Being an employer in modern times is not easy. There are many things to consider, such as insurances, business licences and registrations, hiring and retention of employees and maintaining a healthy cash flow and revenue, to name a few. Unfortunately, many businesses do not have the time or resources to consider such issues and leave themselves at risk of litigation when unforeseeable problems arise.
Too often, we see well-intended small businesses trying to do the right thing; however, due to the evolving landscape of employment law, many employers find themselves breaching the Fair Work Act and relevant laws industrial and OHS regulations. Ranging from discrimination to unfair dismissal and adverse action claims, there are recurring breaches that we see small businesses making that could be avoided if proper risk management strategies were implemented. We explore the top 3 reasons below:
1. Not having Company Documents – In recent cases that we have dealt with, some employers had engaged employees without issuing a contract of employment. When a dispute arose, it was discovered that there were no explicit terms to deal with it. This causes ambiguity in the employment relationship, and the employer incurred avoidable costs had a proper employment contract existed.
In other instances, the employer could not discipline an employee who had done something wrong because they did not have a suite of Policies and Procedures that reflected their company values and the standard of behaviour and performance expected from their employees.
The above disputes would have easily been avoided had the proper documents been in place and issued to the employee at the commencement of their employment.
2. Not implementing Policy & Procedures – Another issue we often deal with is cases where Policy & Procedures may be present. Still, they were never distributed to or acknowledged by the employees.
Recent case law demonstrates that having an employee merely cite or acknowledge the existence of a policy is not sufficient and that an employer ought to discharge their obligations properly by delivering (at least) training annually so that they are aware of the expectation of how to behave and act at the workplace.
Whilst there is a wide range of Policies & Procedures that are available, at the very least, every business, notwithstanding its size, revenue or number of employees, should have the following policies (including but not limited to): OHS, social media, leave, disciplinary action, alcohol and drug policy, reimbursement and allowances, etc.
Depending on your industry and area of work, you may also require a business-specific Policy & Procedure to be developed.
3. Not conducting Proper Investigations – There may be times when allegations are made by one employee against another, or if a workplace incident has occurred (e.g. damage to company equipment, etc.).
At this point, many employers make the crucial mistake of finding guilt or attributing blame without following due process and affording procedural fairness to the employee. Notwithstanding that a valid reason for disciplining and/or dismissing the employee may be present, there are numerous cases where employees were still paid compensation or reinstated just because the employer did not follow the principles of natural justice.
Many of these situations may have been avoided if the employer had conducted proper investigations into the allegations or the alleged misconduct. Better yet, workplace investigations are best often performed by an independent and objective person (externally, e.g., investigative firms, lawyers, etc.) who can impartially gather the evidence and present it to the final decision maker within the employer’s company.
The huge benefit of following this procedure is that it minimises the risk of litigation, and should litigation ensue, the report may be covered by professional and legal privilege.
In short, when running a business where you hire employees, be sure to have company documents relevant to your business and that you have implemented the documents and delivered the requisite training to ensure that your employees know what their employer expects of them.
Note: This is not legal advice, and the information is only general in nature. Should you have any queries, please get in touch with us at [email protected]
Daniel Le