Fair Work unfair dismissal claims, the no BS post to employers, including how to spot the bad ones and tips for the good ones.

By Ciaran Strachan.

Recently, I yet again assisted a friend to win in mediation against her former employer that resulted in a reasonable out of court settlement for unfair dismissal.

And yet again, I am seeing the same mistakes made by both the employer, and their representative, not only in preparation for their response but in handling the dismissal in the first instance.

Unfortunately, some of the mistakes I am seeing being made have changed little since 2012, when I first started assisting friends (both employers and employees) with unfair dismissal claims.

So, if you are an employer who gives a shit about your staff (yes you heard me correctly) then please read on. If you are an employer that does not care about your employees and sees them as nothing but an expense on the balance sheet, then depart from here and please keep making mistakes, my bank sends its appreciation in advance.

Here are the tips for those that care about their staff and would like to do all they can to avoid an unfair dismissal claim, or possibly other Fair Work breaches including underpayments.

Tip 1. Prevention. This is rarely spoken about by so-called experts as frankly speaking, most of the big guys who peddle their Fair Work wares work on legal practice models. These models require them to issue billable hours so their aim is to sign and retain you. Subsequently, effective preventative strategies are not in their interest otherwise they cannot maximise their billable hours. Whereas good preventative models are more expensive up front as they want most of the reasons for unfair dismissal claim and other Fair Work breaches (ie, underpayments) to be prevented, so it is not in their interest to see things escalate to mediation, arbitration etc and in turn, maximise those billable hours so a senior partner you never met gets 1/3rd of your money. The other reason many do not focus on prevention is that it is simply not within their capabilities.

Things you need for effective Fair Work non-compliance prevention start with access to two types of Fair Work Specialist who will risk manage Fair Work non-compliance for you. This starts BEFORE you get an unfair dismissal claim, or letter of concern from the FWO etc etc.

The two types of Fair Work risk specialists are:

Expert 1. Remuneration experts, these are only those with payroll experience and potentially, payroll qualifications. Lawyers, HR, Tax agents including accountants and book-keepers are not Fair Work remuneration experts, they know little about payroll systems and how to automate award compliance. This is known as risk redundancy, so you are not ringing one person for their opinion, you are liaising with the front end of a remuneration framework that includes: A remuneration expert (payroll specialist) who regularaly interfaces with a system that has inbuilt fair work compliance/payroll and tax knowledge, that is generally backed up by a Payroll professional body (we are lucky enough to have two in Australia). All of which work as one to reconcile their outputs with the regulator (Fair Work Ombudsman) and Legislator (Fair Work Commission). This is why, frankly speaking, you get inconsistent award advice from other non-payroll specialists, which include some State Chambers and Employer Groups.

Expert 2. Non remuneration Fair Work experts, these are HR (preferably with IR/ER qualifications and Fair Work experience) and dedicated Employment Lawyers (not generic lawyers that have zero quals or units of employment law in their LLB, and do a bit of every type of law). The best experienced and qualified experts IMO, have both an HR degree and IR/ER or EL degree, not just one. HR degrees enable the professional to link workforce management plans (better known to HRM experts as Workforce Capability Plans) to Fair Work mitigaiton strategies. Ie, the WCP focuses on job design to maximise productivity and employee engagement in line with strategic goals, whilst minimising Fair Work-Non compliance risk, much of which is caused by poor job design that increases frustration and in turn, conflict. This is why good Fair Work experts always recommend your employment contract list the duties of the individual and frankly speaking, poor HR Managers or Fair Work experts do the opposite and recommend you keep the duties of the individual blank or vague.

Tip 2. How to implement prevention. A Fair Work risk assessment and in turn, mitigation strategies that PREVENT Fair Work non compliance look like this:

a. A Fair Work specialist (non remuneration) reviews your Code of Conduct, Policies, Procedures and Employment Contracts (usually reconciled to duty statements and awards), Employment classification reviews and anything else that aligns with your risk profile and current industry non compliance trends. If they are qualfied in Strategic HRM, this may also include a review of your workforce capability plan, mental health risk framework and activity (such as reviewing allegations of bullying/harassment), job design including a review of all employee engagement activity and how this is regularaly reviewed, measured and updated, including annual adjustments to duty statements/employment contracts.

b. A Fair Work remuneraiton specialist helps you to select and implement the most appropriate systems including Payroll, ie, if you are on the retail award, any shift rostering or payroll system will leave you wide open to underpayment claims, so it is important to pick one that has inbuilt Fair Work retail award compliance including correct/current shift penalty rates. For those that are not aware, the retail award is the most frequently used award in wage-theft cases, and

c. Outsourcing this risk to the relevant experts (so at least two types of experts, Payroll and Fair Work HR/ER) for setup (Prevention) and ongoing advice including annual reviews. If any of these have not been completed by the relevant Fair Work expert, remember, YOU are managing your Fair Work Risk, not the expert……it is that simple.

Tip 3. What is and isnt a HR Resource. Many owners employ an Operations Manager that “imbeds HR” into their other duties, falsely believing that this satisfies the requirement to allow staff to access HR (as spelt out in 387(g)). However, simply put, this practice is ineffective and arguably non-compliant with the Act unless the Operations Manager has a full time HR background (minimum of 5 years) including a HR/ER or EL qualification. Some employers, State Chambers and Employer Groups can argue all they like that this does tick the box, however, why are you in ADR or arbitration with me then? And the simple answer is that the Operations Manager did not know what they were doing and breached the FWA.

Tip 4. Access to a help line by a Fair Work supplier is not prevention. This at best is early intervention, but my point remains which is that help line's on their own do not prevent anything. An expert is somebody who can de-escalate the situation so that cooler heads prevail. Some State Chambers and Employer Groups will employ people that are incapable of doing this and will only focus on minimising your legal liability, which is completely different. It is important to note that this does not mean you will not dismiss the individual, but rather initiate a process so that all risks, including bullying, harassments, poor job design, management capabilities and many more, are evaluated and tweaked where necessary, so that in addtion to resolving the issue (which may result in dismissal), the cause is addressed so that it does not repeat it self. This in essence is risk management (a form of evidence based continuous improvement). Those that do this properly seldom see a repeat in unfair dismissal claims, while those that do this poorly will keep filling up my bank account on a regular basis, whilst continuing to blame employees and the Fair Work system for their own mistakes.

Tip 5. When to know who to blame, the Employee or Employer. For unfair dismissal, I find too much emphasis by the employer or their representative is placed on the employee being justifiably terminated when, regardless of the reason, the owner simply wanted to get rid of them right there on the spot, hence the failure to follow due process, which rightly comes up frequently in unfair dismissal claims. Due process is there not as a legal hurdle (which unfortunately many labour law groups and state chambers make it out to be) but exists to calm both parties down, talk about the issue at hand and potentially, NOT “fuck up” an employees career unnecessarily. Yes I am swearing here as it has become apparent to me that some employers really do not give a shit about their staff, and do all they can to ensure they never work again which is nothing short of vindictive behaviour. Moreover, many employers mask cultures of bullying and harassment and ironically, I have seen many unfair dismissal claims naming the victim as the bully, and the employer jump to the defence of the actual bully, many of which are managers or supervisors. Other causes of these claims also include: poor managerial oversight and practices in addition to a lack of the aforementioned sufficient HRM/IR and Payroll capabilities. Unfortunately, many employers simply believe it is ok to treat employees as a disposable commodity….”well, that guy was a problem.....lets get the next one in.” So in summary, if followed correctly with the help of an expert, following due process will assist all parties in both calming down, and ensuring the employer does not commit to a path of potential vindictive behaviour.

Tip 6. When you are, and are not, managing Fair Work risk, know the difference. The employers that do legitimately care for their staff will often opt for one of two types of services, these are to outsource, or have in house (if they can afford it) Fair Work qualified and experienced experts in both HR/IR or ER, in addition to qualified and experienced dedicated payroll resources and the same for Safety. Those employers that do not care about their employees, and I have seen these with annual turnovers in excess of 120 mil, and 500 plus staff, will not employ these capabilities either directly or in a contracted capacity. They generally opt for a help line with a State Chamber or Employer Group, along with software containing templates and an “imbedded HR function" in some managerial duty statements. In other words, those that care about thier staff hire or outsource Fair Work and Safety Risk management to the experts, whilst those that do not care manage these risks themselves with limited assistance via software and templates.

Tip 7. How to spot an ASX listed company that does care about its employees and the ones that don't. 

The Good guys. They generally have a CHRO (which should feature on their website and in their annual report) and regularly talk about meeting their Fair Work fiduciary (ethical and legal) responsibilities throughout their annual company report. They measure Fair Work as a risk and even outline and link this to mental health risk management practices which include bullying and harassment. They have in house or as an external resource, an independent Code of Conduct investigator and openly measure and manage employee turnover, in addition to publishing employee data including satisfaction reports and a skills matrix…..basically anything that shows they are actively caring about their employees including employee engagement and measuring the effect that day to day operations and strategic growth has on its workforce. You should see them regularly use the words “Fair Work,” and “ HR or Human Resources” throughout thier annual report.

The Bad and the Ugly. Those that really do not give a shit about their people will not have a CHRO or dedicated HR Manager (depending on their size), and rarely or even completely neglect talking about their Fair Work/HR fiduciary responsibilities throughout their annual company report and on their website. They will not publish any people related data, simply because they are not managing and measuring their people health and well being, or doing anything about bullies, suicides, unfair dismissals, underpayment risk and the list goes on. The more nefarious organisations will spend a lot of money on social sustainability statements and charity. This is reflected in very flashy photo ops and articles on their social media platforms so that they “appear like good people.”

Bonus Tip. Here is how you can quickly check whether the ASX listed company you are interested in does or does not care about its people.

Download the latest 100 to 500 page annual company report. Simply open the report (best done in PDF) and select CTRL F (find shortcut key) then search using the below listed words to see how many times in that company report these terms are used. Start with the usual “profit” and “growth” then move onto “Human Resources,” “Fair Work,” “Mental Health” and “Payroll.” F.Y.I, the last two ASX listed companies who I have won against in ADR on behalf of the employee, both had the usual “we don’t give a shit about our employee traits” and to no surprise, neither had written once in their 100-300 page ASX listed reports……”Fair Work”, “HR,” “Human Resources,” or “Payroll.” Just let that sink in for a moment.

You can throw “safety” in for comparative purposes as this usually appears somewhere due to the 2012 harmonised legislation, but remember, if they are claiming to risk manage safety but failing to measure and manage Fair Work risk, they are potentially in breach of Safety as BOTH acts require you to measure and manage bullying/harassment which under Safety legislation is a psychosocial hazard.

Originally published 08 Oct 2020 here: https://hrsafe.com.au/fair-work-unfair-dismissal-claims-the-no-bs-post-to-employers-including-how-to-spot-the-bad-ones-and-tips-for-the-good-ones/