Why Employee Consultation is so Important!

Consulting with your employees on all workplace related matters does not only constitute best management practice, it’s also the Law. Being an employer by default mandates that you will be functioning in a business environment that is subject to constant change. Change is a reality of business life. Accordingly, to ensure ‘fairness’ and to ensure that this ‘change’ is managed in the most effective manner, Fair Work Australia has put in place a series of consultation requirements that all employers must adhere to. If you do not consult with your employees you may find yourself on the wrong end of the law.

Whether the change under consideration relates to performance issues, behavioural matters, a redundancy or dismissal; the employer must consult with the employee in a manner that is considered by a 'reasonable person' to be fair.  This is true irrespective of the technical terms under which the employment is facilitated, e.g. Modern award or employment contract etc.

As an example, a documented Fair Work Australia case made it clear just how important it is to ensure employers comply with consultation clauses in Modern Awards when implementing redundancies.  In Wang and Others v Specialty Fashion Group Ltd (2011), five employees were made redundant and informed of this by their employer in June 2011. While the employer contended that the redundancies were genuine, the employees disagreed and lodged an unfair dismissal claim with Fair Work Australia (FWA). 

The employees were covered by the Textile, Clothing, Footwear and Associated Industries Award, which mandated consultation. The clause required the employer to:
  • give employees advance notice of any significant workplace change (including redundancies); and
  • allow employees an opportunity to discuss how any adverse impact on them could  be avoided.
In its investigation, FWA found that the only time the employees were consulted throughout the redundancy process was when they were told by their employer that the decision had already been made.  Therefore, as the employer had not complied with the consultation clause in the Award, by failing to give the employees a chance to raise any issues they had with the decision, FWA found that the redundancies were not genuine.  This was regardless of the commercial reasons behind the redundancies. If the employer had made the effort to consult with their employees prior to the announcement of redundancy, than the outcome of the case would have been very different.
Another recent example is that of a dismissal made as a result of an employee telling his manager to “get f..ked”. When Adam Haliman's boss asked him to work on the weekend, feeding tuna in the fishery where he had been employed for six years, he said no. More to the point, he told his manager to "get f---ed". "I'm not working on the f---ing weekend," he added. A few days later he was not working at all, having been fired from his $20-an-hour job in Port Lincoln, South Australia, for swearing at his boss.
When the matter was brought before Fair Work Australia, the tribunal found in favour of the fish feeder. The primary reason for this was that the employer had not made a genuine effort to investigate or consult with the employee to determine the background to the incident. Swearing at your employer is not necessarily a sackable offence with the workplace relations tribunal finding the summary dismissal of Mr Haliman by Marnikol Fisheries was harsh and unjust (unfair). While the language he used was concerning, the tribunal said it was telling that he swore at his manager for "added emphasis" rather than as a form of abuse. Also relevant were his years of good service and his need to be home with his pregnant partner, who was due to give birth.
A documented consultation policy would have ensured that, if a summary dismissal was warranted, it was based on the right criteria. An emotional response to a heated scenario won’t hold water in front of the workplace tribunal.
So the bottom line is have a workplace consultation policy and related procedure so you know how to “Consult with your employees”. This doesn’t necessarily need to be a highly formalised process but what is mandated is that the process is “fair”, not only to the employee but also to the employer.
To ensure you comply with the consultation requirement when implementing change such as redundancies, or addressing a behaviour or performance issue you may want to consider the following:
  1. Provide your employees with a letter that a) clearly sets out all the issues , b) explains exactly the affect of these ‘issues’, and c) asks for their input on issues and feedback.
  2. Hold a meeting with the employee/s concerned to obtain their response to the letter.
  3. Hold a second meeting with each employee at least 24 hours later, in which you  explain your decision regarding their employment (based on the initial consultation) and confirm that decision (and the reasons for it) in writing.
The moral of the story is that it is not only important to consult with your employees, but also to be ‘seen’ to be consultative.