Get ready for some big changes in the workplace on July 1. If Howard’s Work Choices sent the pendulum swinging in one direction, Rudd’s Fair Work Act is swinging it back.
Some employment lawyers are warning that these new laws will put employees and employers back on a war footing and reintroduce rules reminiscent of the 1980s.
Who is affected? Everybody. Even if all your employees are on individual contracts, these new laws are relevant to you. SmartCompany has grilled the HR experts and lawyers for the big changes and what you should be doing now to prepare.
From 1 July, the right to sue for unfair dismissal returns for workers in businesses with fewer than 100 employees.
Peter Vitale, principal of CCI Victoria Legal, says there is an exception for employers with less than 15 employees (for the next 18 months this is defined as less than 15 full time equivalent employees). But even if you have less than 15 employees, when you terminate an employee, you must comply with the Fair Dismissal Code and complete the checklist (you can see it here), which includes giving the employee a warning and the opportunity to respond. Vitale says that if a claim is made against you, the new IR regulator Fair Work Australia will look at the checklist and if it is satisfied all boxes are ticked, you are safe from further claims.
Now that unfair dismissal claims are back, David Reynolds at Chandler McLeod is advising employers to put more effort into recruitment decisions to avoid facing potential claims down the track. Thanks to the downturn, employers usually now have more than one suitably qualified candidate to choose from when filling a position. He says they should be spending more time checking candidates’ cultural and motivational fit with their business before hiring.
“It’s back to basics,” he says. It is important to look closely at your induction processes to make sure new recruits are getting all the tools they need to do their job. And performance management is critical. Job descriptions, key performance indicators and outcomes expected should be well-defined and understood. Managers should be meeting regularly with staff to manage their performance.
If employee management is documented then the documentation is in place if trouble with an employee arises and the proper dismissal processes can be followed.
After 1 July, to make an employee genuinely redundant, employers 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.
Chandler McLoed’s Reynolds says this responsibility to attempt to redeploy a worker before making them redundant means companies need to have a good understanding of the skills and capabilities of employees in every part of their business – and it needs to be documented.
It is a matter of collecting data from employees when they join the business and keeping it up to date. He says there are relatively inexpensive software products available to do this that can be used by employees themselves. It can be a useful tool to for business planning as well. “It’s basic workforce planning but a lot of organisations don’t do it,” he says.
Here lies a ‘sleeper’, says Peter Vitale.
The new Fair Work laws retain general protection provisions for employees. There is a list of things that employers can’t do to employees, which includes dismissing an employee, injuring an employee in their employment or altering an employee’s position to their prejudice, for specific reasons. These reasons include things like the fact that an employee is entitled to a benefit under a workplace agreement.
“These are far reaching provisions,” says Vitale. “The unions have been pretty creative with them.” There are also new provisions in the new laws saying that employers can’t take adverse action against an employee on certain discriminatory grounds. The grounds include race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, religion, pregnancy, political opinion, national extraction or social origin.
The kicker in these laws, Vitale explains, is the reverse onus of proof. Once an employee makes an allegation, the employer must disprove it on the balance of probabilities. “This can put an employer in a very difficult position,” he says.
Vitale’s advice on preparing for these laws is get specific advice if you are planning to change employment conditions and have any doubts, because the legislation has changed substantially and there are a lot of new hurdles.
One of the issues of greatest concern to employers is who represents employees in bargaining with employers. In other words, what rights do unions have to come into the workplace.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
