There is now no doubt that many organisations are legally exposed by not properly defining policies and procedures against which employees can be managed. It is a requirement under law and just good practice that policies and related procedures are in place and available for all staff to review and reference as required.

Should you find yourself in the unfortunate position of having to defend yourself against an alleged discrimination or unfair dismissal claim, you will find that the Staff Handbook and its proper application is indispensible in helping you defend yourself and limit your liability.

The P&Ps are typically contained in the Staff Handbook specifying the organisation’s policies regarding a range of employee related matters such as terminations, grievance resolution, discipline mechanisms, absenteeism, leave, OH&S, WorkCover etc. A lack of clarity in these areas can be a legal minefield for all organisations; large or small.

Typically, the executive in small to medium firms are far too busy to bother themselves with the mundane aspects of the ‘Staff Handbook’ and in so doing are unwittingly leaving themselves exposed.

We can't recommend strongly enough that you ensure your policies and procedures handbook is up to date and made available to all employees.


What not to put in Employment Contracts

It is good practice not to provide specific reference to performance management processes or review/feedback schedules in your contracts as you will be bound to abide by them. If you fail to abide to the requirements, then you forfeit your right to terminate on performance grounds as the feedback may have facilitated an improvement in performance.

Deal with a problem immediately..don’t wait.

Deal with a performance related issue straight away..don't procrastinate and definately don't wait for next scheduled review. Some organisations have found that more regular but less formal performance appraisals, which are documented, are quicker and more effective.

Performance Management Training

Provide your management with performance Management training
Distribute your policies and procedures for dealing with performance issues to your management to ensure consistency in application. You should also provide training to your managers to ensure they have the skills to comply and apply the guidelines.

Establishing effective performance management systems can have significant benefits for a business, leading to happier, more motivated and better performing employees. Reviewing, refining and implementing performance management systems are ways of helping achieve these benefits.
A recent ruling by the FWA (Quattrocchi v Monsanto) highlights the importance of effective performance management processes. In this case, the employee was dismissed because of repeated work errors and the employee claimed unfair dismissal. Even though it was ruled that the reasons for termination were valid, that 3 separate warnings were issued and a 60 day performance management improvement plan was put in place, the commissioner ruled that, amongst other things, the performance improvement plan did not state clear goals and measurements nor did it provide support for the employee to improve.
In other words HR and management were going through the motions and just wanted him out. In the end the unfair dismissal claim was dismissed because the FWA ruled that the employee was disinterested in addressing the performance issues. If it hadn’t been for this, the FWA would have ordered a reinstatement or compensation.
So having an effective performance management plan in place is critical to not only maintaining a motivated work environment but also to managing poor performers.
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There are a number of base line issues every employer should be aware of. These include knowing what workplace legislation covers your company, the different types of employment and how they are affected by the workplace legislation, and lastly what workplace practices to avoid at all costs.
1. What workplace legislation am I covered by? We’ve discussed this extensively in previous newsletters with the bottom line being that where the employment entity is a limited (LTD) or proprietary limited (Pty Ltd) company, the entity will be classified as a national employer with the workplace covered by the new federal Fair Work legislation that came into effect on the 1st July 2009. If in doubt check Jurisdiction
2. Different types of employment: What are your workplace responsibilities to full-time, part-time, casual employees and independent contractors? Full-time and part-time employees are entitled to exactly the same benefits as defined by the National Employment Standard, with the latter’s entitlements being a prorate entitlements of full-time equivalent. Casual employees on the other hand are typically employed on an hourly or daily basis and are paid a ‘casual loading’ which makes up for the fact that they are not entitled to sick or annual leave. They also do not have access to the unfair dismissal laws. An Independent Contractor works under contract for a specific job or length of time. They do not work regularly for the employer and can choose whether or not to do the job. Accordingly they are not covered by employment law.
3. Work Practices to avoid. A Sham Contract is where the employer disguises an employment relationship as an independent contracting arrangement. They may do this to avoid being subject to the employment legislation and related entitlements such as annual leave and sick leave etc, avoid tax responsibilities or reduce apparent employee count. Whatever the reason, this serious offence and is called ‘sham contracting’. Unpaid work trials are generally against the law. You should not ask people to work for free. Unpaid work trials are generally against the law. Contraventions incur a penalty of up to $33,000 (2009) per incident.
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One of the major changes that came into effect with the introduction of the Fair Work Act on the 1st July 2009 was the introduction of new unfair dismissal laws. These have been specifically designed to protect the rights of the employee. The impact of these changes is that approximately 100,000 businesses or nearly 3 million employees, who were previously exempt, will now fall under the unfair dismissal sections of the legislation.
What is an unfair dismissal?
An unfair dismissal is one where the person has been dismissed and the dismissal was “harsh, unjust or unreasonable”.
The emphasis is therefore on the employer to ensure that processes and procedures are in place, which when followed, ensure that in retrospect the dismissal cannot be determined to be unfair or, to put it another way, the dismissal could not in hindsight be determined to be harsh, unjust or unreasonable.
Does it affect me, as I’m a small business?
There is a common misconception that a company with less than 15 employees is exempt from the legislation. This is not the case. The legislation provides the small business protection by insisting that an employee must have worked with a business for at least 12 months before they are eligible to make a claim under the act. For all other businesses with more than 15 employees the qualifying period is 6 months. All businesses are therefore subject to the risk of unfair dismissal claims.
Employment Contracts, job descriptions and, Policies and Procedures?
To ensure that in retrospect a dismissal cannot be determined to be “harsh, unjust or unreasonable”, it is imperative that the employer attends to the necessary detail inherent in the employer/employee relationship. This detail includes specifying the employee’s terms of employment via the employment contract and also ensuring that over the years it is regularly updated in accordance with the changing terms of employment. The employee’s primary job responsibilities should also be clearly defined in the Job description. Organisational policies and procedures should be put in place which outlines how poor performance, grievance, misconduct and termination matters are to be handled. Should you find yourself having to defend an unfair dismissal claim, these documents will form the cornerstone of your defence. If they are not in place, your defence will be seriously weakened so be prepared to pay the price.
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