The termination of the employment relationship is one of the most challenging and frequently litigated areas in employment law. Unsurprisingly, the first half of 2017 has been no exception. There have been numerous cases go before our judicial system which have raised nuanced, and in some respects untested questions of law to be determined. In this legal briefing, we provide a recap on three exceptionally informative and instructive cases for employers, each dealing in their own way with a unique and distinct issue in relation to termination of employment.
With the arduous task of conducting performance appraisals out of the way, many employers understandably think the hard yards have been done. Although carrying out performance reviews may necessitate both positive and negative conversations with employees, depending on the kind of feedback being provided, many employers often disregard a fundamental and imperative step in the process to consolidate such discussions.
Phew – annual Performance Reviews done! This is an often heard at this time of year. Unfortunately, performance management and annual or bi-annual reviews instill dread in both the employee and managers tasked with conducting performance reviews. However, despite the angst and stress that accompanies performance reviews, not much else is achieved as a result of the review, other than to tick the relevant box stating they have been done. This surely cannot be the purpose of performance reviews. It certainly does not constitute appropriate performance management.
The beginning of the financial year marks a number of important to changes to the employment law area. These changes, relate to minimum wages, penalty rates, the unfair dismissal threshold, annual leave and the Fair Work Information Statement. A summary of the changes to come into force from 1 July 2017 are outlined below.
Some employees hardly take any personal leave, and continue to accrue their personal leave days each year. However, on the other end of the spectrum, some employees appear to take vast amounts of sick leave, and often in excess of the statutory minimum of 10 days paid personal leave each year. Interestingly and possibly not surprising, a recent workplace investigation found that about 50% of all unplanned absenteeism was not medically related and costs businesses a staggering $33 billion annually. In this regard, the difficulty faced by employers is the ability to identify the reasons for sick leave, address any issues that may be a relevant factor in an employee taking “serial sickies” and dealing with the issue in an effective manner.
Disciplinary action for poor or inappropriate performance is all too often seen in very one-dimensional terms. Often, it can be a fantastic opportunity for the business to address difficult issues in a constructive and ultimately extremely cost effective way. However, in most circumstances the use of warnings serves only to alienate and disincentivise employees, to the extent that they either leave the business or the business terminates the employment. When it comes to disciplinary action in the workplace, it is our experience that many employers seem to limit themselves to the use of only warnings or dismissal even though there may be a range of other options available to employers.
A recent decision of the Appellate Division of the Federal Court of Australia has recently decided to award over $6 million dollars in damages to an ex-employer in relation to the misuse of its confidential information by two former employees. What is most interesting about this decision is the fact that the order was imposed on the new employer who had benefited from the breach. The decision illustrates that in circumstances where a new employer turns a blind eye to the wrongdoing of its new employees, it may find itself embroiled in costly litigation with possible significant financial consequences.
The ability to attract and retain talented staff greatly benefits an organisation’s ability to sustain a competitive advantage. The loss of a key employee can have a significantnegative impact the business. Remuneration plays an important factor in the attraction, engagement, motivation and retention of employees. Employers need to be well aware of their obligations surrounding this sensitive subject as well as considering what, in addition to salary, their organisation may offer an employee to improve engagement and motivation within their business.
The incidence of domestic violence appears to be on the increase and it is now a much discussed social issue in Australia. The statistics regarding domestic violence in Australia are horrifying – one in six women, and one in 20 men, have experienced violence from a current or former partner since the age of 15. Just in the last week there were two instances of serious injury from domestic violence reported by mainstream media.
Fair Work Ombudsman Warning to Employers
The Australian Government has consistently signalled that it intends to ensure companies who do not pay their employees properly or who have breached the workplace laws will face significant penalties. Given the numerous high profile cases in which employee have been underpaid by their employer including companies such as 7Eleven, and Dominos, this has become an important issue for both the Australian Government and the Fair Work Ombudsman.
Surprising as it may seem, a Western Australian Court has accepted that a 10 year restraint may in fact be enforceable. An engineer with highly specialised skills has temporarily been barred from working with any competitors in Western Australia after the Western Australia Supreme Court determined that a 10 year restraint clause was reasonable, at least until the Court has the benefit of having a full hearing into the matter.
The Fair Work Commission (“FWC”) handed down a landmark decision yesterday regarding the payment of penalty rates that may have far reaching consequences for many employees and their employers.
As part of the 4-yearly review of modern awards under section 156 of the Fair Work Act 2009 (Cth) (“FWA”) the Fair Work Commission has reviewed penalty rates in a number of modern awards in the hospitality, retail and pharmaceutical industries.