 months if the business is classified as a small business. It is important to note that strict time limits apply and you will have to submit your application to the Fair Work Commission within 21 days of your official termination. 

For more information on your eligibility, you can refer to the Fair Work Commission’s website.

What Counts As Unlawful Termination?

Section 772 of the Act says that an employer must not terminate an employee for one or more of the following reasons:

  • Temporary absence from work due to injury or illness.

  • Non-membership of a trade union.

  • Trade union membership or participation.

  • The filing of a complaint against the employer involving an alleged violation of laws and regulations as recourse.

  • Discrimination based on sex, age, race, religion, political opinion, pregnancy, nationality, disability, sexual orientation, marital status, national extraction, social origin, or family/carer’s responsibilities.

  • Absence due to maternity or paternity leave.

  • Temporary absence due to engaging in voluntary emergency management activity, where an employee’s absence is reasonable having regard to all the circumstances.

If you feel like you have been unlawfully terminated, it is important that you submit your application for wrongful termination to the Fair Work Commission in a timely manner. You may also be required to provide any relevant evidence that can prove that your employer has dismissed you on unfair grounds. 

If you require assistance, your best bet is to contact your employment lawyer from NZ who will be able to give you all the knowledge and advice you will need to proceed with your claim. All the best!

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