A bit of this & a bit of that

If you follow me on Insta or Facebook you may have seen this ⬇️ photo about how I spent my 1st business birthday getting papped by the lovely Rachel of Madison Studio Photography.

Oh hey! Thats me 😂

Rachel is one of the amazing local small businesses offering my clients a discount on services as part of our Employee Benefit Package 🙌 You can learn more about the Program here, here and here.

This week I wanted to make use of my post to cover off on a few HR related bits and pieces that small – medium businesses commonly have misconceptions about, or are common errors, but aren’t sufficient enough to warrant a stand alone post on the subject.

Terminating employees as a small business

As a small business you may have heard you are exempt from Fair Work action if you have less than 15 employees, a belief that has lead many an employer to just terminate the employment of people willy nilly without cause.

In actual fact Fair Work introduced a Small Business Code in 2009 to provide a framework in regards to the termination of employees. The Code provides a process that employers must demonstrate they have followed prior to termination. If the employee in question is eligible to lodge a claim through Fair Work, and the employer cannot demonstrate procedural fairness was shown through the following of the Code, then Fair Work will rule the dismissal as being unfair and the employer will be liable for compensation.

Requesting or forcing the resignation of an employee

The legal definition of Constructive Dismissal is conduct of the employer was so “harmful, adverse or unfriendly to” the contract of employment and the employment relationship that the employee could not be expected to put up with it. Some examples of Constructive Dismissal include;

  • an employer expressly suggesting that an employee resign (irrespective of whether the employee made the suggestion) so as to assist with preserving the employee’s future ability to obtain work;
  • an employer actively making it very difficult or impossible for an employee to fulfil their role;
  • an employer continuously failing to provide, to a serious degree, a safe and/or healthy working environment (this includes failing to act on bullying and / or harassment of an employee); or
  • an employer imposing unauthorised and detrimental variations to the employee’s contract, such as a pay-cut, demotion, change of working hours, relocation or unreasonably failing to prevent or punish a co-worker who may be harassing or discriminating against the employee.

The steps you take as an employer to terminate an employee must be well considered and consistent with your termination policy. No matter how well intentioned your actions may have been, there is rarely a low risk shortcut that can substitute the correct performance management or redundancy process. You can read more about Constructive Dismissal here.

Abandonment of employment

Lets say you have an employee that hasn’t turned up to work for the past couple of days and hasn’t called in sick, what do you do? At what point does their job no longer exist?

Abandonment of employment is defined as “circumstances where an employee is absent from the workplace without reasonable excuse, or has failed to communicate with the employer to provide an excuse for being absent.” Traditionally, modern awards have allowed an absence of more than 3 days as evidence a worker has abandoned their employment and an absence of 14 days without reasonable cause showing clearly that they have. Recently Fair Work removed the relevant clause from a number of awards, despite this procedural fairness is still required, therefore best practice for unauthorised absences should be;

After a 3 day period of unauthorised absence the employer should make an attempt to contact the employee firstly with a telephone call, and, if there is no response, to follow up with a written request sent by email or registered post requiring the employee to provide an explanation for their absence by a specified deadline.

It is very important that the employer is aware of what provisions govern that particular employee’s employment— whether that be a modern award, enterprise agreement or contract of employment — as that particular instrument may contain a specific clause stating how abandonment of employment must be handled. Also, an employer may have a workplace policy dealing with absences which should be considered.

Finally, once all avenues have been exhausted and there is no explanation for the absences provided, an employer should always issue a letter stating that the employee’s employment has been terminated without notice, effective immediately, on the basis of abandonment of employment.

What is NOT abandonment of employment

  • When an employee has provided a medical certificate for an absence (note the “temporary absence” provisions of the Fair Work Act).
  • When an employee has made a workers compensation claim and is unfit for work while being paid weekly payments under the claim.
  • When an employee has taken authorised leave.
  • Unnotified absence from work for up to 3 days.

Do you have a subject that you would like to know more about? Contact Me via email to let me know and I can write a blog or Facebook post about it.

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Simone Pickering | The People & Culture Office

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Constructive dismissal; what is it and have you been guilty of it?

Employee Working Contract| HR Consultant | The People & Culture Office

“It would be a good idea for you to leave before we have fire you” “Times are tough and everyone needs to take a pay cut of $20,000 per year” “Tamara keeps complaining that Karen is bullying her, I mean that’s just Karen, we all know that, Tamara should just leave if she can’t handle it” “We need to change your work days & hours, I know you’ve said before you can’t work these days because you can’t get childcare but we need to make the change regardless”

Constructive dismissal, or forced resignation, is when an employee has no choice but to resign because of the conduct of the employer. The employer may expressly ask the employee to resign, or the employer’s conduct may leave the employee feeling that he or she has no other choice but to leave their employment.

This conduct generally involves an employer engaging in a serious breach of the employment contract or indicating that it no longer wishes to perform its side of the employment contract. This can include taking actions to make unauthorised variations to the employment contract such as extreme pay-cuts, demoting the employee, dramatically changing their working hours or relocating the employee. It is irrelevant that the employer’s insistence on the employee’s resignation was based on good intentions, for example to save the employee from embarrassment, or, to make it easier for him or her to find future employment; or whether the employer intended or anticipated that the employee would quit their job.

It is not always evident that an employee has resigned involuntarily. It is therefore essential for you, as an employer, to review the events leading up to an employee’s resignation. For example, if an employee resigns in the ‘heat of the moment’, they may argue that they felt they had no other option but to resign. Where a resignation is given in the heat of the moment or under extreme pressure, special circumstances may arise. An employer may be required to allow a reasonable period of time to pass and / or the employer may have a duty to confirm the intention to resign if, during that time, they were advised that the resignation was not intended.

Whether a principal contributing factor in the termination of the employment relationship was an act, or failure to act, on the part of the employer always depends on the individual circumstances of the case. Some examples of constructive dismissal can include:

  • where an employee resigns because he or she is told to resign or he or she will be sacked;
  • where an employee is subjected to ongoing sexual harassment or discrimination;
  • where an employee is subjected to systematic humiliation, verbal abuse or put-downs and adequate proof of this treatment is available;
  • where there is a serious and ongoing failure to provide a safe and healthy workplace, the employee has notified the employer of the problem and there is no improvement;
  • where an employer actively campaigns to force an employee out of work by acting in such a way as to make it impossible for the employee to continue to do his or her job and adequate proof of this treatment is available; and
  • where an employee has been demoted and the demotion involves a significant reduction of the remuneration or duties of the employee.

A clear example of constructive dismissal is found in the case of Hobbes v Achilleus Taxation Pty Ltd ATF (the Achilleus Taxation Trust). Here, an employee resigned after he was paid under half of what he was owed over a period of 4 months. It was decided that it was clearly a situation of forced resignation due to the conduct of the employer, and therefore instead amounted to a dismissal by the employer.

A situation where constructive dismissal was found not to exist was in the case of Bruce v Fingal Glen Pty Ltd (in liq). This concerned an employee who resigned after the employer repeatedly paid wages late, and failed to make any superannuation contributions. The payment of wages were usually 1 to 2 days late, but on occasion were paid even later. The Commission found that while the employer’s conduct was improper, the employee was not in a situation where they were left with no other option that to resign. Therefore, the employee could not argue constructive dismissal.

A leading Australian case on constructive dismissal is that of Mohazab v Dick Smith Electronics. Mohazab was an employee of Dick Smith Electronics. During questioning about the disappearance of stock in the store the employee was told that he was to either resign or face a police investigation. A letter of resignation was prepared by the employer and given to Mohazab to sign. After this occurred, Mohazab brought an unlawful termination claim, and Dick Smith argued that Mohazab had voluntarily resigned because of his concerns regarding the police. The court decided that the decision to resign or face police investigation amounted to termination at the initiative of the employer. This was because Mohazab had no effective or real choice but to resign, and it was only because of his employer’s action that termination had occurred.

In a case published by the Australian Government’s Comcare agency, an employee developed a psychiatric condition following persistent bullying as a result of her being promoted to a management position in a restructuring move by her employer. The worker did not receive any management training prior to her appointment as team leader, and there was widespread bitterness in the team about the removal of the previous team leader. Several team members reportedly engaged in increasingly hostile behaviour towards the new team leader, including spreading rumours, disobeying requests, making offensive comments, being rude, and failing to help to the team leader when she was very busy and clearly required assistance. The team members then convened a meeting (too which the bullied employee was not invited), where a document listing complaints about the new team leader was drafted and given to the team leader’s manager. The manager accepted the document, and refused to intervene in any meaningful way when requested to do so by the bullied employee. The bullied employee sought assistance from other managers, who did not intervene, until finally she was forced to leave her position due to the development of a psychiatric condition. The bullied employee took legal action, where a judge found that the employer was negligent in its duties to create a safe working environment. It was found that the managers involved had the capacity to take action that would have prevented the damage caused to the bullied employee, but failed to do so.

The bullied worker received compensation of $339,722 at the expense of her employer as a result of psychological injury acquired in the workplace. This case demonstrates the clear need for employers to be responsive to bullying complaints so that these sorts of cases do not occur. Bullying is an issue that gets worse the longer it is left unaddressed.

All constructive dismissal cases make it clear that employers need to carefully consider their actions and their legal obligations when they decide they wish to be rid of an employee. There is rarely a low-risk shortcut that can substitute proper redundancy discussions or performance management.

BASED IN KALGOORLIE, THE PEOPLE & CULTURE OFFICE IS AN INDEPENDENT HR CONSULTANT WHO CAN PARTNER WITH YOU TO OFFER A ONE STOP HR SOLUTION, WE ONLY CHARGE YOU FOR THE WORK WE PERFORM; NO CONTRACTS, NO ANNUAL OR MONTHLY FEES, JUST QUALITY SERVICE. CLICK HERE TO LEARN MORE

 

 

Employment Contracts – what to put in and what to leave out

Employee Working Contract| HR Consultant | The People & Culture Office

The importance of having effective, well-drafted, and compliant employment contracts in place cannot be understated. If you don’t scrutinise your contracts to make sure they’re legally correct, or if you have not given much thought to this important business document, you may be very disappointed about the degree to which you can protect your commercial interests or defend your position in the case of a workplace dispute.

An employment contract is an agreement between an employer and an employee that sets out the rights and obligations of each party.  As with any contract, the law requires certain conditions to be met before it will recognise an employment contract.  Employment relationships can take on several different forms and each form will create certain rights and obligations on the parties involved. The terms of employment contracts will also vary depending on the nature of the relationship between the parties and what rights and responsibilities are sought to be created.

Let’s start off with things that shouldn’t be included in an employment contract – basically anything policy related, and, anything you may want to the flexibility to alter in the future as your operational needs change. For example the inclusion of access to a motor vehicle in the employment contract makes it a contractual inclusion to which both parties are now bound too. If the job role no longer requires access to the vehicle, or if vehicle usage & allocation needs to be reviewed for financial reasons, negotiation with the employee is required and there would be very few employees who would be happy to give a contractual benefit up without being compensated in some other way. Similarly, commitment to training or recognition & reward programmes, these are best left to policies where the contents can be modified, or made obsolete as operational needs and budgetary requirements dictate.

The inclusion of policies is risky. Incorporating policies within a contract should be avoided as it may give rise to mutually enforceable duties and potentially create a breach if the employer fails to abide by its own policies. Instead, policies should be separate and acknowledged under the employment contract as a clause containing reference to the organisational policies and the employees’ obligations.

Let’s look at a hypothetical employment contract where the employer has stated the content of their Drug & Alcohol Policy within the terms and conditions of the employment contract. The policy states that it is a 3 strikes and you’re out policy, but, the employer has just obtained a major contract which a large percent of existing employees will be mobilised to. The client has a zero tolerance policy and the employer now faces a disconnect with their contractual obligations to it’s employees, and their constraints of having sufficient ongoing work for their employees should they test positive whilst on their main clients site. Well written policies will always contain a clause that if at anytime the legislative, policy or business operational requirements is so altered that the policy is no longer appropriate in its current form, the policy shall be reviewed immediately and amended accordingly, on the other hand renegotiating contracts with employees, particularly to conditions that the employee considers unfavourable, is messy and unpleasant.

So what should an employment contract contain?;

  • The position they are being appointed to, it goes without saying that this should be consistent with the position they applied for, unless consultation and discussion has taken place.
  • Employment status ie: Full Time, Part Time, Fixed Term or Casual. If the position is being offered on a fixed term basis for the duration of a prescribed project or coverage on a long term absence such as Parental Leave, the factor to determine the termination of the term must be explicit ie: when the project ceases or by XX date. ** Failure to monitor cessation terms on Fixed Term Contracts can result in a permanent and ongoing employment relationship with said employee, for this reason you should always ensure you have stringent processes in place.
  • The position they will report to (not the person currently holding that position).
  • Remuneration expressed either as a salary or hourly rate.
  • Hours of duty
  • Date of commencement
  • Location of workplace
  • Is the offer of employment is subject to any conditions? ie: Police Clearance
  • The industrial instrument they are being paid under ie: the applicable Award or Collective Agreement

The Terms and Conditions of Employment should contain information that relates to the probationary period, notice periods to terminate employment, how and the frequency of pays, superannuation, leave entitlements, the requirement to comply with the organisations policies & procedures, confidentiality, restraint of trade, other employment  a dispute resolution process – PHEW!

So the key take away’s are; 

  • An employment contract is a legally binding document, that when put together with little legal or strategic consideration can have significant detrimental impact to business.
  • By understanding the reasons for certain clauses in employment contracts, employers can help ensure that their employment contracts accurately reflect the terms and conditions of the employment relationship and sufficiently protect their interests.
  • Employment contracts should be reviewed and amended whenever there are material changes to an employee’s role, particularly when an employee is moved into a new position.
  • If in doubt as to the effectiveness of a clause, or how a particular clause works, an employer should obtain proper advice, and should certainly do so before making amendments.

    BASED IN KALGOORLIE, THE PEOPLE & CULTURE OFFICE IS AN INDEPENDENT HR CONSULTANT WHO CAN PARTNER WITH YOU TO OFFER A ONE STOP HR SOLUTION, WE ONLY CHARGE YOU FOR THE WORK WE PERFORM; NO CONTRACTS, NO ANNUAL OR MONTHLY FEES, JUST QUALITY SERVICE. CLICK HERE TO LEARN MORE