Friday, November 20, 2009

Avoiding the Unfair Dismissal Pitfalls?

One of the major changes that came into effect with the introduction of the Fair Work Act on the 1st July 2009 was the introduction of new unfair dismissal laws. These have been specifically designed to protect the rights of the employee. The impact of these changes is that approximately 100,000 businesses or nearly 3 million employees, who were previously exempt, will now fall under the unfair dismissal sections of the legislation.

What is an unfair dismissal?

An unfair dismissal is one where the person has been dismissed and the dismissal was “harsh, unjust or unreasonable”.
The emphasis is therefore on the employer to ensure that processes and procedures are in place, which when followed, ensure that in retrospect the dismissal cannot be determined to be unfair or, to put it another way, the dismissal could not in hindsight be determined to be harsh, unjust or unreasonable.

Does it affect me, as I’m a small business?

There is a common misconception that a company with less than 15 employees is exempt from the legislation. This is not the case. The legislation provides the small business protection by insisting that an employee must have worked with a business for at least 12 months before they are eligible to make a claim under the act. For all other businesses with more than 15 employees the qualifying period is 6 months. All businesses are therefore subject to the risk of unfair dismissal claims.

Employment Contracts, job descriptions and, Policies and Procedures?

To ensure that in retrospect a dismissal cannot be determined to be “harsh, unjust or unreasonable”, it is imperative that the employer attends to the necessary detail inherent in the employer/employee relationship. This detail includes specifying the employee’s terms of employment via the employment contract and also ensuring that over the years it is regularly updated in accordance with the changing terms of employment. The employee’s primary job responsibilities should also be clearly defined in the Job description. Organisational policies and procedures should be put in place which outlines how poor performance, grievance, misconduct and termination matters are to be handled. Should you find yourself having to defend an unfair dismissal claim, these documents will form the cornerstone of your defence. If they are not in place, your defence will be seriously weakened so be prepared to pay the price.

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