Adrienne Unkovich

Towards the end of the year the Federal Government’s next wave of workforce reforms will start to roll into place and small business owners should be on alert now.

Indeed, they should prepare themselves for the impact, sooner rather than later. Why?

Current legislation protects employers with less than 100 employees from unfair dismissal claims, however, the proposed changes suggest that very soon this protection will only cover businesses with 15 or less employees.

That means that when the changes occur, small businesses with more than 15 staff will have to abide by the unfair dismissal laws and all indications suggest that business owners will be required to follow a Fair Dismissal Code, which will include a series of new obligations they must meet.

Reinstatement of the dismissed employee will be seen as the primary (and most desirable) remedy, and in cases where it is in the interests of the employee or the employer’s business, compensation may be ordered instead. Given this, it is highly likely that we’ll see an increase in the number of unfair dismissal claims before the employment courts.

Note that micro-businesses with less than 15 employees shouldn’t breathe too great a sigh of relief either, as all indications suggest the government will only offer a 12-month exemption period for new employees in these smaller businesses, and six months for businesses greater than 15.

Time for a spring clean
Given the imminent and significant changes ahead, it is imperative that small business owners make a concerted effort to get their houses in order now, which means a major spring clean even though it’s autumn!

As a starting point to getting things in order, every small business owner should ask themselves four critical questions:
1. Do they have written employment contracts and are they well drafted?
2. Do these contracts comply with current legislation?
3. Are their employment contracts up to date? If an employee’s role or duties change (including promotions), a new contract should be entered into – as contracts go stale.
4. Do they have workplace policies and do these policies make it clear that if and when serious misconduct occurs it will result in dismissal?

Where to start?
• Raise this issue at the next management meeting and ask the four questions! If a management meeting isn’t planned or has never been held, then now is the time to start having regular meetings!
• Give clear responsibility to an individual to commence a spring clean!
• Review all current employee documentation.
• Ensure there is at least a workplace code of conduct in place and it’s clearly communicated to all employees.
• Make sure there are processes and practices in place for managing staff issues, including poor performance and dismissal. All employees need to be aware of these processes.
• Make sure there is a system in place that flags to management that a new employee’s probation period is soon to end – be ahead of this process, not falling behind it!

And finally be prepared…
In deciding whether the dismissal is unfair, the newly-formed body Fair Work Australia (set to be in place from 2010) will have the power to ask questions of all parties involved in a dispute and will seek their views. All indications suggest it will be a far less formal process than the current process in place with the AIRC.

Both parties may have a representative or ‘support person’ present, however, they will still have to directly answer questions put to them by Fair Work Australia.

Given this, it is imperative business owners keep up-to-date file notes about individual employees’ performance issues, actions taken by management to follow due process as outlined by the new Fair Dismissal Code, and the resulting outcome. This kind of paperwork is critically important – and the place everyone turns to – when there is a dispute. Business owners need to put things in writing and make sure the employee in question has a copy of any warning or formal note/report about performance issues. Get those notes in order now!

Adrienne Unkovich is the managing director of Workforce Guardian.
Visit www.workforceguardian.com.au.

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