Good reason is sometimes called substantive justification. For an employer’s action to be considered fair they must make sure that they meet the two aspects of ‘good reason’: These are that:
- they believe there is a valid reason to begin the action or process; and
- any decision that is made is for a good and fair reason.
An employer’s reasons for the action must be what a fair and reasonable employer could have done at the time of the dismissal or action. To ensure fairness in the circumstances, before making a decision the employer needs to ensure:
- that they have all of the facts that they can reasonably gather
- that they have heard the employee’s response to those facts
- that they have considered how they have acted in similar circumstances, and
- they have taken any other relevant considerations (such as length of service, any mitigating circumstances etc).
Every situation must be considered on its own facts and in context of the workplace.
For example, generally it might not be reasonable to dismiss an employee instantly for a one-off instance of what might be viewed as a trivial action; however this can be different depending on the situation. An example might be theft of social club funds. An employer that is a bank, and where the employee has access to money, is likely to consider this differently to a large building contractor employing a carpenter. The situation may be different again if this did not occur in the workplace, but went through the courts and was widely published. Every situation must be carefully considered on its own merits and following a fair process.
A “good reason” to support taking an action
The following reasons are some of the most common genuine work-related reasons that might support taking action against an employee:
- misconduct, or serious misconduct (ie some form of wrongdoing)
- where ongoing performance has not improved after a Performance Improvement Plan has been completed and they fail to meet the reasonable expectations of the job
- the employee’s job is disestablished for a genuine work-related reason
- the employee is unable to continue to do their job properly, eg for health reasons
- there is a fundamental breakdown in the employment relationship, which makes continuing employment unworkable.