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When
an employment relationship goes bad, an ex employee may well try to explore any
legal avenues of action against their former employer to obtain redress for the
injustice they have suffered, whether it be real or perceived. This may
take the form of a claim for back pay or entitlements, an audit by the
Workplace Ombudsman, a claim of unfair or unlawful dismissal or discrimination
or cutting edge claims for breach of the Trade Practices Act or emerging
implied common law terms of the employment relationship. As an employer,
your business can be put to considerable expense and inconvenience in resolving
these matters, which invariably leave a bad taste in the mouth of all
concerned.
Given
this background, it is worthwhile to recap some basic ground rules for avoiding
such claims:
1. Always, always
have a written contract of employment
This
may be a simple letter of appointment or a very detailed document. Whilst
the general rule is that the greater the detail, the greater the protection, you
should at least have a basic agreement in place for every employee setting out
their role, hours of work and pay rates.
2. Ensure there is a
clear, accurate position description
It
goes without saying that employees should have a clear description of their
position when they start work. Whilst the expectations of a role will not
always be met, setting out these expectations in advance can go a long way to
minimising job dissatisfaction and subsequent poor performance. Position
descriptions should be reviewed on a periodic basis and updated to make sure
they are keeping pace with changes in the organisation.
3. Ensure that new
employees acknowledge policies in writing
Many
operational issues can be addressed in the policies of a business. It is
not generally necessary or desirable to include this material in the employment
contract itself. But in order to rely on the contents of a policy (eg,
regarding internet usage), an employer must show that the employee was aware of
and understood the policy. So, employees should receive an induction
session in relation to policies when they commence, work, be provided with
access to an up to date copy of policies and required to sign a record of having
read and understood the policies. This will pay dividends when it comes
time for the employer to rely upon the policy.
4. Ensure that
correct entitlements are paid
Employers
should ensure that they are familiar with applicable statutory and award requirements
before an employee commences work. This includes checking off legislative
entitlements (eg personal leave and compassionate leave), knowing whether there
is an industrial award or registered collective agreement covering the employee
and what its requirements are (eg lunch breaks and overtime). Employers
should also be careful to ensure that their systems meet these
requirements. Often, employees are inadvertently not paid their proper
entitlements and this paves the way for a disgruntled former employee to
complain to the Workplace Ombudsman or state Workplace Rights Ombudsman about
alleged underpayment.
5. Be aware of the
probation period
Many
employers forget that employment can be terminated within the probationary
period (normally three months) without the provision of reasons. Indeed,
it is generally not advisable to give reasons for termination during a
probationary period. However, it is necessary to ensure that there is no
unlawful component to the termination (ie reliance upon a discriminatory reason
to terminate). This is because the
statutory restrictions on unfair dismissal claims do not generally apply to
unlawful dismissal claims. Whether an employee is going to be retained
should be reviewed well before the end of the probationary period.
6. Ensure
that there is a regular performance review process
Breakdown
in communication is often a reason for breakdowns in employment
relationships. Whilst a formal
performance appraisal process is desirable, it is practically advisable to
maintain a regular dialogue with employees about their performance (eg, about things
they are doing well, things they are not doing well and how they can be
improved). Many employers fail to
observe this basic discipline with predictable results.
7. Keep
records, notes of meetings etc
It
is wise to ensure that there is a paper trail on the employee’s personnel file
about their performance and steps which have been taken to address issues. All meetings should be carefully minuted in
case there is a need for future reference, particularly where there has been a
change of responsible staff. Formal
letters should be written to the employee where appropriate. These records provide important corroborative
evidence in the case of a later dispute about what was said or agreed.
8. Give the
employee a chance to respond to allegations
If
there are performance concerns about an employee or allegations about their
conduct, details of the allegations and any supporting evidence should be put
to the employee and a chance provided for them to respond. Any response should be taken into account
before a final decision is made about termination. The industrial commissions hold strong views
about procedural fairness and many an otherwise justified dismissal has been
criticised for the failure to provide employees with an opportunity to respond.
9. Don’t
delay
There
is often not much to be gained by putting off the inevitable and it will often
get harder to justify terminating an employee in legal terms the longer a
problem goes on for. You should be
honest with yourself in assessing whether there is a problem and addressing it
in a timely way.
10. If in
doubt, get advice
Lastly,
a false economy is no economy at all. It
may cost you some money in the short term but getting advice may well help to
clarify and shorten processes and save you money in the long term.
Observing
these tips will not rule out all post employment legal claims but will minimise
their occurrence.
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