What are are the top 3 employment law issues that cost your business money if not dealt with correctly?
Clear employment terms
It is critical for your business to ensure that each employee is engaged on clear employment terms.
Business owners often approach us to advise on issues arising from an employment contract. These issues generally stem from the use of an inappropriate starting document – usually a generic template, that:
- no longer reflects the employment relationship between employer and worker that may have changed over time;
- is unsigned or otherwise incomplete; or
- does not comply with workplace legislation.
In some cases, there is no written employment contract at all.
An employment contract governs the relationship between the employer and the employee, and we cannot stress enough how important this document is. It is your responsibility to ensure that the contracts under which your workers are employed comply with workplace laws and contain:
- an accurate description of the employee’s role (as updated from time to time);
- protections for your confidential information and intellectual property;
- if necessary, post-employment restraints;
- probationary periods; and
- the terms on which the employment relationship can be terminated.
It is also important to clearly define the basis you are employing someone on – are they a permanent or casual employee? In the last few years there have been many instances where employers have misclassified the nature of a worker’s employment which has resulted in the worker being entitled to large lump sum payouts.
We encourage you to seek advice about how to manage the employment of casual employees, so you are not caught out.
Finally, policies and procedures are highly recommended in a workplace. Whether or not they should form part of an employment contract depends on your workplace and industry. However, they should always be up to date and all employees (and sometimes non-employees) should be aware of them.
Modern Awards
There are currently 122 Modern Awards. Yes, that many! Modern Awards set out the minimum terms and conditions of work for employees within a particular occupational group or industry.
Sometimes employers believe they don’t have to abide by an Award because they pay above minimum wage. This is not true. Employers can choose to pay above the Award, but it does not mean their obligations under the Award change. If, you don’t comply with the relevant Award, you could find yourself on the receiving end of a variety of poor outcomes, including:
- An infringement notice;
- An underpayment claim;
- Penalties imposed by the Fair Work Ombudsman; and/or
- Litigation.
Working out which Award applies to your employees can be difficult, but you can find a helpful ‘tips and tricks’ checklist here. Once you have done that, you should review your employment agreements and workplace practices to ensure compliance.
Awards can be really difficult to get your head around so seek legal advice if you aren’t sure.
Managing exits
Off-boarding employees, particularly when a dismissal is involved, is the third area where employers often get it wrong. More often than not, employers don’t have clear protocols around an exiting employee, or if they do, they fail to properly implement them. If an employee’s exit is not managed properly, employers are exposed to a variety of claims including unfair dismissal and general protection claims.
How do you make sure that the employee’s exit does not leave you open to a claim? Consider:
- Has there been a breach of the employment agreement?
- Is it a resignation or has the employee’s role become so untenable through some action of the employer, that it is a ‘constructive dismissal’?
- Has the employee been made redundant or is there room for the employee to claim the redundancy was ‘not a genuine’ redundancy?
- Has the employee been summarily dismissed because of serious misconduct or was there some other reason?
- Was the way in which the employee’s employment terminated harsh, unjust or unreasonable?
- Was the employee’s employment terminated ‘unlawfully’? For example, because they filed a complaint, or participated in proceedings, against an employer involving alleged violation of laws or regulations.
Sometimes you may need to conduct a workplace investigation, allow the employee to involve a support person or look for opportunities to redeploy an employee. These and other procedures may have to be considered and followed to ensure the employee’s exit is done properly.
Importantly, learn from previous mistakes.
Now what?
It’s not only our job to help you deal with employment issues, but also to help you avoid them. If you need help putting in place employment contracts, help understanding what Award applies to your business or advice about how to manage a staff member’s exit, get in touch with us today. We provide prompt advice specifically tailored to you. Let us help you to create a low risk and high performing workplace.
Contact JFM Law on 1300 882 386 for a no obligation chat. If you would rather get in contact through email, send your question through or by email at wehelp@jfmlaw.com.au
The information contained in this post is current at the date of editing – 29 August 2024.