Impact of Unfair Dismissal Laws on Small Business

In Issue 3 of our Newsletter we reported on the proposed introduction of the Fair Work Bill and new unfair dismissal laws. On the 20th March, 2009 The Federal Government introduced the Fair Work (Transitional and Consequential) Bill 2009 into Parliament. The key elements to commence on 1 July 2009 include the new unfair dismissal scheme, collective bargaining, transfer of business, employee protections and right of entry rules.

A key one for small to medium businesses is the Unfair Dismissal Laws. The current unfair dismissal exemption for businesses with 100 employees or fewer will be abolished. It is critical that small to midsized businesses understand how the definition of small business is to be applied in the new laws.

• Until 1 January 2011, the threshold used to define a small business for the purpose of applying the unfair dismissal arrangements will be businesses with less than 15 Full Time Equivalent employees.
• The number of full time equivalent employees is to be calculated on a straightforward basis by averaging the ordinary hours worked by all employees in the business over the 4 week period immediately prior to the employee’s termination, and dividing that by 38, being ordinary weekly hours.
• From 1 January 2011, the threshold used to define a small business for the purpose of applying the unfair dismissal arrangements will be based on a simple headcount of employees as provided currently in the Fair Work Bill.

 If you have any concerns about the new laws as they apply to your business please contact Your HRmanager on (02) 9415 3561.

Performance Management more Important than Ever

More than ever before, performance management of employees is critical. The new Unfair Dismissal laws require this as well as does the need for businesses to focus sharply on costs and efficiencies in times of economic slowdown; so it’s important to ensure that we have the right employees to do the job.

Performance management issues can be difficult to confront. Many employers are uncomfortable dealing directly with performance issues and would prefer to work around them. This approach can lead to inefficiencies in the way the workplace operates and to eventual unavoidable unpleasantness, when the situation becomes intolerable. It also gets messy and upsets the morale of a business.

Thus, there are  operational imperatives for adopting a best practice to managing employee performance apart from any legal issues involved. After July of this year, the importance of adhering to best practice performance management processes may be heightened by employees’ increased access to unfair dismissal redress. 

There is often a gap in workplaces between what we know and what we do. While most employers have an understanding of what should be best practice in this area, practical implementation is another matter. Read more about a best practice approach on the Your HRmanager website.

Your HRmanager can be contacted for guidance on any situation where employee performance is not meeting expectations. In addition, clients of the Your HRmanager Retained Employer Advisory Service can easily download templates on disciplinary procedures and policies and on the performance review process. Companies that wish to tailor this to their own business, by identifying specific job competencies for key roles, are welcome to contact us for assistance.

The Value of Up to Date Employment Agreements

Current employment agreements ensure clarity in working hours, notification when employees may be absent, notice on termination of employment, established disciplinary procedures and more. In our experience many small to midsized business fail to keep their employment agreements up to date and regret this as soon as something goes wrong with the employment relationship.

For example an up to date employment agreement should outline how you expect employees to notify the business should they feel they are unable to attend work as a result of illness. Whilst text messages are increasingly used to communicate all manner of messages between people this is an area where use of text messaging is inappropriate. A text message provides little understanding of the duration of the absence, what work may remain incomplete or need to be reallocated and specific client commitments due that day.

Clients of Your HRmanager Retained Employer Advisory Service can contact us for guidance on any situation where up dated employment agreements are required. In addition, clients can easily download templates for these documents from the Your HRmanager Online Library.