New IR laws affect you!

Ok, you lot. It’s time to pay attention to a matter that we would all rather did not exist. For years the difficult job of dismissing employees or making them redundant has been made a little easier due to the Coalition’s WorkChoices regime. In fact, many managers have no experience at all dealing with unfair dismissal provisions. But in just two weeks the IR landscape radically changes. Many small businesses are telling me they are exempt if they have under 15 employees. But they can still be caught out.

As we explain today, even if you are a small business with less than 15 full time staff, you must give an employee a warning and the opportunity to respond before you dismiss them. You must fill in a checklist when you dismiss someone or you could find yourself before the FairWork Australia Tribunal. The checklist is basic and if the boxes are filled in, you should be safe from further claims.

All employers and managers know that one of the worst jobs is to sack someone. It is the rare employee that agrees with the boss that they should be sacked. From 1 July, the employee can take their claim to the Fair Work Tribunal. Having a dismissal matter dragged on when the employee takes it further can be a cause of anxiety that the manager or business owner does not need. So it is essential you and your managers know the new rules, get the checklist and tick the boxes.

The second big change for smaller businesses is around the redundancy provisions. After July 1, all businesses – big or small – that make an employee redundant have to be able to prove that the business was unable to re-deploy the employee into any other part of the business or a related business. This means you need to know the skills of your employees when they join and keep those records up-to-date to show their skills can not be deployed elsewhere.

What this means for small business is a lot more paperwork. You need to recruit better, keep records of skills, do thorough performance reviews, provide written warnings and tick checklists. For larger companies of course there is a lot more rules and paperwork required. For more details on this, see today’s detailed story.

The best idea is to talk to your book keeper and accountant and to make a list of the records that should be in all employee files. There is basic software around to do this so that could be a good investment and will ensure all managers comply.

Whatever you do, don’t turn a blind eye and think these changes don’t affect you. We are moving back into a more adversarial culture and employees will be quick to explore their new rights when you dismiss them or make them redundant. They will know their rights, you need to know yours.