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Human resource specialists manage people within the employer-employee relationship. The law of the land governs the boundaries of that relationship. It is therefore essential for human resource managers to have a basic understanding of the law of employment. In any legal relationship, there are mutual duties and obligations. The employment arena is no exception. Employers have obligations to their employees and, in turn, employees have certain duties regarding their employers. When these mutual duties integrate successfully with the objectives of the organisation, then the productivity of the enterprise will improve.


There are several sources of legal obligations which interact to form the law of employment. These are contract, statute, awards and the common law.

In most situations of employment, a contract will exist between the employer and employee. This can be either: ) (a) formal: a written document signt>.dby both parties (b) informal: an oral agreement. Usually the court will infer the existence of a con.. tract from when work commences. In drafting contracts, employers often fail to consider terms other than remuneration and hours of work. This means that other important terms in the contract are missing. At best, these terms can be determined by a court. But this takes time and money. By stating precise terms and conditions at the outset, human resource managers can avoid the costly process of seeking a court's adjudication on the terms of the contract.


Advantages of a written contract
In general, there are many advantages to having a written contract of employment. It removes any doubts which the new employee may have as to his or her obligations and duties. Surprisingly enough, parameters of the job are one of the major areas of dispute between the parties in an employment relationship. Often the comment is made, 'I did not think that that was part of my job description'. Drafting a written contract has the added benefit of forcing the parties to consider which terms they require in the contract. This means that the parties select the terms which govern their relationship rather than allowing'the common law and industrial tribunals to imply terms which the parties may not desire. Employment contracts are not works of art. They are inexpensive to draft and, ultimately, save a lot of time and money. However, conflict may arise if the terms of a contract are uncertain. Strikes are obviously expensive and so are disgruntled ex-employees, both in terms of public relations and potential litigation. The more astute human resource manager, ever concerned with the prospects of unnecessary litigation, should take the initiative by having all senior executives enter into contracts of employment. A well-planned, well-drafted contract of





Racial Discrimination Act 1975.. and procedures I d /. hr Awards3 Awards are the primary source of employment obligations for most Australian employees.. ' .1 illustrates how a written contract provides for the essential aspects of the employment relationship. I -"'"I }fe d }bf Salary/wages I r I ~ I \"1 Overtime I SuperannuationI Figure 14. of es of . fd. An employer may provide f!1ore favourable terms than those provided by the relevant award. ~t. Award conditions include minimum pay. This explains why human resource managers need to be aware of all awards relevant to their organisation.4 Employees should be informed of which award is applicable to their work and where they can inspect a copy of it. Promotionpolicy and procedures . The relevant Commonwealth acts are the Sex Discrimination Act 1983.'" - .~n. Copies of awards and information on them may be obtained from state and federal departments of industrial relations.JIf.2 . ~ ISI . ..foimatlon ~ a . .:II ~ I employment ensures that the employment relationship commences on the appropriate footing....-&. Figure 14. I Hours I I Supervision ~ I )f ~ .I .CHAPTER /4 Human resource management and the law 391 / ~ . types of leave and the regulation of employment termination. '-" t / Benefits 1 WorklocationI . ' . hours of work. The Commonwealth has legislated to protect equal opportunity.. Affirmative Action (Equal Employment Opportunity for Women) Act 1986 and the Human Rights Commission Act 1981.1: Essential terms of employment contracts Statute State and territory governments have legislated to prescribe minimum conditions of employment which apply notwithstanding any express provision in the contract. they specify minimum terms and conditions of employment. Created by federal and state industrial tribunals. .- ESSENTIAL TERMS OF EMPLOYMENT CONTRACTS ---a DISClpme po IICY I . ConfId e~tla1 .

Clearly. The main common law duties are set out in table 14. \.tn c:w. a duty to account for and protect the employer's property. The common law is also a separate source of legal duties and obligations itself. even for employees who are not union members. of discoveries or inventions developed by employees during the course of their employment must be given to the employer.wurce. an employer cannot include terms of employment less favourable than the award.1: General duties of parties to an employment relationship Employer's employees duties and obligations to Employee's employers duties and obligations to ~ Fil E To pay employees wages and reasonable expenses incurred in the course of the employment To provide work in the circumstances where payment is directly tied to performance To take reasonable care for the health and safety of the employees To indemnify an employee for losses incurred by the employer while performing duties under the Contract Employment A duty to work in a skilful and competent manner A duty to obey the employer's lawful demands A duty to provide faithful service. . Further.t either in a general court of law or before a specialised tribunal.~ \ Mechanisms for enforcing a\\'ard obhgath'I1' I:.~ . Legal sanction is almost invariably limited to imposing a relatively small penalty. [ / . however. The legislation requires only that the following three minimum conditions of employment be met: a minimum of one week of sick leave on full pay per year a maximum of forty hours per week. averaged over fifty-two weeks.392 r PART SIX Mant/KinK hUll/an re. the benefit. It is the body of previous judgements which guide how we should interpret the other sources of legal obligations. an award can be overruled if an enterprise agreement is in place. which includes a prohibition on disclosing confidential information. as ordinary hours of employment an hourly rate of pay for ordinary time that is not less than that which would apply under an award or former industrial agreement. This should be explained to the person at the interview stage. Table 14. In New South Wales.1..5 Employees may also take action to recover unpaid wages or other sums due to them under an award. ~ Common law The common law is 'case law' which has developed in the court system. . This means that where an award exists.6 I'J': . and a duty to give complete attention to performing the work. the general duties of the parties to an employment relationship are prescribed by the common law. of - . if an appropriate industrial award governs the conditions of employment then there will be some constraints on the employer's' contractual freedom. A contract of employment is a prerequisite to enforcing an award obligation between employer and employee.~ " ". Thus.

[ . the general duties of the parties to an employment relationship are prescribed by the common law. averaged over fifty-two weeks.~ Mechanisms for enforcing award obhgatl"II' I:an C~I!\t either in a general court of law or before a specialised tribunal. a duty to account for and protect the employer's property. The common law is also a separate source of legal duties and obligations itself. even for employees who are not union members. an employer cannot include terms of employment less favourable than the award. a minimum of one week of sick leave on full pay per year apply under an award or former industrial agreement. an hourly rate of pay for ordinary time that is not less than that which would Common law The common law is 'case law' which has developed in the court system. Thus. This should be explained to the person at the interview stage. A contract of employment is a prerequisite to enforcing an award obligation between employer and employee. It is the body of previous judgements which guide how we should interpret the other sources of legal obligations.j iil. The main common law duties are set out intable 14. Table 14.392 PART SIX ManaKinK hUll/ail re. if an appropriate industrial award governs the conditions of employment then there will be some constraints on the employer's' contractual freedom. " \. Further. and a duty to give complete attention to performing the work.~ :. which includes a prohibition on disclosing confidential information.~ . Clearly. the benefit. . In New South Wales. as ordinary hours of employment .5 Employees may also take action to recover unpaid wages or other sums due to them under an award. Legal sanction is almost invariably limited to imposing a relatively small penalty.1. This means that where an award exists. of discoveries or inventions developed by employees during the course of their employment must be given to the employer.. however.f .1: General duties of parties to an employment relationship Employer's employees duties and obligations to Employee's employers duties and obligations to ~ ~ Fil E To pay employees wages and reasonable expenses incurred in the course of the employment To provide work in the circumstances where payment is directly tied to performance To take reasonable care for the health and safety of the employees To indemnify an employee for losses incurred by the employer while performing duties under the Contract of Employment A duty to work in a skilful and competent manner A duty to obey the employer's lawful demands A duty to provide faithful service.6 . The legislation requires only that the following three minimum conditions of employment be met: / ~ .wurCt'. an award can be overruled if an enterprise agreement is in place. I . a maximum of forty hours per week.

2. <II (1) . marital status or pregnancy.1.C3 2. (Enforcement) set aside) set aside) I~m" t Industrial N Industrial Court NSW Supreme Court I\. I ~ .~"'. colour or national or ethnic origin. privacy guidelines .g.r. Now. ::>::> 0 0 ~ 3 00 m Figure 14. 3 I» <g ~I» ==:<0 "6. However. legal obligations and duties which existed during the recruitment or pre-employment phase.? 71 CHAPTER 14 HI/man resol/rce management and the law 393 The employment relationship NSW Industrial Relations Commission t t It NSW Supreme Court NSW Industrial Courtor LocalCourt :II (1) a /.7 The former makes it unlawful for an employer to discriminate on the basis of race. The primary reason for their importance is a result of the anti-discrimination and related legislation enacted federally and in most Australian states during the late 1970s and early 1980s. " I» C 1'4. c I» 3 J/' ~~ ~m ~C) ~ii! C I» 3 JI" "tJ ~ o. the last decade has seen the rapid growth and development of comprehensive legislative and judicial intervention into the arrangements for employing people.m s:~ 0(. () 0 "0 (1) ::> <II 3 5.) ~ii! <i)'co ~o ~ :<: ~ ~ ~ I» ~cg ~ :<: ~ '<.C/) cg"O -"i ~ I» iir i!l ~:J~ o. occupational health and safety. The latter makes it unlawful to discriminate on the basis of sex. 0 .2. (Variation. o. 3 a ::> <II 0000 § ~ o. the application form . in the pre-employment phase. superannuation . rongful w dismissal) I Federal I JI' Unfaircontract (section 75of 2 NSWIndustrial Relations Act) Industrial Industrial Relations Relations Courtof Commission Commission Australia (Variation. JI~" ID 0m -< .2: Aspects of the employment relationship at federal and state levels EMPLOYEE ECRUITMENT ND SELECTION R A Generally. if any. the following areas require consideration: the job advertisement . the interview . . a "tJ + I l ContractI Breach (e.:. the job description . The main federal legislation is the Racial Discrimination Act 1975 and the Sex Discrimination Act 1984. Co 3~ 03 ::>ID I» (1)::> ii! ~ Q. ::> Sa. -. less than 20 years ago there were few.

pecuniary loss. however. These included: 'Are you planning on having children?' 'Are you on the Pill?' 'If you are pregnant would you have a termination or would you keep the baby?' 'Do you have sex with your boyfriend? In what positions?' At first. The case involved a medical practitioner who employed three receptionists over the years for his private practice. . Indirect discrimination involves practices which appear to be inoffen.. and occurs where a person or group is treated less favourably than another person or group would be treated in similar circumstances. . pregnan~y. Tasmania and Queensland are soon to introduce similar legislation. It can be direct or indirect. Damages ." . Hall and Ors v..: :I I ! I' ' j ~ I l' 1:1" .1. . At the interview. This disadvantages women who often take time off to have children.~ .Table 14.\'. It covers discrimination on the basis of sex. Direct discrimination is the most obvious form. I '1j ."-I'f! i~(.t r t' 394 PART SIX Managing human resources \' .8 This case concerned an extreme example of sexual harassment by an employer in the pre-employment phase.:~q. Discrimination involves making a distinction between individuals or groups so as to disadvantage some and advantage others.2: Direct discrimination versus indirect discrimination Definition Direct discrimination Treating a person or group less favourably than another person or group in similar circumstances A practice which appears inoffensive but which produces a result in which a person or group is disadvantaged Example An employer dismisses a female purely on the basis of her gender Remedy Damages . marital status. 1 Table 14.~~ ~J~ ~. sexuality. On appeal. this .. he asked questions which were' quite personal and intrusive. loss of career prospects. physical and intellectual impairment..iiiJ.2contrasts the two forms of discrimination. '. the Court found that these questions did not amount to sexual harassment because the receptionists were not actually disadvantaged by the manner in which the doctor conducted the interview. stress. humiliation The following are examples of decisions concerning discrimination in the preemployment phase. entitled Anti-Discrimination Act (New South Wales) or Equal Opportunity Act (Victoria. South Australia and Western Australia). tt. Sheiban Pty Ltd & Anor. Indirect discrimination A company makes promotion dependent. . upon five years' continuous service. ~: sive but which result in a person or group being disadvantaged.p.: ~i' :: ~ ill.' 1 f I~ i ! ! i" i State legislation. .pecuniary loss. race and age. hurt and humiliation I . " It' (! . and it also prohibits sexual harassment.. prohibits discrimination on broader grounds than those covered by the federal legislation. hurt. It illustrates the types of problems that an employer can create if the preemployment interview is conducted in an unthinking manner.

Human Rights Commission v.c. or could not reasonably be understood to indicate. . was influenced to answer questions they would have found intrusive. . The test for discrimination was the same as the test under the New South Wales Act and the federal Act. the employer had treated him less favourably than someone who did not have a stiff back. the plaintiff was offered the position of purchasing officer with a company on the condition that he undergo a medical examination. CHAPTER /4 Human resource management and the law 395 decision was overturned. O'Neill v. arms.tO This New Zealand decision concerned discrimination in a job advertisement. anxious to obtain the job of receptionist. The employer owned a service station and advertised for a 'keen Christian person aged 16-18 who was not afraid of work' to apply for the position of service station attendant.lt.. The Acts make it clear that an employer need not actually do anything -~~ .+ '5. The advertisement was held by the court to indicate an intention to either employ or give preference to Christians. decisions regarding dismissal. transfer and training opportunities . be made on the basis of an applicant's religious beliefs. as evidenced by the advertisement. Burton Cables Pty Ltd.. the term and conditions of employment The job advertisement . legs and shoulders which was apparently caused by exertions from gardening.>. the wayin whichthe interviewis conducted . The Full Federal Court found that the questions were tasteless and unnecessary and gave the receptionists reasonable grounds for believing that they would suffer an employment disadvantage by not answering the questions. . promotion opportunities . The man was informed of this fact when he arrived at work the day after his medical examination. namely whether the advertisement could reasonably be understood as indicating an intention to commit a breach of the Act. .' (. "". that any employer would seek in a prospective employee. including: l \'1 . howhiringdecisionsare made .. It was important that each of the applicants. .-. He agreed to this. The Tribunal found that decisions to refuse employment would. an intention to do an act that is made discriminatory under any of the legislation. The doctor advised the employer that the man had an acute back condition which made him unfit to commence work./ . Back stiffness was an impairmeI. Discrimination legislation affects every stage of HRM. The Equal Opportunity Tribunal rejected an argument that the term 'Christian' was intended to denote qualities. Eric Sides Motor Company Limited.) ~. During the examination the doctor became aware of a stiffness in the man's back. the wayin whichthejob is advertised . By refusing to employ the applicant. such as honesty and trustworthiness. "... The court found that the failure to employ the plaintiff was discriminatory behaviour under the Equal Opportunity Act 1984.9 In this Victorian case. Human resource managers must be careful in publicising a job vacancy that the advertisement does not indicate.~ . '. but it did not render the man unable to carry out the duties of purchasing officer.

<i-> .. it is extremely illadvised to ask questions about an applicant's family responsibilities. /'~ :t:i~. . Such questions are only relevant to an applicant's willingness to relocate. rr ..~ :~ r ' . Similarly. Age Age is one of the first questions on any application form. I HR specialists should be careful to operate within the legislative requirements. The successful HR manager will consider on each occasion the employer's present and future expectations of the employee performing the job being described. For example. When this occurs. f.~. I. This job description should generally be made available at the interview.... I ~I 396 PART SIX Managing human resources discriminatory.. In this case. Such questions may lead an applicant to allege that the failure to employ him or her was motivated by discriminatory considerations.}~. .= . -= ~ / . f I I i i. The only real relevance of such questions may be to trace a person's employment history. In these instances. The legislation is specifically concerned with an indication. Care should be taken in preparing a job description not to reuse old versions (which may be out of date) or reproduce samples from other organisations (which may be inappropriate). i ! I . any hint of discrimination at the recruitment stage may be used later. '1 i . or terminology within an advertisement that could reasonably be understood as an indication of an intention to contravene the legal provisions.' "'~t " I . Marital status/family life Commonwealth anti-discrimination legislation makes it quite clear that questions concerning marital status should not be asked. the question that could be asked is whether the applicant has been employed under another name. advertising for a Christi~n teacher is discriminatory. Aside from the bad public relations. ' 1 j I I . this being the age at which a person can enter into employment. the only allowable question will be whether the prospective employee is under sixteen years of age.&' .. Two groups of people are caught . The following areas should be given consideration. "~ ' .~ .' ' . work overtime or travel."'- .1 ~"f II I II. " i."'..' Similarly. for example. . it is important to prepare a concise job description. ". the appropriate question should be phrased in terms of the applicant's ability to meet such commitments. recent developments suggest that questions concerning age soon may be outlawed nationwide. :11 I Ii 1" JI '/ . Iii.l . an advertisement that includes such phrases as 'housewife preferred' or 'seeking an office-boy' would offend the provisions. " Application forms In framing the terms of an application form.the employer who causes the advertisement to be published and the publisher. HR managers and other interviewers must be aware that certain questions may not be asked either during an interview or on an application form. Although age discrimination is not presently prohibited in all jurisdictions. 1." Even though the fine imposed may not be great. 't. by a disgruntled employee alleging discrimination in an unfair dismissal action..W The job description To avoid later accusations of discrimination..: ' .. or complaints that and employee's duties are not part of his or her role.

Criminal convictions It is quite common for application forms to contain questions regarding criminal convictions. .. Workers' compensation history Particularly where a position involves manual dexterity. It is also necessary to consider whether the interview should be conducted on a one-to-one basis. Failure by the interviewer to be aware of discrimination legislation in particular. It is unlikely that such questions will ever fall within the framework of discrimination legislation. Furthermore.. ~ s b e s h n b ' i I . (' - -- - --- . Also consult the applicant before contacting previous employers or checking academic qualifications. Later. CHAPTER /4 Hutnan resourc. . the applicant may be required to undergo a medical examination or produce a recent medical certificate.. red or green?' If the selection criteria include the ability to perform tasks which clearly require certain physical attributes. It L- I:~"". . details of an applicant's workers' compensation history may be relevant to the prudent HR manager. Such questions are not considered discriminatory on the basis of physical or mentaJ impairments. In this case. Therefore.. to determine the amount of premiums to be paid). a prudent HR . Such questions may also be required by a workers' compensation insurer (for example. Apart from affording the organisation the benefit of a second opinion.J :> 1 t The interview An interviewer should not conduct an employment interview without careful planning and forethought. in the interview.for example. f'ft t.. The interview and the process surrounding it are easier if based on objectivity and a readycompiled job description. The wording should tie the question to the applicant's ability to perform the required duties . .stions regarding physical and mental capacity are proscribed by most state legislation. the applicant's permission should be sought. such as wet or humid environments?' or 'Can you distinguish between different colours and accurately identify whether a particular electric wire is. .~j~ .-J J91 .such questions are unnecessary unless it can be demonstrated that a particular physical or mental attribute is required. Such physical requirements should be described in the job advertisement.~~. References and previous employment The application form will usually provide for the applicant to nominate referees. questions should be carefully worded so as to avoid contravening the legislation (and offending the person going for the job!). because they relate to the person's capacity to perform work. ~y. s. Generally..I . In contacting any person not nominated as a referee. a second interviewer may represent an important back-up if an applicant later accuses the employer of discrimination. This includes questioning past and currently pending claims. nlcIlOClJl:"""'''' II/ww. the applicant may be asked why he or she left a previous position of employment.'Can you work under certain conditions. for instance. Physical and mental capacity Qu(.. any employer will want to avoid compounding the risk created by a workers' compensation problem. could lead to court and tribunal intervention..~? 11>:11 :f' J.

HR managers must provide all the necessary information. When hiring employees.the Commonwealth Government have introduced legislation obliging employers to be responsible for occupational health and safety. Where there is only one interviewer. training and supervision for employees to perform their work. comprehensive notes should be made of the interview so that there is an up-to-date record available in the event of any legal challenge.~:' It. storage and transport of plant equipment and substances . more recently. :' . The duty of the employer also extends to: .. and those who are injured at work should be fairly and sufficiently compensated..! . "' " ': :: " 1 " ' ~ . \. r~~~ ~ r i. it has been compulsory for all employers to provide superannuation for their employees.:' ' >. ". . so far as is practical. The legislation also deals with compensation schemes for injured workers. ' . Safety standards set out in the Regulations to the Occupational Health and Safety Acts aim at preventing injuries. instruction. i " Occupational health and safety requirements All state governments and.II ~'" . maintaining the workplace in a condition that is safe and without risks to health . After completing the interview or the process of culling written applications.. ' . i I ! Ii I' I " p I I . a working environment which is safe and without risks to the employee's health.. providing and maintaining plant and systems of work that are safe and without risks to health . note-taking becomes more difficult. making arrangements for safety in connection with the use..~ .. r "I 398 PART SIX Managing human resources 't'. I. i'F .. . either destroy or return (on request) the forms of unsucqessful applicants. ~. It! 1. It is not even qualified by the usual words. A useful approach is to comment on a' printed sheet containing space for' each selection criterion. employees should be aware that they cannot be compensated for injuries received whilst performing work outside their job requirements. In New South Wales. -- . handling." " ' f "I . ". '.. i' i.1 Terms and conditionsof employment Superannuation Since 1 July 1992. " 1 . under a federal legislative package. . ' I I I " t P. an employer must provide and maintain. Basically.'l~ t. ''': . In all cases. I J t r . . manager should conduct the interview with another person from the organisation. Employees should not be exposed to unacceptable levels of hazard at work.13 The purpose of the legislation is to balance the inevitable health and safety risks associated with industry against social justice issues.l~ ~.\. The duty is an absolute obligation. providing adequate facilities for the welfare of employees at the workplace. : I 1. I I~ ~ I :~I ' d'. .i II Every employer shall ensure the health and safety and welfare at work of all employees. ' S'r ""' 't .I lif"'" II'l. 'so far as is reasonably practicable'! On the other hand. ! . i ~\1i 'L'" . .12 <:. i ' 1 '." : ~' J "I " . " . ~ I~t:'tt. I . I I " ' \' .'~.r .' ". "1 j I !W. """0. -= ~ :~.." r "I ". .. . Employers (if their payroll exceeds $500000) are required to contribute either 3 per cent or 5 per cent of the employee's ordinary time earnings.1 '\1 : ~~br . t.' . 1\. the legislation also creates a general duty on employers: :~~'I:' ..

(which may be oral or written and contain either express or implied terms). ~- iL .. an employee may resign from a position and refuse to accept an alternative position. However. Consideration should be given to the following facts: . changes to the work location or to duties).oa. It is mandatory that employers give employees the opportunity to Jefead themselves against allegation of misconduct. This is known as 'constructive dismissal'. usually because he or she disagrees with the employer's changes to the contract of employment (for example. This involves understanding how the four sources of employment law (see page 390) interact (see 'Procedures for dismissal'). Dismissal based on an employee's serious breach of the contract demonstrating an intention not to be bound by its terms. Employers must comply with provisions and provide employees an opportunity to defend themselves against allegations related to conduct or performance. the consent may not be freely reached. As discussed above. this is no consent.. Although the employment relationship is contractual in essence. However. Breach of these duties may constitute grounds for dismissal. However. management of the business. In the case of constructive dismissal. This is known as dismissal 'on notice'. . \. if not granted the opportunity then there must be proper grounds for not providing this opportunity.. includes a number of duties to which employees are bound.' 'ill . '. the employee has the same rights as if he or she had been dismissed.( ~~. 3.. This is known as 'summary dismissar. and the right to dismiss does not arise automatically upon an employee's breach of contract. Even if contract changes are agreed to by the employee.If/" J99 TERMINATING EMPLOYEES Dismissals invariably fall into one of three broad categories: 1. any contractual right to dismiss must be translated into an ability to dismiss. This is called redundancy or retrenchment. Dismissal based on the employer's commercial or economic decisions regarding the. Otherwise termination may be deemed to be harsh or unjust. 2. Effectively. the employment relationship is not only governed by the law of contract. These new provisions have fundamentally changed the law regarding the termination of employment for employees covered by federal award and for non-covered employees. the contract of employment. yet the employee is treated as if he or she had been dismissed. Dismissal pursuant to the express or implied terms of the employment contract whereby an employer is entitled to terminate the contract by providing reasonable notice or payment in lieu. An example is where the employer decides that a worker's performance is simply no longer satisfactory.. It occurs when an employee is effectively forced to resign.( r .CHAPTER /4 Human resource management urtJ flu. every dismissed employee has the right to contest the termination of his or her employment contract in c()urt. An example is where an employee repeatedly turns up for work intoxicated. the contract of employment is terminated." Procedures dismissal for Significant changes were introduced pursuant to the Industrial Relations Act 1993 which came into operation on 30 March 1994. Sometimes.::.. Wherever dismissal occurs.

a mother. termination can take place. . ~. . p..' .. / .J "-. misconduct . '. =-L-- .. r "No one sees that I'm a wife. ii . Even where the award or agreement is not explicit on the matter. . . Sharon Bagnall told an Ontario Court judge that she was humIliated by the The Canadian subsidiary of the American-based firm maintained Ms Bagnall's odour created a persistent problem for other employees...' ~i '. If unsatisfactory work continues. ). When terminating an employee for unsatisfactory performance the employee must be warned accordingly and allowed a reasonable amount of time to improve.~ I. dishonesty. .. .l 400 PART SIX Managing human resources . This is to ensure clarity and avoid confusion. 12. (Source: Agence France-Presse. disobedience . termination will be deemed unfair. thati!vhavealife. 8 . Most awards and industrial' agreements preserve the employer's right to dismiss without notice in response to behaviour such as misconduct. neglect and insubordination..) Notice of dismissal Employers may not terminate employment unless they have given the employee sufficient notice.. V The right to dismiss summarily is a powerful tool that may have a drastic effect vr on the lives and livelihoodsof those dismissed. The following are grounds which most commonly arise: . ". The worker should be notified in writing of the decision to terminate employment and should be entitled to recover.occasion~ere~. common law duties of obedience.~ - --~- ... cited in South Chi= Morning Post. fidelity and care are implied in the employment contract. a statement of reasons for the dismissal.. '. on request. ThereforeLthecourts have restricted .. Breach of these duties may provide sufficient reason for summary dismissal. Humiliation TORONTO: A woman in Canada who lost her job as a perfume demonstrator because of alleged body odour told a court hearing in her wrongful dismissal lawsuit that the incident made people see her as "this smelly person" claim April 1991~ismissal by Calvin Klein cosmetics. 1j :. ! t '~.{ J~ .. incompetence .. tj1~}ighUo. physical and verbal abuse \1"1V" i i t Ii .it '-.. drunkenness . Otherwise compensation must be paid..ee-conducLorJ1llimded conduct is in direct and serious oppposition to the employee's obligations. NEYYSBREAK.. 15 May 1994. .. . ... ." she told Judge Lee Ferrier. . neglect of duties dishonestylbribery criminal behaviour absenteeism. If employers do not abide by these regulations and terminate employment for any of the above reasons described.

colour.n I " Figure 14. age . the employee is on authorised leave . How much notice is given depends on the employee's continuous service with the employer (see figure 14.rs.. J - . The following categories of employees are exempted from the unlawful termination of employment provisions: employees engaged under contract of employment for a specified period of time . pregnancy. the new provisions have added other new discriminatory grounds prudent to unfair dismissal. " tl. the employee has complied with the requirement set out in sub-regulation30D(5) and obtains a medical certificate of absence stating illness and the duration of absence from work as temporary.3 ~. 3 weeks. Where an employee is absent from work because of illness or injury it will be regarded as temporary absence if one of the following applies: .' Not more than. misconduct of a kind whereby it would be deemed unreasonable to require the employer to continue the employment during the notice period. That is. religion.: . e 'e ! f. family responsibilities. These are: " . a year I. union membership or participation in union activities. i. marital status. political opinion. national extraction and social origin.wlth . This includes areas already covered in most federal awards following the Termination Change and Redundancy Case. In addition. the employee complied with the terms of an award or court order to notify the employer of any absence and to give a reason . 1984.I 'e CHAPTER 14 Human resource management and the law 401 Notice is not required if the employee is guilty of serious misconduct. . casual employees hired for a short period of time. 4 weeks. Apart from race. physical or mental disability. sex. More than a y~~rbut not mbre l~an 3 years. Employer's contll"Juous servlce. More than 5 yea. W' '~ . Other relevant factors in determining unfair dismissal Employers are prohibited from terminating an employee's employment for reasons set out in SM170DF(1). an employer is prohibited from terminating an employee's employment because of temporary absence from work due to illness or an accident. More'than'3 years'but not more lhan 5 years.' employer Period of notice At At At At least least least least one week. sexual preference . employees serving a period of probation or a qualifying period of employment . 2 weeks.3): .

then no damages will be awarded.-- -=- -~ . Usually.~ I I ' I .""r'''. It is significant that compensation is not defined and there is no upper limit on amount or other limits on the application.. the court may make orders to put the employee in the same position as if the employment had not been terminated.1 . requiring the employer to reinstate the employee . Under new changes to the federal Act.1 '. . ! .-".402 PAIU \/\ ". Advice should be sought immediately. Damages awarded under the new legislation may well be larger than previous awards at common law. If an employer unlawfully terminates someone's employment. I j i i I I . !!!!!!oS ~. The court has outlined detailed criteria required in applications in respect of unlawful termination. . Unfair dismissal A dismissal may not be 'wrongful'. An employee has a duty to mitigate the loss and attempt to arrange alternative employment. declaring the terminating to have contravened the provisions of the Act ~. he or she has various means of appeal. Whether unfair dismissal will be determined by objective or subjective standards is yet to be determined. This would be the case where the employer gives full lawful notice or pay in lieu.. ". an employee may make a wrongful dismissal claim. The most important ones are: a statutory action for unfair dismissal a common law action for wrongful dismissal a statutory action under section 275 of the Industrial Relations Act 1991. .. employees will be able to seek redress for unfair dismissal in the Australian Industrial Relations Court... Table 14. If a contravention of the termination provision has taken place.. 'i I.~ ~:. It requires the employer to submit a detailed statement as a response.. -I * i~: ' "' ' . but there is no misconduct which warrants the dismissal. . Failure to do so could have irrevocable damage on hislher defence. If settlement cannot be achieved. but is nevertheless 'unfair'. the employer may face a claim for compensation and reinstatement. Wrongful dismissal Where an employer makes a fundamental breach of the employment contract. If he or she secures a new job which provides equal or better remuneration. .3 compares unfair dismissal with wrongful dismissal. the court may impose a penalty of no more than $1000. . ordering compensation.I I' . Rightsof the employee Where an employee has been dismissed. the dismissed employee can claim damages for wages lost due to a short dismissal period. An employer is served with an application in respect of unfair dismissal.'urCt'I Remediesfor unfair dismissal ! i} i . iW . Court orders may include: . For example. termination on insufficient notice constitutes a wrongful dismissal..14 . .

The State president of the AMEU in Queensland. But according to the head of the Australian Chamber of Commerce and Industry.~ it \".3: Comparison of wrongful and unfair dismissals Trigger Wrongful Fundamental breach of employment contract by employer Dismissal is harsh. according to the Australian Metals and EngineeringUnion. He said drunken behaviour on the job by.' he said.' By/'Ben Hutchings .MeBrianNoakes.) ~ . Their comments come after an arbitration decision in Queensland about three weeks ago. Me Keating said.of allowing other more dangerous health and safety regulationsto go by. fur example.to force coal miners at Newland Mines to take random breath tests to enslire the safety of all workers. unjust or unreasonable Action Common law Remedy Damages . could threaten the safety of colleagues." But Me Noakes said random testing in the workplaceshould be an optionagreed upon by employers and employees.in Queensland to take random breath tests was an infringement of their rights and 9id not take important factors into consideratioq. Me Ron Keating. I . "There are too many questions that must be answered" before breath testing could be implemented. 12-13 March rilentthat drugs and aIcohoUn the workplace were currently a threat to safety in Australia." Mr Keating said he had yet to see concrete evidence to support the state(Source: Weekend Australian. "If you can test people in the 'coal mining towns then why can't you do it in the offices in the city. Me Keatingsaid he believedit was too early for his union to accept the viability of random breath testing in the workplace. Mr Noakes said employers were forced to ensure that stricter measures were applied at the work place and it was their responsibility to do the best they could to'ensure precautions were taken. He said in a case where agreement could not be reached it should be the prerogative of the employer to establish random breath testing to ensure the safety of employees..randombreath testingwas an optionemployersshouldbe able to use if they felt it was necessary."'. Random breath testing of employees was a means "to get rid of' extra~taff. re-employment. "We support safety and I would like to see an ocCasionwhere no-one in the workplace was under the influence of drugs or alcohol. then bad luck.. He said the decision to force coal miners . p.' Unfair Statute Re-instatement. such as how the procedure would be handled. 58." Mr Keating said. said he was concerned that employers would use ranqombreath testing as a means i!. compensation /~ \\ :~ NEWSBREAK ~I Ruling on random tests stirs debate " . 1994. ' 'i' Table 14.CHAPTER 14 Human resource management and the law 403 -.~ ~' '".. airline pilots or train drivers. "It is a means of setting up a record on a worker and establishing a way to get rid of him. "But random breath testing is a viable option and says to workers if you don't like it. "And then there is the whole idea of victimising people.

An employee refused a direction from a foreman on a work site to train another worker whom the employee regarded as scab labour. ') .lIg hUII/{/1Ire. . fighting. He was dismissed on the spot. especially if an employee has good qualifications. especially considering his record of walking off the job. Management is obliged to give reasons for dismissing an employee. that is not itself sufficient to justify intervention.16 The man was employed as a labourer on the mutton slaughter floor..~ ti .1J~.. Giving reasons.. ~ ii. The decision maker must take into account the employee's record of service and the likely effects that dismissal will have on the employee. unable to find him. I? . The Industrial Court must ensure that the investigations undertaken on employees by employers are thorough and fair.. Should a court disagree as to the business necessity of a dismissal. It is also wise to give the employee an opportunity to explain his or her behaviour. and that he had been treated in a cruel.J " ' i I . I I. It is the basic right of the management to choose employees and to dismiss or retain them. Failure to give warning.. ! i! . that questions directed at the employee are made clear. However. . .. had gone home without permission.. There will be a good case for unfair dismissal if no reasons for termination are given. jurisdiction and rc~ fur an ~. long service. being lazy. including a previous suspension. . Courts do not pretend to be business experts. the following factors will usually be considered.- '- ~ .: f ~i f~ . harsh and unjust manner by the company. The availability. and only if the employee has a strong case which justifies overriding the employer's powers.Ii't)! iiI . ! "[ (r' I ' r~i . P t I 11 ! . abusing fellow employees and incurring 'a string of reprimands a mile long'. the court found that there had not been any act of unfairness. . Because the employee had expressed a desire to give forty hours' notice of resignation. . injustice or unfair dealing on the part of the employer towards the employee. it was determined that the labourer had been treated fairly.7~--. HR managers should be aware of these factors so as to avoid claims for unfair dismissal. . ul '. . After finishing work. 15An order for reinstatement will only be made in exceptional circumstances. <]' II ' i. i . Inadequate performance or misconduct warranting dismissal. I t I. Failure to give employees sufficient warning of dismissal and the reasons for it.\ .'.tlon for unfair dismissal vary from state to state depending on the legislation. . 1 . .1 . Having regard to all the circumstances.w/lrces t ~ i..4 I' !" .'"i' . "i !. j.~~ ~. Employer's right to hire and fire. . .l \..1. t . The proper test is whether there has been oppression..~. " I .~\ ". the factors considered by tribunals in determining a claim will also differ from state to state." l l I ~ . An example where the New South Wales Industrial Relations Commission refused to intervene concerned the employment termination and suspension of an employee from Blayney Abattoir.:1'. will result in compensation being paid. . The following are examples of conduct amounting to unfair dismissal. contended that the labourer had not been given a 'fair go'. \ '..p j . New South Wales branch. The commission found that the company had been very easy on the employee.. the employee had looked for his supervisor but. The court needed to determine whether the employer's legal right to dismiss had been exercised so harshly as to be an abuse of that right. The employer argued before the commission that the labourer had left the abattoir without permission and after several warnings. .. I i~. The Australasian Meat Industry Employees' Union. Ijt iq"f. Thus. This may avoid later allegations of unfairness. a good record and there is nothing to damage his or her character..\ ~:~ . ':' ' !~ .I I .t " 4U4 PART SIX M{/II{/g.Ik...

the greater the chance of resolving it. This was despite eight years of valuable and faithful service to the company. the employee should be given one more interview before being dismissed. Both must match the sliding scale. This should be conducted with.' The correct way to sack an employee The new Industrial Relations Reform Act. .1 I I I . refer to the previous counselling sessions. The letter should outline the reason for the employer's dissatisfaction with the employee's performance. During the interview. IS . the employee will be dismissed. The pur':' pose of the interview is to outline the employee's performance and' tb explain that it has been unsatisfactory.interview. The . refer to the employee's explanations and discuss why they are unsatisfactory. such as theft or assaulting a client. The sooner a problem is found. Further counselling sessions may be necessary. If at the end of the interview the employer decides to dismiss the employee. . if possible. After discussing a problem at a counselling session. Weekly. kept proper records of poor performance or breach of discipline. The court found this to be unfair because it was an l1nreasonable exercise of the employer's rights. 11 April 1994. Tackling problems also indicates to the employee that management is treating the matter seriously. not improve. 51. a witness should attend. he or she should make a minute in the records and deal with issues of notice or appropriate payment. The legislation states there are three valid reasons tor dismissing an employee: inadequate performance. \~ 1 .1 CHAPTER /4 Hllman re. 405 J .. order to do a job usually requiring two men. If the counselling sessions do not work.-' I . they must sign a copy of a '.letter (Source: Business Review ~ should make it clear that if work performance does. an employee must be given notice of termination or pay in lieu of notice. Employers should make sure the dismissal is handled sensitively and does not humiliate the employee. t~ e r t 't . f 1 i . depending on the length of the employee's service. and counselled employees about any problems with work or behaviour.. 'I" . the employee has one last chance to provide an explanation. A storeman was dismissed after a company restructuring which resulted in a personality conflict with the new manager. another manager. p. It is a good idea to let the employee be accompanied by a friend or union delegate. Employees must be given opportunities to improve performance to the desired level. An employee was dismissed because he refused to obey an employer's i. If they refuse to sign. . ~. .Employees should be informed that this is the final interview to decide whether or not he or she should be dismissed. the employee should be given notice in writing. makes it imperative that employers follow correct proced\lres when dismissing employees. according to the law firmArthur Robinson & Hedderwicks.record of the meeting.r NEWSBREAK ' ". Except in the case of serious misconduct.fOurce management and the law . . . Employers should ensure they have adequately briefed employees about the requirements of the job.Commission found that the employee had been unfairly dismissed. Many firms hire outplacement consultants to counsel senior employees immediately after the termination.19 The. misconduct and redundancy. If performance has not improved to the required level by the specified date. and ordered that the matter be set down for a later date when the question of compensation could be addressed.) ~- .

j Unfair contracts !~ ".f I l. . j . including technological change. dismissed employeeswill not have a remedy of reinstatementunder the relevant statute (because they either are not members of unions or are not covered by awards).~ 1 r : - =--- --l . The dismissals may arise for a number of reasons. In all cases the employee is dismissed through no fault of his or her own. . people often turn to section 275 of the Industrial Relations Act 1991. but what with the unions and everything you're the only one left I've got the nerve to fire! . Retrenchment Retrenchments are dismissals which are based on commercial and economic considerations... . a downturn or seasonality in business. harsh or unconscionable.- ~~R~ "Sorry about this.or to vary... Change and Redundancy Case 1984 which concerned an application by the ~ =-=:!Ii. This section is sometimes more favourable to applicants because it allows the commission very wide powersto declarevoid.. I it 1.. In the context of a dismissal.to 1 I 406 PART SIX Managing human resource. . Smiggs. Of major importance to the law on redundancy is the Termination. The respective rights of employers and employees in relation to redundancy or retrenchment are now almost exclusively governed by awards and legislation.~ t f [ '. In these instances.. and restructuring of the enterprise.a contracton the basis ~ .. Neither do they wish to encounter the long waiting lists to have their claim for damagesheard by a court.I that it is unfair.. Often. this may involve substituting fairer termination benefits than those contained in the original contract.

notice. the appropriate levels of severance payments were fixed. provision of alternative employment. It also forces the employer and the employee to contemplate and solve potential conflicts before they arise. employers are not required to disclose confidential information about the terminations which might be contrary to their business interests. ' / i~ -eM.4: Redundancy requirements Period of continuous service I year or less 1-2 years 2-3 years 3-4 years 4-5 years 5 years and over Period of notice I week 2 weeks 2 weeks 3 weeks 3 weeks 4 weeks ~' I . In its decision. In a Supplementary Decision. ---L 7 I . transmission of business. ~ pay pay pay pay pay An employer must hold discussions with employees and unions once a definite decision has been made which may lead to redundancies. statutes.i Y -t- t il ~ Australian Capital Territory Union to amend the Metal Industry Award.. information.4). awards-and the common law. f1. Summary The law governs the parameters of all employment relationships. the transfer to other duties of an employee. The general standard prescribed in the TCR Case has now found its way (either in full or in an amended fashion) into all major federal and state industrial awards. incapacity to pay. This allows the parties to set out their particular intentions very clearly. severance pay. minimum requirements based on length of service have been set (see table 14. an employee leaving during notice period. The aim was to provide stability and consistency and so avoid conflict and uncertainty. CHAPTER 14 Humall resource mallagemellt alld the law 407 \ I I ill Ie lS ~. Legal obligations arise from employment contracts. The IRC laid down recommendations in relation to consultation. superannuation. Since ignorance of the law is no excuse. HR managers need to be aware of these legal obligations. managers need to be aware of the required procedures and the need to give reasonable notice. However. Table 14. 7 weeks' 8 weeks' 8 weeks' pay . and notification to the Commonwealth Employment Service. In dismissing employees. ordinary and customary turnover of labour.. time off during the redun~ dancy period.2oThis was a test case. \ . but also one which has an advantage over its competitors. Many problems can be avoided by carefully drafting a detailed employment contract. the Industrial Relations Commission (IRC) discussed the general principles to be included in a redundancy provision in an award. This ultimately saves time and money.t ~ Severance Nil 4 weeks' 6 weeks. A workplace which is free of conflict is not only a happier one. From the case.

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