EMPLOYMENT LAW – Employer obligations
As an extension of assisting clients with their business purchase, or as a stand-alone enquiry, we offer every-day business owners with assistance to ensure that they are effectively meeting their legal obligations as employers.
As a business owner, you want your business to run as smoothly as possible. Employees can be either your greatest asset, or your biggest liability in business. Given that business success often relies on treating your staff well, it makes sense to have all affairs in order when it comes to your employees. Not only will it make for a happier workplace, it may also save you the headache and cost of litigation one day.
Obligations to employees and other workers come from a variety of sources, including:
- Federal, State and Territory laws;
- Industrial awards and agreements;
- Tribunal decisions; and
- Employment Contracts.
Australia’s national workplace relations system, Fair Work, started on 1 July 2009. The Fair Work Act CTH 2009 (FWA) and the Fair Work Regulations 2009 are the primary pieces of legislation governing the employee / employer relationship in Australia, and they cover the majority of workplaces.
Don’t be fooled into thinking the Fair Work Act is the only law which applies to employment. Employers are also subject to numerous other laws regarding tax, superannuation, privacy, antidiscrimination, contractor arrangements and the list goes on.
There are also the National Employment Standards (NES), which are 10 minimum employment entitlements that must be provided to all employees. The national minimum wage and the NES make up the minimum entitlements for employees in Australia. An award, employment contract, enterprise agreement or other registered agreement can’t provide for conditions that are less than the national minimum wage or the NES, nor can they exclude the NES.
Finally, there are certain employee dismissal procedures to follow if you are a small business, which is defined as a business having fewer than 15 employees, calculated on a simple headcount of all employees including casuals who are employed on a regular and systematic basis.
Buying an existing business – Don’t inherit the mistakes!
When people start up or purchase a business, generally they are full of enthusiasm and can’t wait to jump in. In the case of a start-up business, we see clients who know what they need to do but they’re so busy working they forget about their basic obligations. We also see clients who have purchased an existing business, and although they are no less passionate, they inevitably end up inheriting some of the previous’ owners’ mistakes and they, in turn, become the norm.
Our tips for smooth business operation
One of the most important things you can do as a business owner is to ensure your employment and workplace documentation is in order. There are thousands of employment disputes dealt with by Fair Work every year. Much of what contributes to an unhappy workplace revolves around lack of communication. What we know about disputes with employees is that they take you away from your business – disputes are costly, time consuming and stressful, and quite often they could have been avoided by simply getting things right at the start.
TIP #1 – Employment Contracts
It is not a legal requirement to have written employment contracts, as the law recognises both written and verbal contracts. However, we know from experience that having a well drafted employment contract relevant to your business should be at the top of your “to do” list.
In addition to the basic information, an Employment Contract should set out very clearly the role description, conditions of employment, any probation period, hours of work, pay, leave entitlements, confidentiality obligations, possible restraint of trade, grounds for termination and so on.
Within any business you will have need for more than one type of Employment Contract. We see so many butchered DIY employment contracts, which have often been sourced from the internet, and are very wrong for the position they’re meant to be covering.
In the event of a dispute, the parties will look to the Employment Contract first, so it pays to have a good one. If there’s no Employment Contract, you may be left trying to prove your version of events is the one to believe.
TIP #2 – Induction training & record keeping
All employees should attend induction training to become familiar with the workplace and any workplace health and safety issues. A carefully developed induction training process can protect your business from risks including health, safety & environmental issues, discrimination and unfair dismissal claims.
The real key is to ensure that you keep written records and have employees sign off on every aspect of their training once it is complete. It is very hard for an employee to argue they didn’t know something when they have specifically signed off on that training. Signed records aren’t going to absolve you of all responsibility, but they will go a long way towards defending any claims where the employee has not followed their training.
TIP #3 – Office or Workplace manuals
Obviously different industries are going to have different manuals for different jobs. What we are referring to here is a generic business manual which sets out your particular business vision, values, mission statement, your expectations of your employees (for example, attendance, use of mobile phones during work hours, meal & smoking breaks), leave policies (e.g. when can employees take annual leave, when can you insist on a medical certificate etc), your behaviour expectations (e.g. what constitutes acceptable behaviour, what constitutes serious misconduct and is grounds for termination of employment), sexual harassment policies & workplace health & safety policies, just to name a few. In this technological day and age, it’s even a good idea to have a social media policy for your staff to follow – what they do and don’t post on Facebook about their job or fellow employees, and when they post it, are all things to consider.
In some businesses, it is prudent to have a separate and thorough Workplace Health & Safety Manual, and whether or not that’s necessary depends on the type of work your employees are undertaking. One thing should be consistent amongst employers, and that is that every employee should know what to do if there’s an incident or injury, who they report to, and what steps to take.
Having Workcover insurance is of course a legal necessity, but there any many other steps you can take in your business to minimise your risk and liability.
TIP #4 – Invest in employee management & performance documents
This is where getting good legal advice can really help. We know that happy employees and effective performance management creates a harmonious and productive workplace, which in turn enhances the value of your business and the bottom line.
If you have an underperforming employee, or you have an employee who is overstepping the boundaries, best practice dictates that meetings should be held and employees should be given warnings in writing before any steps are taken to end their employment.
The Fair Work Commission has repeatedly taken the position that employees should be given a chance to fix any performance issues before they are fired. You might like to consider a series of precedents for your business including written warnings, letters dealing with underperformance, a template for records of meetings with employees, annual performance reviews and of course, a letter of termination. If a meeting with an employee involves a risk of their employment being terminated, you should consider allowing them to have a support person accompany them to the meeting.