Unfair dismissal — how to protect your business

18th November, 2016

Unfair dismissal - how to protect your business - blog

Sometimes parting ways with employees may not be as amicable as we may like, so how do you make sure your business is protected in those instances?

Unfortunately people leaving the business because they have not met expectations happens every day, and it’s crucial you manage the exit of an employee correctly.

From a legal viewpoint, both the business owner and employees have rights and obligations that must be respected.

An understanding of the Fair Work Act, which governs unfair dismissal in Australia, is crucial. New Zealand businesses can find information specific to New Zealand laws here.

Here are my top tips to manage your risk and make sure your business is compliant:

Have detailed HR processes and procedures

Having great processes and procedures is the bedrock of any successful business so why should it be any different when managing your employees?

Yet business owners often neglect the human side of managing and running the business because they get caught up on the traditional functions including producing, selling, marketing, and customer service.

Make sure your business has detailed HR policies and procedures and clearly communicate them to all employees.

Have systems in place that provide employees an avenue to voice their concerns on matters such as workplace safety, workplace bullying and sexual harassment.

Manage by communicating

Don’t assume that employees will automatically know what you expect of them.

Make sure you have detailed role descriptions, regular performance reviews and mechanisms where you and your employees can provide valuable feedback if either is unhappy.

Being upfront, professional and honest with your staff is one of the best tools you can use in clearly communicating your concerns.

Also encourage an open door policy where staff can raise their concerns to you without being afraid of retribution.

It’s about providing a fair workplace for employees and for the business owner.

Document everything

If you are not happy with an employee’s performance then document the reasons why.

Voice your concerns during a meeting with them, and provide them with the opportunity to give you feedback.

Assess if they need further training and make sure you provide that training.

Set a reasonable period of time for the employee to improve their performance and work together on a plan to help them achieve this.

Document everything to ensure that your expectations — and theirs — are clearly understood.

It is also essential that you discuss and document the possible consequences, including dismissal, if their performance does not improve within the reasonable period of time that you both agree on.

Make sure that you both sign off on all documentation as a form of mutual acceptance.

Having a detailed mutual agreement in writing that is signed off by all will protect your business and will show you have taken all reasonable steps to address any staff performance issues in a fair and just manner.

Know your rights and the rights of your employees

Unfair Dismissal in Australia is governed by the Fair Work Act 1999 under The Fair Work Commission.

Going to their website is an excellent starting point in getting to know your rights and obligations and those of your employees.

Once again, it’s about doing the right thing and achieving a win-win for your business and for your staff by creating a fair workplace.

The website has great templates that you can download and use to do a quick audit of your business to make sure you are compliant.

Don’t leave it until an issue arises; be proactive now.

Understand that inaction will hurt your business

Once again, clear, professional communication and documented records are the key.

Inaction by simply ignoring certain staff and labelling them as “whiners” or “chronic complainers” will do harm to your business, staff morale and other employees.

Follow what is required, know what action you need to take, and take that action.

When I had an unfair dismissal claim brought against my business, I used it as an opportunity to improve on my policies and procedures to ensure that my business was compliant and continues to be a fair workplace.

As a business owner, it’s about respecting the rights and concerns of your staff and addressing and documenting expectations and consequences.

It’s also about knowing your rights as a business owner and protecting your business against frivolous claims.

If you have any concerns, now is the time to review and improve your business compliance to ensure you are protected and that you are honouring your obligations as required by law.

View it as an opportunity to build a better business, like I did.