WORKPLACE DISMISSAL: Are you prepared?
The recent downturn in the economy has created a spike in unfair dismissal claims which are costing business thousands of dollars. A genuine redundancy is an undeniable defence to an unfair dismissal claim. However, employees who are unaware of a business’s overall profitability or otherwise, or of other relevant changes in the business environment, could see their redundancy as contrived and consequently, unfair.
It is imperative that companies have the policies and procedures in place to deal with these issues and equally important for employers to be aware of the ways to implement fair dismissal in the first instance, preventing legal action. By following proper processes and observing your legal obligations as an employer around notice and reason should help minimise claims of unfair dismissal.
There are many fair reasons to terminate an employee’s contract, including:
- Poor performance
- Dangerous behaviour
- Refusing to follow instructions
- No further need for the position (retrenchment or redundancy).
Every employee should be given the chance to reach the standards you set and be given a fair hearing. Your HR policy should set fair and clear procedures for discipline and dismissal. Meridian Services can provide you with an exceptional HR manual template to set up your policy.
The often quoted ‘three-strikes policy’ is not a legal requirement, but employees should be given fair warnings to improve their performance and have access to help if required. (If the employee has committed gross or serious misconduct warnings or notice are unnecessary.) Performance reviews provide the ideal opportunity to offer feedback to your employees, outlining areas that may need work. If no improvement occurs, the next step would be to issue a warning letter to the employee, informing them that their performance needs to undergo serious improvement.
The required notice period will vary depending on length of employment. You may decide to pay ‘payment in lieu of notice’ (money equal to the wages for the notice period) if you would like the employee to stop working immediately or before the end of the notice period.
An employee can be instantly dismissed for gross or serious misconduct such as theft, fraud, assault, being intoxicated, or refusing to carry out a lawful and reasonable instruction, but first you should still give them a fair hearing about the circumstances surrounding the incident. Under some awards or agreements instant dismissal can affect their final payments, meaning that you may not have to pay their pro-rata long service leave, or notice.
Unfair dismissal occurs when there’s no valid reason for the dismissal, or you have not given the employee a warning or a fair chance to improve their performance.
Another form of unfair dismissal is if the employer makes a position redundant, retrenches the employee and, shortly after, hires a new employee to do the same duties.
An employee can claim unfair dismissal if the business employs:
- less than 15 staff (excluding irregular casuals), and the employee has worked there for 12 months or more OR
- 15 or more staff (excluding irregular casuals), and the employee has worked there for six months or more.
The number of employees is based on a simple headcount (excluding irregular casuals), not per full-time equivalent.
An often overlooked aspect of current legislation is the compulsory obligation of employers to consider whether an otherwise redundant employee could be redeployed within a business. The obligation is company-wide, not just in the area that the employee is presently working. This can be a positive step to avoid issues arising from disgruntled employees.
Some practical advice for employers to address unfair dismissal claims:
- Seek consultation with employee groups once redundancy becomes likely
- Check industrial agreements for industry specific obligations
- If possible, avoid redundancies by offering alternative employment within the business
- If selecting one employee over another (as opposed to redundancy of a whole group or division) consider the strengths and weaknesses of each impartially
- Ensure correct notice and redundancy pay are offered.
Also, the time limit for lodging an unfair dismissal claim has been extended from 14 to 21 days from the date the dismissal takes effect, and the time limit for lodging a general protections claim based on dismissal has been reduced from 60 to 21 days.
Meridian Services offer a complete range of policies and procedures regarding Unfair Dismissal and our experienced and professional staff would be happy to guide you through each step.
Contact us today.