Employment Law & Unfair Dismissal

Employment Law and Unfair Dismissal needs to be looked at from two points of view. The first – employers and the second – employees. Issues such as remuneration, termination payment, employment policies and human resources management impact everybody in the employment sphere. It is important, whether you are employer or employee, that you make the right decisions throughout your employment whether it be at interview, in contract negotiations to managing performance or termination. In order to achieve the right balance in an employment context it is important that your adviser not only understands employment law but has the necessary skills to cover these issues which are important to you whether they be commercial, industrial or individual.

We are able to assist with the following aspects of employment law:

• Awards and Agreements
• Discrimination Laws
• Employment Contract drafting & advice
• Employment Obligations
• Employment Relationships
• Individual Rights and Obligations
• Occupational Health & Safety
• Risk Management Advice and Strategies
• Termination of Employment
• Unfair Employment Practices

So much of what occurs in the employment field today is essentially linked to either individual contracts of employment or work-place relations tied to collective bargaining on a group basis. This area is one which is delicate and requires balance as it also has a strict legislative regime circumscribed by a number of state or federal Industrial Relations Acts.

Termination, whether lawful or unlawful depends on many issues including procedural fairness and clients need to retain lawyers who will correctly advise them. We have acted for clients who have been unfairly dismissed and have subsequently acted for them after they have started their own businesses.

Work Choices

Work Choices legislation was introduced by the Federal Government and became operative on 27 March 2006.  Its principal aim was to exclude state-based industrial relations systems from dealing with companies with respect to unfair dismissal.  Traditionally state-based systems have dealt with unfair dismissal, constructive dismissal and unlawful termination.  In both New South Wales and Queensland there were provisions which dealt with unfair contracts and under the Federal Workplace Relations Act there was a new section which dealt with subcontractors.  Irrespective, all of this has now changed with the advent of Work Choices which focuses on unfair dismissal and unlawful termination claims by employees of companies with over 100 staff.  The import of this has been to relieve companies with less than 100 employees of unfair dismissal claims whereas it still applies to larger enterprises with more than 100 employees.  Legislation sets a probationary period of six months which can be reduced or extended by agreement.  Where there are genuine operational reasons which lead to termination then an unfair dismissal claim cannot be brought.  Unfair dismissal claims can only be brought where they do not exceed the salary cap or they fit within the statutory exception. 

Alternative Claims

There is a common misconception amongst the public that where a person is dismissed the only right of action they have is under Work Choices legislation.  This is not correct as there are a number of alternative claims which can be brought which include the following:

• Unlawful termination
• Breach of contract
• Trade Practices Act
• Misrepresentation
• Anti-discrimination

In all of these cases you need to obtain informed legal advice as to whether you may be able to pursue any of these alternative claims.  One of the most valuable of these is for breach of contract at common law.

Redundancy/Termination

Work Choices has created tremendous confusion in the mind of the public.  Many people believe they have lost all their pre-existing rights except for what is provided by Work Choices.  This is not the case and there are a number of alternative remedies which are still available which are far more valuable than those prescribed by Work Choices.  One area of confusion is whether or not employees still retain redundancy entitlements.  The simple answer is that entitlements for either redundancy or termination may  remain intact under Work Choices. 

Although at common law there is no general right to severance it has been enshrined in industrial law for a long period of time.  Currently an employee's entitlements in this area are dependant upon a number of factors.  Essentially an employee's entitlement to redundancy pay needs to be traced back to a redundancy provision applicable to that person.  If there is none then there is no entitlement to redundancy or severance.  Where redundancy is not provided for under an industrial instrument the employee has no statutory right to severance pay when redundant unless provided for in the employee's contract of employment. 

Although we hear much under Work Choices about employers which are constitutional corporations with less than or over 100 employees, very little is said about the entitlements of employees involved in small businesses.  That is, businesses with less than 15 employees rather than the more generic category of under 100.  It should be pointed out that the Work Choices scale of redundancy pay for small employers (that is employers with fewer than 15 employers) has been deleted from the list of allowable award matters from 15 December 2005.  That is, these employees have no entitlement to redundancy pay from that date even if it is prescribed in the applicable industrial instrument.  As for everybody else redundancy pay becomes available on termination where an employer has 15 or more employees and an employee is terminated for operational reasons or the employer becomes insolvent. 

Notice

Under Work Choices there have been no changes to the notice of termination requirements.  There is a scale of notice based on years of service and where an employee has provided more than five years continuous service four weeks' notice applies.  Where the employee is more than 45 years of age the employer has to give one week's additional notice where that employee has completed at least two years of continuous service. 

There is no entitlement to notice where an employee is dismissed during the probationary period or for serious misconduct.  Where the employee gives notice the statutory period of notice does not apply.  Notice provisions under awards or agreements still apply under Work Choices.  Employees are still entitled to the required period of notice or payment in lieu.  The notice period cannot be worked out whilst the employee is on annual leave.

There is a growing trend amongst employees not to pay their employees their full entitlements on termination.  This cannot be done unless legislation or the relevant industrial instrument allows this or is otherwise agreed.  Essentially the employee is entitled to the payment of all monies at the time of termination unless specified or agreed.

Contracts of Employment

Closer attention must be paid by all who sign contracts of employment as they can severely circumscribe your rights.  Where you do not receive a letter of appointment, only a letter of appointment or a simple contract of employment, this may be better for the employee.  One reason is that where they do not deal with notice this leaves it open to the courts to imply a term of reasonable notice which may be as much as 12 months depending upon length of service.

Where you have been working for a company for a number of years and at the date of inception of your employment your circumstances were as above and subsequently you are provided with a comprehensive contract of employment to sign, do not, as it may extinguish your common law reasonable notice rights and introduce some very restrictive post employment restraints.  In all such cases obtain informed legal advice before proceeding.

Procedural Considerations

Where you believe you are being performance-managed out of the business do everything within your power to meet the demands of your employer.  Sometimes the more difficult they make it for you the better off you are in terms of bringing a subsequent claim should you be dismissed.  Under no circumstances should you resign your employment unless you have received legal advice to that effect.

Most major companies have an HR department whose task it is to assist management.  It does not matter how well you know the HR director or any HR staff, do not go to them for assistance except on minor matters otherwise it is highly likely to rebound on you.  Where you are invited to a meeting where performance issues are raised do not make any admissions and make sure that you provide properly considered replies before committing yourself. 

Always take notes from commencement to ensure that nothing which is dealt with in that meeting is left out as it may prove to be of fundamental importance at some future time should your services be terminated.  Wherever possible try to maintain the status quo.  If at all possible where circumstances warrant it, have a support person attend any disciplinary meeting with you.  This is essential to avoid misunderstanding particularly where your employer is accompanied by another member of staff to ensure no misunderstanding will arise.

Serious and Wilful Misconduct - Serious Misconduct

Serious and wilful misconduct is sometimes relied upon by employers as a basis for terminating employees.  What constitutes serious and wilful misconduct in any number of enterprises will vary depending on the type of operation and the sensitivity of the information with which the relevant person is dealing.  Where you are dealing with private and confidential information at any time always ensure that it is dealt with appropriately.  Unfortunately much sensitive information is dealt with by email including where a person is put under pressure by his/her employers over performance-related issues.  It behoves everyone who is sending private and confidential information by email to ensure that it is properly sanitised so that it does not become the basis for termination.  Some companies have very restrictive email policies and private email is considered sufficient reason for termination, particularly where it discloses matters about company operations and policies to others e.g. employment/disciplinary policies.

Serious misconduct is misconduct which is measured objectively. All one needs to do is to show that the conduct was intrinsically serious e.g. assault, fraud, theft, breaches of health and safety regulations, intoxication, any breach of confidentiality, disobedience of lawful and reasonable instruction, disrespect in the workplace, matters associated with the operational viability of the employer's enterprise, the use of indiscriminate email and conduct which by its very nature is pregnant with imminent and serious risk.

Contact us now for Fast, Accurate and Timely legal advice

Phone LAC Lawyers on NSW 1300 799 888 or VIC 1300 734 638 or send us an email