Employsure Workplace Presentation | Employee Redundancy and Termination
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This presentation by Employsure provides an overview of the employee redundancy and termination process. It is designed to help employers understand their rights and obligations. It answers the questions: What are the conditions for legal termination? What is the fair process for dismissal? Which employees have extra protection? What is adverse action? and How does unfair dismissal work? Check the notes section for more information on the slides. With one of the most complex workplace relations systems in the world it's a challenge for owners and managers of SMEs in Australia to ensure they are compliant. Small businesses often struggle to understand their obligations to employees and that's where Employsure can help. Employsure protects employers from risks by providing unlimited advice, legally compliant documents, insurance and representation. Employsure is a workplace relations specialist dedicated to helping small businesses succeed by creating fair and safe workplaces. Call us: 1300 651 415 Visit us at: https://employsure.com.au/ LinkedIn: https://www.linkedin.com/company/empl... Facebook: https://www.facebook.com/employsure.c... Twitter: https://twitter.com/Employsure
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Employsure Workplace Presentation | Employee Redundancy and Termination
- 2. • Redundancy pay can be significant • Risk of unfair dismissal if it is not a genuine redundancy • Genuine redundancy – Operational requirements – Consultation process – Redeployment • What grounds can you select employees on? • B&C Industry specific redundancy provisions – Resignation = redundancy Redundancy or termination Is redundancy easier?
- 3. • You need a valid reason for termination and must follow a fair process • If a dismissal is harsh, unjust or unreasonable, the employee is entitled to compensation or reinstatement • Which employees have protection? • What is a valid reason and fair process? • What if the employee resigns? • Is redundancy easier? Unfair dismissal
- 4. • All employees are entitled to protection against adverse action because of a prohibited ground • Adverse action is any action to the detriment of the employee • Prohibited grounds include discrimination, exercising a workplace right or absence because of illness or injury • Why is it such an issue? - Uncapped compensation - You must prove the action was not connected to a prohibited ground Adverse action
- 5. You run an engineering firm with 20 employees, one of whom has been underperforming. The employee is a full-time employee and has been with the company for 9 months. The employee has been warned about his lack of performance on a number of occasions. The employee has previously made a complaint that his Manager is bullying him and placing unreasonable working demands on him. Can you dismiss?
- 6. • If a dismissal is harsh, unjust or unreasonable, the employee is entitled to compensation or reinstatement. • Which employees have protection? • A dismissal will be unfair unless it is for a valid reason and a fair process was followed in relation to the termination. • Mitigating your risk of a claim. Termination Unfair dismissal
- 7. • All employees are entitled to protection against any adverse action because of a prohibited ground. • What type of action? • What are prohibited grounds? • Why is it such an issue? Adverse action Adverse action
Notes de l'éditeur
- The tendency to label other forms of dismissal as redundancy (because it is a less personal reason for the termination and easier for the employee to break to their family) can be risky and lead to a claim for UD if it is not a genuine redundancy. Redundancy pay can be significantly more than the notice payable on normal termination. Genuine redundancy: the employer must: show that the operational requirements of the business have changed and the employer does not need the employee’s job to be done by anyone; follow consultation process; and offer any reasonable redeployment opportunities (in company and associated entities) What grounds can you select employees on? Ask the audience Often employers believe last in first out – indirect discrimination risk In practice redundancy when: the job someone has been doing is replaced due to the employer introducing new technology (i.e. it can be done by a machine); the business slows down due to lower sales or production; the business relocates; a merger or takeover happens; or the business restructures or reorganises.
- Intro to second half – going to look at types of claims …. Purpose: termination is always a high risk area, so you need to know the potential risks ensure you follow the right process and have right evidence. A dismissal will be unfair unless it is for a valid reason (or genuine redundancy) and a fair process was followed in relation to the termination. If a dismissal is harsh, unjust or unreasonable, the employee is entitled to compensation (26 weeks) or reinstatement. Protection: There are some cases where employees are protected so check details with your workplace specialist before proceeding. Valid reason: relating to capacity, conduct or performance – what is poor performance and what is misconduct (see below) Fair and transparent process – including adequate notice and an opportunity to respond What if they resign - Constructive dismissal Top tips: Contracts, policies and JDs: provide protection for employers and help to set and manage expectations from the outset Contracts: awards provide minimum protection for employees but no protection for employers. Contracts can set out protection in terms of return of company property, confidentiality and intellectual property protection and post termination restraints. Policies: Sets clear expectations for employees in terms of their conduct (eg absence notification, dress code). Strengthen your position in relation to performance management and disciplinary action (eg what constitutes misconduct). Sets out clear procedures to ensure certainty and consistency and helps ensure compliance with obligations (eg bullying and harassment). Job descriptions: provides objective understanding of the role to be filled and what skills, attributes and qualifications the successful candidate must have. Important as it sets expectations around the duties and responsibilities of the role and will be a reference for effective performance management and during redundancy. Additional notes: Constructive dismissal employee resigned because they were forced to do so because of the employer’s conduct. Eg: where the employee is effectively instructed to resign by the employer in the face of a threatened or impending dismissal; or where the employee quits their job in response to conduct by the employer which gives them no reasonable choice but to resign. Eg a director said to his secretary: ‘She is an intolerable bitch on a Monday morning’ = constructive dismissal. A manager to an employee: ‘You can’t do the bloody job anyway’, not believing this to be true. Accusing them of theft. Reduction in hours can be where this amounts to a repudiation of the contract of employment Performance or misconduct Process: is very different for performance management and disciplinary, but fair process relates to both. Employees with over the minimum employment period must be given the opportunity to improve their performance or a number of warnings in relation to misconduct (depending on how serious the misconduct is). Performance and misconduct does not have a clear line – sometimes can pitch as either depending on end goal and appropriate policies Eg not understanding an instruction or deliberately not following a policy.
- Another key risk on termination, but also one which needs to be considered at all stages of the employment life cycle All employees (and prospective employees) are entitled to protection against any adverse action if the reason for that action is a prohibited ground. Adverse action: any action to the detriment of the employee. Can include termination a change in conditions, disciplinary action, demoting them or reducing their hours. Prohibited grounds: include discrimination, temporary illness or injury or because someone has made a complaint at work or about their employer – could be a bullying claim or a complaint to the WHS regulator or a workers compensation claim. - Ask audience what are attributes are protected from discrimination (race, colour, age, disability, family or carer’s responsibilities) - Extended periods of absence for illness and injury: protected for 3 months - adverse actions risks are huge in this area. Why is it such a big deal? Penalties and remedies: incredibly broad, can include interim injunctions to prevent action, reinstatement, uncapped compensation. Onus: Employer has to prove the reasons for the action are not prohibited and the prohibited ground does not even need to be the main reason. So what: does not mean you can never discipline or terminate an employee with a protected characteristic – no, as the action is only unlawful if taken because of a prohibited ground. You just need to be careful and document actual reasons to protect yourself and follow process – we can assist. Additional notes Also this one is interesting - http://www.employsure.com.au/latest-news/6199/ Union; first employer to have been found to have unfairly dismissed somebody because of political views. Additional notes: process for AA on termination: application to FWC within 21 days, FWC issues a certificate once satisfied all reasonable attempts to resolve the dispute have been or likely to be unsuccessful. Court application must be made within 14 days or the parties can consent to arbitration (within same timeframe). If AA claim not related to termination: discrimination claims can be barred after 12 months from injury, contract breaches are 6 years from cause of action. Same remedies (eg interim injunction, compensation – obviously no reinstatement). If prospective employee, no power to make give role – compensation. The maximum penalty is $51,000 per contravention for a corporation, and $10,200 per contravention for an individual (60 penalty points). The FW Act also provides that orders may be made by a court on application to it. The court may make orders: granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention; an order awarding compensation for loss that a person has suffered because of the contravention; or an order for reinstatement of a person. The orders that FWC may make following a consent arbitration are: reinstatement to employment: payment of compensation and/or lost remuneration; for continuity of service and/or maintaining the person’s continuous service. Additional notes on prospective employees and the interview process: identifying the right candidate and ensuring you are not opening up the business to risks. Risks: the law even protects prospective employees from essentially discrimination (eg not offering them a job or offering a fixed term contract because the candidate is female – and may want time off to have a child). Interview questions: Having set interview questions and an appropriate selection criteria allows you to ensure you are can compare candidates in a fair and objective manner. Means you can ensure you pick the right candidate and protect yourself against risks. Health questionnaires and asking questions about health. This is a common question. Generally, you should only ask this question if it relates to an inherent requirement of the role, but still be cautious as there is a minefield of possible issues and protected characteristics which you must avoid (eg family and caring responsibilities or previously issued workers compensation claim.
- Let’s see if they can identify this issues we have been talking about in the first half of the slides. Questions to ask Can we dismiss? What is the process? What notice and entitlements have to be paid? Issues He would be entitled to unfair dismissal – so valid reason and process? He has also asserted that the complaints on his performance we unjustified and based on bullying – AA risk We would need more information what the performance issues are; whether the required level of performance was clearly explained to her at the performance review and whether she was given training or assistance to meet this level (ie an opportunity to improve his performance); Did the company follow its policies on performance management. Circumstances around previous warnings – written, process? Does the advice change if the employer has less than 15 employees? Absolutely, the employee would not be entitled to unfair dismissal for 12 months. This means it is much easier to terminate the employee without providing further opportunity to improve or respond to the issues. However, still potential adverse action risk – so would need to be able to establish the complaint was not one of the reasons for termination. Morale of the story – you need detailed guidance on the process AND make use of the probation period!
- Purpose: termination is always a high risk area, so you need to know the potential risks ensure you follow the right process and have right evidence. If a dismissal is harsh, unjust or unreasonable, the employee is entitled to compensation (26 weeks) or reinstatement. Going back to the definition of unfair dismissal… A dismissal will be unfair unless it is for a valid reason (or genuine redundancy) and a fair process was followed in relation to the termination. See this as a two limb test Valid reason: relating to capacity, conduct or performance – what is poor performance and what is misconduct (see below) Fair and transparent process – including adequate notice and an opportunity to respond Case: Cowan v Sargeant Transport Pty Ltd [2014] FWC 5330 (18 August 2014) Background Employee was a truck driver for Sargeant and his job involved making deliveries to Woolworths. On one of his trips he was filmed by CCTV, urinating in front of the Woolworths warehouses, Woolworths brought the incident to the attention of HR at Sargeant Matter was referred to HR for investigation, HR Manager had a discussion with the employee about the CCTV footage and a decision was made to the dismiss the employee based on misconduct Outcome FWC accepted that the employee did urinate in front of the warehouse and this conduct was in breach of company policy, so there was a valid reason however there was a number of procedural flaws in the workplace investigation. Employee was not provided with an opportunity to respond prior to the dismissal decision, no one properly explained the allegations and the evidence, no support person was provided Lesson for employers Despite there being a valid reason for dismissal, procedural fairness should not be ‘lightly cast aside’ during an investigation Is notice payable? Notice is payable, unless the employee is terminated for serious misconduct, which is a high hurdle to overcome. What if the employee resigns? Constructive dismissal: employee resigned because they were forced to do so because of the employer’s conduct. Eg: where the employee is effectively instructed to resign by the employer in the face of a threatened or impending dismissal; or where the employee quits their job in response to conduct by the employer which gives them no reasonable choice but to resign. Eg a director said to his secretary: ‘She is an intolerable bitch on a Monday morning’ = constructive dismissal. A manager to an employee: ‘You can’t do the bloody job anyway’, not believing this to be true. Accusing them of theft. Reduction in hours can be where this amounts to a repudiation of the contract of employment Employees have 21 days from the date of dismissal to make a claim. How to mitigate against the risk of UD Contracts, policies and JDs: provide protection for employers and help to set and manage expectations from the outset Contracts: awards provide minimum protection for employees but no protection for employers. Contracts can set out protection in terms of return of company property, confidentiality and intellectual property protection and post termination restraints. Policies: Sets clear expectations for employees in terms of their conduct (eg absence notification, dress code). Strengthen your position in relation to performance management and disciplinary action (eg what constitutes misconduct). Sets out clear procedures to ensure certainty and consistency and helps ensure compliance with obligations (eg bullying and harassment). Job descriptions: provides objective understanding of the role to be filled and what skills, attributes and qualifications the successful candidate must have. Important as it sets expectations around the duties and responsibilities of the role and will be a reference for effective performance management and during redundancy. Continuous feedback and performance management – will improve performance and assist with engagement – don’t wait for things to become an issue. Use the probation period to test new employees – no right to unfair dismissal for 6/12 months. Employees can be terminated because of poor performance relatively easily if no other risks exists.
- Another key risk on termination, but also one which needs to be considered at all stages of the employment life cycle What is AA? any unlawful action taken to the detriment of the employee. Can include termination, a change in conditions, demoting them or reducing their hours. Other grounds include discrimination, temporary illness or injury or because someone has made a complaint at work or about their employer – could be a bullying claim or a complaint to the WHS regulator or a workers compensation claim. Who is eligible? All employees are entitled to protection against any adverse action if the reason for that action is a prohibited ground. Prospective employees are also protected: you can also not refuse to employ a person or offer them less favourable terms on prohibited grounds. Even contractors are protected. Example: Go back to the recruitment stage where you are looking to hire a new employee. Be mindful of the comments made on the interview assessment form, make sure all comments are in relation to the inherent requirements of the job and how the candidate measures up to them. Leave all other comments off paper. (eg not offering them a job or offering a fixed term contract because the candidate is female – and may want time off to have a child). Why AA claims are so significant Apart from AA claims being open to all employees and prospective employees, once a claim has been submitted by the employee, there is a reverse onus of proof. You are basically guilty until proven innocent. It is up to you, as an employer to show that the action you took was not connected to a prohibited ground. incredibly broad, can include interim injunctions to prevent action, reinstatement, uncapped compensation. Unlike UD claims where compensation is capped at 26 weeks of pay, these claims can go up in the 100s of thousands. Additional notes Also this one is interesting - http://www.employsure.com.au/latest-news/6199/ Union; first employer to have been found to have unfairly dismissed somebody because of political views. Mitigating against risks Interview questions: Having set interview questions and an appropriate selection criteria allows you to ensure you are can compare candidates in a fair and objective manner. Means you can ensure you pick the right candidate and protect yourself against risks. Health questionnaires and asking questions about health. This is a common question. Generally, you should only ask this question if it relates to an inherent requirement of the role, but still be cautious as there is a minefield of possible issues and protected characteristics which you must avoid (eg family and caring responsibilities or previously issued workers compensation claim. Document everything, keep a file note! Case : Walsh v Greater Metropolitan Cemeteries Trust (No. 2) [2014] FCA 456 (9 May 2014) NOTE: most of the case studies have been where the employer has done something wrong, this case highlights were they have taken correct action) Summary: EE was dismissed during her probationary period. EE alleged that she had made complaints in relation to her employment and that these were one or more of the reasons for her dismissal. Employer argued they dismissed EE due to poor performance and that none of her complaints raised were in relation to employment. The complaint was in relation to conflict of interest of another EE’s role and duties, and did not concern the applicant. Outcome: It was found that the EE had exercised a workplace right however that was not the reason for her dismissal. Lesson: complaint does not need to be directly related to employment, an indirect relationship was enough. This case also emphasises the need to follow policy and procedures in the workplace. Additional notes: process for AA on termination: application to FWC within 21 days, FWC issues a certificate once satisfied all reasonable attempts to resolve the dispute have been or likely to be unsuccessful. Court application must be made within 14 days or the parties can consent to arbitration (within same timeframe). If AA claim not related to termination: discrimination claims can be barred after 12 months from injury, contract breaches are 6 years from cause of action. Same remedies (eg interim injunction, compensation – obviously no reinstatement). If prospective employee, no power to make give role – compensation. The maximum penalty is $51,000 per contravention for a corporation, and $10,200 per contravention for an individual (60 penalty points). The FW Act also provides that orders may be made by a court on application to it. The court may make orders: granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention; an order awarding compensation for loss that a person has suffered because of the contravention; or an order for reinstatement of a person. The orders that FWC may make following a consent arbitration are: reinstatement to employment: payment of compensation and/or lost remuneration; for continuity of service and/or maintaining the person’s continuous service.