Common Termination Mistakes Employers Make (And How To Avoid Them)

Whether we like it or not, everyone knows that terminations are part of every business. Plenty of business owners dread terminations—they come with a significant amount of fear and risk associated with the act. Termination itself comes with plenty of negative emotions, on both the employer’s side and the employees.

Aside from processes not being followed, terminations become risky when decisions are rushed and emotions cloud clarity.

That said, terminating a staff member shouldn’t create fear for a business owner. However, it becomes tricky and dangerous when termination happens without due process, procedural fairness isn’t followed, and it doesn’t follow the guidelines set by the Fair Work Act.

So when does termination risk really begin? To answer that, let’s break down the common traps businesses fall into when they terminate an employee.

Termination Trap #1: Confusing conduct with behaviour

In the world of HR and employment law, there is a clearly defined difference between conduct and behaviour.

Differentiating between the two is critical, especially when it comes to the termination process.

Conduct

Conduct is:

• What an employee does 
• A specific action or incident
• Generally involves a breach of misconduct or serious misconduct and can cover:
  • Workplace policies or procedures
  • Lawful and reasonable directions
  • Expected standards of conduct
• Often addressed through a disciplinary process

Behaviour

Behaviour, on the other hand, is defined as:

• How an employee acts at work
• Usually a pattern over time, not a single incident
• Tends to impact:
  • Team relationships
  • Workplace culture
  • How work gets done
• Often not a clear policy breach on its own
• Typically managed through a softer performance management process initially rather than jumping into a formal disciplinary process

To recap, conduct is what someone did, while behaviour is how they consistently act. Depending on the situation, a tailored management process is needed to address matters.

Mixing conduct and behaviour up can be risky. Terminating for ‘poor attitude’ isn’t a legal reason alone, and termination shouldn’t be the first course of action when a team member displays a poor attitude in the workplace.

If there’s no improvement after reasonable opportunity for improvement is granted, and you can show you’ve provided the employee with ample chances and have followed the correct process, that is when termination may be an option. However, it certainly shouldn’t be the first one when it comes to poor attitude on its own.

Termination Trap #2: Ignoring underperformance

Another common termination risk is when employers ignore underperformance.

Overlooking re-occurring underperformance is one of the worst things an employer can do.  While we know how uncomfortable and challenging underperformance or performance improvement conversations can get, there’s no escaping the fact that addressing matters in a timely manner is a key component in managing a situation smoothly.

Ignoring underperformance and hoping it will go away, rather than addressing issues at the onset, can create future situations that become more difficult to manage and riskier to defend.

What we commonly see:

• Long history of avoiding underperformance or performance improvement conversations
• No clear record of expectations or concerns
• No evidence of feedback, support, or warnings
• Employee shock when disciplinary is raised
• Claims that issues were never communicated or were not serious

Fair Work will assess whether:

• The employee knew there was a problem in the first place
• The employee was given a reasonable opportunity to improve
• The employee was offered support or training where appropriate

Inaction is rarely neutral. It’s often interpreted as acceptance—which is very risky if termination comes up later on.

Termination Trap #3: Relying on informal conversations instead of evidence

Many employers believe that because they’ve sat down with an employee and have had a conversation with them, they have managed the issue.

In termination matters, conversations that are not documented may carry little weight. If a discussion occurs, but no record of it happening exists (like a file note, a follow-up email recapping the meeting, or written expectations to bolster the outcome of the discussion), it may not stand up under scrutiny.

Common gaps in documentation include:

• No file notes of performance conversations
• No written warnings or follow-up emails about conversations
• No documented performance expectations
• No signed Position Descriptions confirming an employee understands their duties

When it comes to managing underperformance, documentation is key in providing clarity and fairness for employer and employee alike.

Remember: termination risk increases when there’s no evidence of a structured process.

Termination Trap #4: Not preparing for the termination meeting itself

Now that we’ve gone through the common risks in the termination process, let’s talk about the risks that the termination meeting itself holds.

The termination meeting is probably the most dangerous 30 minutes in management. This is where most legal exposure is created, not resolved, with months of work unravelling in 10 minutes.

Risk increases when:

• The decision isn’t finalised
• The reason for termination changes mid-meeting
• The employer becomes defensive, and;
• Procedural fairness is ignored

To reduce risk during the meeting, make sure to prepare for it and ask yourself the following before the termination meeting happens:

• Are you confident in your decision?
• Do you have a valid reason that can be proven to confirm that termination is the right path to take?
• Have all reasonable steps been taken to avoid termination?
• Was the process a fair one? In other words: has the employee been given every chance to improve, were they shown a fair process, and was there an opportunity for them to respond?

How do employers accidentally sabotage themselves in termination meetings?

These are the most common ways we’ve seen employers damage their case:

• Not following the correct process and not having written documentation to support the process.
• Raising items that haven’t been presented initially to the employee via the invitation letter.
• Using emotions rather than facts, hard figures, and process.
• Making assumptions without letting the employee speak freely or respond.
• Saying the wrong things and assuming responses.

The truth about terminations and the risk for businesses

Termination risk rarely begins at the termination meeting.

It begins much earlier: when conduct and behaviour are confused, when underperformance is ignored and not addressed, when conversations aren’t documented, and when process isn’t followed.

For employers, termination risks are often not due to bad intent. They’re caused by rushed decisions (that can also be emotionally charged), unclear expectations, and inconsistent processes.

Even if a business has a valid reason for termination, employment law still requires more than a reason itself. Fair Work has to see that processes were followed and employees were treated fairly.

Remember: termination should be the final step in a well-managed, documented process. It shouldn’t be a reaction to frustration or a one-off incident.

If you’re currently managing underperformance or considering termination, make sure to review your approach and your processes first before making the decision to terminate.

At Now Actually, we help businesses reduce termination risks for employers by ensuring processes are structured, fair, and compliant before issues escalate. Get expert, people-first, and compliant advice when you engage our team.

Book in a time to chat with us to see how we can help.