Deborah Peppard - HR Director
It can be challenging for most businesses to navigate the myriad of rules and regulations that they must comply with, and this gets even trickier when trying to make sense of the various employer obligations regarding people: discrimination laws, privacy laws, Fair Work legislation and more. Over time the facts can be distorted until there is a particular belief about what employers can and can’t do, should and shouldn’t do etc. Deb Peppard attempts to’ bust four common HR myths’ to help you get a handle on the facts!
MYTH 1: It’s illegal to give a bad reference
Nope, not true. False!
Many people believe that giving a "bad" reference is somehow against the law. In fact, there is no legal obligation to provide an employee (or former employee) any sort of reference – good or bad. Where the law might intervene would be if an employer provided a deliberately dishonest or misleading reference which caused some harm to the employee, or if it provided false positive information that caused harm to another business who relied on the feedback received to make a decision to employ the person. Either the employee or the new employer could sue for damages as a result.
To avoid any issues many employers adopt the position of providing a statement of service confirming an employee's length of service and position, but not commenting further.
1. Make a decision on whether you will or will not provide references for exiting employees. Don’t cherry pick amongst your staff – have one rule for all.
2. If you decide that you will provide references, make sure that any person who may be called to provide a reference understands their legal obligation to provide only truthful information.
3. Have a policy that any person providing references should only answer the questions asked and not provide additional information.
4. Stick to any agreement made with an exiting employee. For example, if you have amicably dissolved an employment relationship and the agreement is that for the record, the employee resigned, then this is the information you must provide as part of your reference.
5. Ensure you keep all employee records for the period of time you are obliged to. In Australia, Fair Work requires you to keep employee records for seven years.
MYTH 2: You need to give three warnings before dismissing an employee
No you don’t. So this too, is false.
There are five key things to consider when terminating an employee:
1. Did you give the employee a fair and reasonable opportunity to improve?
This could be achieved through a formal disciplinary process that included a performance improvement plan and/or any number of formal warnings – even just one warning…….It could also be as a result of ongoing informal conversations where you advised their employee that they need to improve. The key is that they were advised of the issues and provided fair and reasonable opportunity to improve. While that term is subjective, consider this: if you ask someone to improve their punctuality, they should be able to fix this immediately and then sustain the improved time keeping, so a fair and reasonable time to improve might just be one week. However, if you ask a sales person to improve their sales results they may need a period of 4 to 6 weeks to show that they are improving, in order to be fair.
2. Is the issue one of serious misconduct?
You are able to terminate an employee for serious misconduct immediately without providing any prior warnings, an opportunity to improve or a notice period if the behaviour or issue is serious. Note that serious misconduct usually needs to be purposeful; not an accident or a one off lapse in judgement. For example, a mechanic accidentally doing serious damage to a $100,000 car that they’re servicing for a customer would not be considered serious misconduct, no matter how upsetting and/ or costly for the employer. On the other hand, a rogue employee who engages in purposeful and malicious damage to upset the employer or customer would be considered serious misconduct.
3. Have you engaged in procedural fairness?
Even if the grounds for formal warnings or termination are clear, you must engage in a fair process to take any action. This includes providing the employee with notice that you would like to meet with them, advising them they may bring a support person to the meeting, advising them of any likely outcomes of the meeting, not going into a meeting with a pre-determined outcome – i.e. considering the employee’s responses prior to making any decision, and/or undertaking a full investigation if required. In short, don’t make a decision and take action without giving the employee an opportunity to present their side of the story in a fair and reasoned way.
4. Is termination of employment harsh, unjust or unreasonable?
The punishment needs to fit the crime. For example, if you have an employee who has been 5 minutes late to work on several occasions and you have provided them with opportunity to improve and even formal warnings, is being late by 5 mins three months later grounds for termination, or would that be considered harsh? Or lets say an employee has worked for you for 15 years with no problems and suddenly is making mistakes and you have provided a couple of warnings, is terminating their employment unjust or unreasonable?
5. Has the employee recently exercised a workplace right, and you’re terminating them because you think they’re a problem employee?
If yes, then this will be grounds for the employee to make an adverse action claim. Workplace rights can include making a complaint about a supervisor, making an enquiry about their pay and/or legal entitlements, taking a period of sick leave and so on.
In short, there are no set number of warnings you must provide before terminating an employee, but you do need to consider the things outlined above to ensure you’re meeting your employer obligations.
MYTH 3: They have an ABN so they are an independent contractor.
Nope, false again!
There are many tests to ascertain whether someone is an employee or a contractor. Essentially, if it looks like a duck and quacks like a duck, it’s a duck.
Fair Work and the ATO both have interests in ensuring that people are classified the right way in your business and both regulators will seek to correct any wrong classifications. The ATO wants their share of income tax and Fair Work wants to ensure that people are not missing out on their minimum pay and other entitlements by being misclassified as contractors.
Some of the questions you’ll need to ask yourself are:
1. Does the person get to regulate their own hours, delegate the work to others if they wish, and supply their own tools to do the job? If yes, they could be a contractor. If no, it’s likely they are an employee.
2. Dos the person have the right, and the time, to market their services to other businesses? If you have the person working 38 hours per week and ongoing week after week, chances are they can’t market their services and in fact, they are an employee. (The ATO requires no more than 80% of a contractor’s income to come from one business).
It’s important that as a business owner or manager you classify your workers correctly and pay them in terms of salary and entitlements accordingly. Things can get hairy if you call someone a contractor and they later claim to be an employee. Think annual leave, sick leave and long service leave back pay for a start!
MYTH 4: You can’t specify that you need a female worker for a role you are advertising.
Busted again! Actually, you can.
You can always make it clear that a specific person is required for a role – this might be gender specific, age specific or even religion specific, if it is a bona fide requirement for the job. It’s considered discrimination when you use a protected attribute (gender, age, race, sexuality and so on) as a reason to NOT employ someone where that characteristic has no bearing on the job at all.
Sometimes you actually do need to make a specific characteristic an important element of the job requirement. For example, if you are employing a rest room attendant for a female restroom facility, you can specific a female is required. If you are an organisation providing counselling services to gay or transgender youths it is fair and reasonable to consider that the person you seek might need to be lesbian, gay or transgender; of if you need an assistant for the minister of your church and the role will be to assist with writing sermons and identifying suitable scriptures, it’s reasonable to consider that you may need to recruit someone of the relevant faith.
The key to this one is whether or not a specific characteristic is a genuine requirement of the role, or whether it’s just your preference for some non-role required reason.
There are many rules and regulations and many myths to bust! If you’re not sure of something then remember that we’re here to help.