The current industrial relations environment makes having staff the riskiest thing you can do as a business owner. Workplace laws increasingly place greater responsibility on an employer for ensuring a safe and fair workplace. As an employer you must be familiar with the Modern Award System, keep on top of changes to the Fair Work Act 2009 (Cth) and ensure compliance with any state or territory based occupational health and safety legislation that may apply to your business. If you are not on top of your legal obligations, it will cost you.
Employees have statutory rights that include being able to make a claim to the Fair Work Commission or court if there is a breach by their employer of their workplace entitlements. If you have ever got to the litigation stage, you understand the adverse impact such a claim has on your time, profitability, and workplace culture. By understanding the common pitfalls and adopting a pre-emptive strategy, you can safeguard your business and create a thriving workplace.
Top 3 common mistakes
In our view, the 3 common mistakes employers often make are:
- Failing to establish clear employment terms on which their workforce is engaged;
- Failing to pay their employee(s) correctly; and
- Failing to terminate an employment relationship correctly.
You can mitigate your risks by spending time now reviewing your current workplace practices and identifying any areas you feel there are deficits. Once you have done this, we can help you implement a solution.
If you need help in reviewing your workplace practices and identifying issues, call us on (02) 9199 8597 or email us to discuss how we can help you.
Solutions
How to ensure you have clear and correct employment terms?
The employment contract governs the relationship between the employer and employee. We cannot stress enough how important this document is. As an employer, it is your responsibility to ensure that the employment contracts for your workplace comply with workplace laws and contain:
- An accurate (and up to date) description of the employee’s role;
- Protection mechanisms for your confidential information and intellectual property;
- Post-employment restraints (if applicable);
- The term of the probationary period; and
- The terms on which the employment relationship can be terminated.
Issues arising from an employment contract typically stem from the use of an inappropriate template document that is outdated, unsigned or incomplete, or does not comply with current workplace laws. In some cases, employers and employees fail to enter a written employment contract to begin with.
The risks associated with an inadequate employment contract are numerous. For example, if you fail to include key performance indicators (KPIs) and the consequences of not meeting those KPIs in an employee’s contract, it will be very difficult to manage an employee’s underperformance or poor performance later.
For help reviewing or drafting your employment agreements, call us on (02) 9199 8597 or email us.
How to make sure you are paying your employees correctly?
Suncorp and BHP are two major employers headlining the news with their underpayments to employees that go back decades. If businesses that have large HR departments are getting it wrong, it is very easy for smaller businesses to underpay employees.
It can be confusing determining the appropriate pay for your employees. That is why it is crucial to know first, what awards apply to your employees and second, the proper classification of your employees, to ensure they receive the correct entitlements. Don’t forget any special allowances (for e.g. laundry, travel or meals) either. Failure to be on top of these entitlements, may leave you fighting allegations of underpayment which will likely result in hefty penalties from the Fair Work Commission.
If you aren’t sure whether your employee falls under an award or how to classify them, we link some tips and tricks.
How to terminate your employees?
If you have ever had to make the difficult decision to ‘let someone go’ or ‘off-board’ an employee, you know that it is easier said than done. This is often the area where everything can go wrong and all sorts of other problems with the employment relationship emerge.
You must have clear processes in place for terminating an employment relationship and ensure that you follow these protocols. Failure to do so, may result in:
- An employee feeling like they had no choice but to resign. This may lead to a claim for constructive dismissal.
- An employee with poor behaviour or poor performance who has been placed on a Performance Improvement Plan alleging workplace bullying.
- An employee who was terminated after exercising their workplace rights bringing a General Protections claim.
- An employee who was terminated for conduct issues bringing an unfair dismissal claim because the investigation process was not done properly.
- You being unable to show that an employment relationship was terminated as a result of a genuine redundancy.
How we can help
There are many pitfalls waiting for the unprepared employer. Seeking advice now can help prevent workplace disputes later and allow you to concentrate on building your business.If you would like to minimise the risks associated with employing staff, call us on(02) 9199 8597 or email us.
The information contained in this post is current at the date of editing – 18 October 2024.
