skip to main content

Employment Relations: Employment agreement builder

Section 13: Termination

Though it may not be pleasant to think about, it’s a good idea to have a termination clause in an agreement for the protection of both employer and employee. If you include a termination clause it cannot replace or override the requirement of the Employment Relations Act to deal with continuity of employment in restructuring situations that arise due to the transfer of work undertaken by the employee to a new business. Clauses to meet this compulsory requirement are included in Section 12.



Note: If you chose to include the probation clause back in section three (Nature of the Agreement), you must also include a General Termination clause.

General Termination
 
The Employer may terminate this agreement for cause, by providing notice in writing to the Employee. Likewise the Employee is required to give notice of resignation. The Employer may, at its discretion, pay remuneration in lieu of some or all of this notice period.


Termination for Serious Misconduct
 
Notwithstanding any other provision in this agreement, the Employer may terminate this agreement summarily and without notice for serious misconduct on the part of the Employee. Serious misconduct includes, but is not limited to:

(i)     theft;
(ii)    dishonesty;
(iii)   harassment of a work colleague or customer;
(iv)   serious or repeated failure to follow a reasonable instruction;
(v)    deliberate destruction of any property belonging to the Employer;
(vi)   actions which seriously damage the employer’s reputation.


Suspension
 
In the event the Employer wishes to investigate any alleged misconduct, it may, after discussing the proposal of suspension with the Employee, and considering the employee’s views, suspend the Employee on pay whilst the investigation is carried out.


Termination on Medical Grounds
 
In the event the Employee has been absent from work for which should represent an extended break from employment because of illness, the Employer shall be entitled to require the Employee to undergo a medical examination by a registered medical practitioner nominated by the Employer, at the employer’s cost. In assessing the employee’s fitness for work, the Employer shall take into account any report provided as a result of that examination, and any other medical report provided by the Employee within a reasonable time-frame. If, in the reasonable opinion of the Employer, the Employee is incapable of the proper performance of their duties by reason of illness, the Employer may terminate this agreement by the provision of at least notice.


Abandonment of Employment
 
In the event the Employee has been absent from work for three consecutive working days without any notification to the Employer, and the Employer has made reasonable efforts to contact the Employee, this agreement shall automatically terminate on the expiry of the third day without the need for notice of termination of employment.


Obligations of Employee on Termination
 
Upon the termination of this agreement for whatever reason, or at any other time if so requested by the Employer, the Employee shall immediately return to the Employer all information, material or property (including but not limited to computer disks, printouts, manuals, reports, letters, memos, plans, diagrams, security cards, keys, and laptop computers) either belonging to or the responsibility of the Employer and all copies of that material, which are in the employee’s possession or under their control.
About OER | Department of Labour, May 2006. © The Crown