As a business owner we wear many hats. We’re the CEOs, the Marketing GMs, the CFOs, the COOs, the Head of HR, the head BDM and the list goes on.
Typically, we start out in business because we have a good idea, or we are good at what we do. We can’t be experts in everything and nor can we be across everything all the time…even though this is what society and various legislations prescribe.
As HR Consultants who represent employers, we commonly hear that employment legislation for small businesses are too burdensome and time consuming to comply with. This means that unfortunately, well intentioned employers end up defending unnecessary claims of unfair dismissal before the Fair Work Commission.
I know this isn’t something business owners typically like to promote. Yet, chances are, if this is discussed, you will find your fellow business owners will have had to defend a claim at one point or another.
Statistics from the Fair Work Commission show:
“In the first three (3) months of 2019 alone, over 3500 unfair dismissal claims were lodged against employers”
The Small Business and Family Enterprise Ombudsman, Kate Carnell, hears the business community. Ms Carnell has commented in a recent review of the Small Business Fair Dismissal Code, that the Code is “not delivering what was intended” and has called for an overhaul.
Further statistics show that:
“less than one (1) per cent of unfair dismissal claims were backed by the industrial umpire”
While this statistic may seem favourable to employers, more businesses than not, have had to spend significant time, money and resources to defend such claims.
Many employers chose to pay the employee (or ex-employee) an amount prior to proceedings progressing to save themselves time and money down the track.
The painful and frustrating fact is, whether or not an unfair dismissal occurred, employers WILL spend unnecessary time, money and even more time managing the emotions that come with such a claim.
As employer representatives, we aim to provide easy to follow and practical steps to assist employers to reduce the risk of such a claim, or if a claim is brought against businesses, practices that will strengthen the employer’s ability to fight such a claim.
Being proactive is the most effective way to avoid facing a claim, and for this reason we highly recommend implementing the following key practices and frameworks:
1) Maximise the probation period (and know what Minimum Employment Period applies your size business);
2) Maximise the onboarding process;
3) Document and retain copies for file/diary notes of all conversations with employees regarding their performance or conduct;
4) Make the hard decisions early on, in the probation period if the employee is not what you originally thought;
5) Ensure terminations are communicated in writing;
6) If your business has policies in place, ensure these are followed.
Do you have any of these in place?
If not, what do you currently have in place to avoid coming face-to-face with an unfair dismissal claim?
Have your say below – we would love to hear from you!
Photo by Jean-Philippe Delberghe
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