With the Sydney housing boom slowing, in combination with a weakened Australia dollar and political instability as a consequence of the Turnbull government being ousted, it is no surprise that big corporates with large footprints in Australia are thinking about, and in the case of Singtel Optus (“Optus”), are in fact implementing significant restructuring and change management initiatives. As many of our readers would have seen in the news, Optus has announced plans to eliminate 400 local jobs in an effort to reduce its labour costs amid a more competitive landscape for telecommunications service providers in Australia.
In a society where the use of technology including mobile telephones and computers has become so prevalent, it is no surprise that electronic devices are changing the way in which we communicate. There has been a growing trend where employees and employers now communicate almost exclusively via email or text message. As such, it is not unexpected that there are a number of employers who have terminated the employment of their staff by phone, text or email in order to avoid those hard to have conversations with their employees.
The explosion of social media use over the years presents many challenges to the employment relationship. The use of social media has blurred the boundaries between work and non-work life. This has led to many employers having to deal with situations where employees have posted something in their private capacity on their own social media accounts, which has (or is likely to have) a negative impact on the employer.
With the Christmas and New Year period upon us, many employers will be celebrating the end of 2017 with their employees. Whilst the 2016 comedy film “Office Christmas Party” is an extravagant portrayal of a Christmas function gone bad and which seems, in many ways an over-exaggeration of what really happens, in our experience these Christmas events are notorious for being a potential breeding ground for inappropriate workplace behavior. These parties and events may put employers at risk of litigious actions such as sexual harassment, bullying, discrimination and unfair dismissal claims.
For larger organisations, or employers who engage a multifaceted workforce, an enterprise agreement (“EA”) can be a very sensible and practical instrument to simplify the terms and conditions of employment for its workforce. It is not uncommon for employers to have a number of modern awards applying to their employees and thus creating complexity and administrative difficulties. In addition, as modern awards are not focused on individual businesses but apply across industry, many of the terms are often difficult and costly to implement and on the whole can be a challenge for a business to ensure compliance.
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.
What happens when an employee resigns from their employment and they then advise you they wish to rescind their resignation and continue with their employment. Now, if the employee is an asset to your company you may be feeling quite relieved. However, on the other hand, if the employee really hasn’t been a suitable fit for the organisation or is a poor performer then you may be reluctant to accept their continued employment. In this update we consider whether notice provided in this manner is valid and whether an employer has any obligation to accept an employee’s change of mind after providing their resignation.
Often disputes between departing employees and their employer result in a settlement or agreement. Some employers also wish to provide additional benefits to departing employees as a show of goodwill or to ensure the employee leaves in an amicable manner. Should these agreements, or additional benefits be subject to the employee agreeing not to commence any legal proceedings against the employer? Most employers would surely respond that this would be desirable. It is not uncommon for employers to require their employees in such circumstances to enter into a form of release.
There is widespread uncertainty as to the form any such release agreement should take and the default is to use a deed of release. We receive many queries from employers about whether it is appropriate to use a deed of release and what can be included in the deed. Understanding the importance of how a deed of release can assist and protect your business can be highly beneficial.
What happens when you want to terminate the employment of an employee, or as an employee you wish to resign but your contract of employment is silent on how much notice is required. This may seem like a silly question, and many employers still believe that the notice required on termination relates directly to the frequency of payment. In other words, if an employee gets paid fortnightly they are entitled to give 2 weeks’ notice. This is not the case, notice is usually a matter agreed between the parties on commencement of employment and contained in the written contract of employment, but what happens when there has been no prior agreement and nothing in the contract of employment dealing with this issue. How much notice must be given and what are the consequences for failing to provide sufficient notice?
Many of my clients tell me that they just want to terminate the employment of a troublesome employee and they do not want the hassle of a long drawn out process they believe is required to ensure the employee cannot bring an unfair dismissal claim. I often hear the refrain that it is “impossible to terminate employees in Australia”.
Now I do understand the business imperatives that require quick action in circumstances where an employee is consistently underperforming or is just not a suitable employee. The simplest answer to this issues is to ensure that all employees are properly managed from the day they are hired. Actually, it should start before commencement, as choosing the right employee carefully goes a long way in preventing the issue from arising at all. If employers did this properly, I promise I would be out of business.
Adcock v Blackmores Limited & Ors [2016] FCCA 265
Background
This case concerned an application by Mr Adcock, the former Commercial Manager (Asia) of Blackmores Limited (“Blackmores”) a publicly listed company which produces and sells a range of natural healthcare products, who sought compensation in excess of $140,000 on the basis that his employer dismissed him by refusing to recognise that his position was redundant and had repudiated his contract of employment by failing to pay him redundancy entitlements under an enterprise agreement. In addition, Mr Adcock claimed that Blackmores’ HR personnel knowingly or otherwise reckless misled him as to his workplace rights, namely that he was entitled to redundancy pay.
Change management and downsizing has the potential to present a melting pot of legal issues for employers, and there are many practical traps for organisations to consider in planning and executing redundancies especially in a tough economic environment.
The legal definition of redundancy in Australia can be readily found in the Fair Work Act 2009 (Cth) (“the Act”). In order to give rise to a genuine redundancy and entitlement to severance pay under the Act, the test to be satisfied is whether the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour. Redundancy is not an excuse for terminating an employee for poor performance.