Firing an employee is sometimes a necessary evil—and a situation most prefer to avoid. But has WorkChoices really made it easier? By Rachel Davis
One of the most unpleasant tasks faced by an employer is firing an employee, and it can be an emotional experience for all. The nature of the restaurant and catering industry, which is driven by its people, can make this a volatile process.
The Workplace Relations Act, WorkChoices, came into effect in March 2006 and was designed to create a simpler national workplace relations system. For most business owners the experience has been a positive one, but there are some areas of confusion.
Each business has a unique culture, and may or may not have formalised procedures. With no document providing a step-by-step guide to termination, understanding your obligations will help safeguard against any legal action by a former employee.
Duncan Thompson, restaurant manager at Woollahra eatery Bills, is responsible for the restaurant’s human resources, including hiring and firing employees. “My systems haven’t really altered since the new legislation came in. I still follow the same procedures we had in place before WorkChoices because they are clear and pretty comprehensive. We have 22 staff at this restaurant so we need to be consistent.”
Thompson’s steps toward termination are precise, and all staff members are made aware of them. “If we have a problem, I first issue a verbal warning, and if the problem persists it is followed up by a first written warning and then a second. If there is no resolution, a third and terminating letter would be issued,” he says.
Thompson aims to treat all staff equally, and the systems they have in place at Bills are there to support that. Thompson explains, “Finding good staff is a time-consuming process, and even though we have a higher profile than most restaurants because of owner Bill Granger, I would rather work with an employee to improve performance than go down the termination route, unless it was absolutely necessary.
“Consistency is the key. Termination is the last port of call, and if the processes are followed and an employee is made aware of the severity of the situation and given the opportunity to improve, it is an uncommon event. No matter what you do though, everyone has a bad apple from time to time, and this is why your processes are so important. I make sure that I have a clearly documented paper trail. I document every single conversation, right down to ‘he-said, I-said’. It is important to make sure that, just in case unpleasantness commences, I have everything clearly laid out.”
WorkChoices has placed some significant restrictions on the nature of lawsuits. It is important to recognise that the new legislation has not freed employers from legal access entirely. Employers with 100 employees or less will be exempt from unfair dismissal laws. However unlawful dismissal is still in place to protect employees against termination based on discriminatory grounds such as gender, race or religion. Claims may also be brought by employees based on common law breach of contract principles, however it is acknowledged that such cases will often be difficult for the employee to prove. For larger employers with more than 100 employees the principles of unfair dismissal remain where they can show that the dismissal was harsh, unjust or unreasonable. However there are several exceptions. Where the employee has been employed for less than 6 months the employee will be precluded from bringing a claim. The other major exception is where there are genuine operational reasons for the dismissal.
For employers with more than 100 employees the key phrase in the new legislation is genuine operational reasons. If you can prove that you have terminated employment with this in mind, the laws are on your side.The phrase is defined and includes matters of an economic, technological, structual or similar nature in relation to an employers business or undertaking. The term has been the subject of some debate in the Courts over the past 12 months. Whilst there is no once-size-fits-all description, the Courts have recognised that the dismissal must not be a sham to avoid the dismissal laws nor is it an operational reason simply because the employers says it is. The onus is on the employer to establish that the dismissal was for genuine operational reasons.
Unfair dismissal may have been abolished for smaller employers, but unlawful dismissal is still in place to protect employees against termination based on discriminatory grounds, such as gender, race or religion. Your HR processes are there to protect you against any accusations of unlawful dismissal, and they must be clear and well documented to stand up in court.
Mark Wilde, based in Sydney, is head of employee relations-legal at AMP, and believes that many employers in the restaurant and catering industry should find avoiding legal problems easier under the WorkChoices system. “The best insurance an employer has is to make sure that the process used to manage employee performance and termination is clear and well constructed, and that the actual decision to terminate employment was fair. Give appropriate warnings to the employee in question, give clear guidance to them about their performance and how they can improve it and also give them the opportunity to improve and explain their behaviour.”
Wilde believes inconsistent behaviour is often the biggest pitfall for employers. “Terminating employment is hard on both parties because most people generally shy away from conflict. Employers often make the mistake of avoiding an issue until it has gone too far and they need to terminate. This can lead to inconsistencies in their procedures, leaving them open to potential problems.
“Whilst there is no rule that three written warnings will protect you against any legal comeback, it does show your process and creates consistency. Keep records of what warnings you gave and give a copy to the employee. Even if there is a question of illegal conduct, such as theft, you need to prove that your decision to fire the employee was sound in judgment.
“Unfortunately, a confrontation is unavoidable; you can’t make decisions without hearing their side of the story. You would also need to launch an investigation and provide evidence of their offence.”
To avoid potential legal problems, any dismissal should be in context. Wilde explains, “Each workplace has its own culture and a spectrum of reasonable behaviour. For example, in my own profession not following OH&S would not be a sackable offence, but in a restaurant kitchen it may be a different matter. Fighting in the workplace is not permissible in most companies, but is it a sackable offence in yours?
“Consistent lateness—again, each business has its own rules: how late is late enough? Make sure your employees are well versed in the policies of your business, and make sure they understand the expected standard of conduct before there are any problems. As an employer, it’s your job to convince the courts that your process and judgment were clearly laid out and fair,” states Wilde.
Award-winning Glebe restaurant, Atelier, is a small operation owned and managed by husband and wife team Bernadette and Darren Templeman. With a staff of only five, they have found the key to avoiding legal wrangling has been an on-going discourse with their staff. Bernadette explains, “We don’t have any formal written procedures. We deal with staffing issues as they arise; we work together closely and need to be able to look at each other in the face. We try to end working relationships mutually, more a ‘time to move on’ attitude than anything confrontational.”
This approach has worked well for the Templemans over the last four years, but as Bernadette prepares to take a back seat in the business and employ a manager, they are beginning to formalise procedures. “I’m compiling a procedures manual because a manager won’t have the same vested interest that we do; our staff are loyal to us because we are loyal to our business. We avoid problems because we have a small staff and are very clear and patient with them,” she says. “I try hard to never take anything personally, and take the view that sometimes our environment doesn’t suit a person and communicate that reasonably and clearly.”
Darren explains, “Because we are a small operation and we know each other so well, we adapt to each problem as it occurs. Sometimes it’s better to send a person home and then meet again in the morning when all have calmed down and everyone is thinking with a clear head.”
With no national document setting out procedures, each business has to define and communicate its own. Having clear policies and procedures that your employees understand is the first step.
Secondly, be consistent towards all employees—you can’t fire one person for the same offence that a colleague was given only a verbal warning for. Give employees the opportunity to defend their actions and improve their behaviour.
Lastly, create a detailed paper trail that clearly documents everything you have done to try and avoid terminating the employee, or that shows the investigation you have implemented.
Consistent procedures and sound reasoning is your best safeguard against litigation, and should protect you in the eyes of the law.