four things you may be doing wrong in hr
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Russell Kennedy's Workplace Relations, Employment and Safety team take you through some 'need to knows' in human resources.TRANSCRIPT
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Four things you may be doing wrong in HR
Why, and how to fix them
3735666v1
9 October 2014
Libby Pallot, Principal
Anthony Massaro, Principal
Ben Tallboys, Senior Associate
> Managing complaints in the workplace
> Consultation process for redundancy
> Ongoing v fixed-term contracts
> Independent contractors, superannuation and WorkCover
Today’s topics
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Managing complaints in the workplace
The cost of failing to manage workplace complaints can be immense
> Compensation for economic loss
> Compensation for non-economic loss
> Penalties
> Legal costs
> Time costs
> Reputational damage
Getting it wrong
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You can take steps to minimise your risk
> Policies and procedures
> Training for staff and managers
> Prompt (and appropriate) responses
> Sensible use of investigations
Those costs are avoidable
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Policies set standards of behaviour
> Communicate policies to all workers
> Include policies in induction process
> Consult with employees on development and review of policy
> Include discussion of policies in team meetings
Policies
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A sound procedure may mean that claims are resolved internally
> Encourage staff to address bad behaviour directly
> If unresolved, set out the escalation process, eg:
> written complaints
> when to involve team leader, HR, etc
Complaints procedure
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> Follow the procedure
> Act promptly
> Support the complainant with the process
> Avoid bias
> Maintain confidentiality
> Either resolve it, or find out what happened and act on it
Responding to a complaint
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Complaints of bullying behaviour are often better handled informally
> How serious is the alleged conduct?
> Does an example need to be set?
> What is the complainant’s situation?
> Does the respondent admit the allegations?
> Are the parties willing to talk it over?
Informal processes
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Investigating a complaint
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Appropriate for more serious allegations, or if informal processes have failed
> Identify and particularise allegations
> Identify participants and witnesses
> Advise participants of process
> Identify consequences of victimisation
> Confidentiality
> Legal professional privilege
Investigation – roles
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> Employer notifies parties of process
> Investigator gathers evidence
> Investigator makes findings of fact
> Legal advisors interpret the findings
> eg. misconduct, discrimination, etc
> Employer acts on findings/advice
> Employer notifies parties of outcome
After the investigation
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> Education
> training, coaching, counselling, mentoring
> Dispute resolution
> apology, mediation, facilitated discussion
> Disciplinary action and directions
> Separation
> Rehabilitation
> Up to date policies and procedures
> Well trained managers> Dealing with inappropriate behaviour
> Responding to complaints
> Well trained staff> Identifying appropriate behaviour
For this to work, you need…
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> Get legal advice as soon as possible
> Develop an overall strategy
> Identify and secure privileged documents
> Comply with statutory obligations, eg:
> dealing with VWA or FWO investigators
> avoid victimisation
> Fight the claim, not the process
Managing external complaints
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Redundancy consultation processes
The cost of failing to consult can be more serious than you think:
> Unfair dismissal claims
> Penalties for breach of award/enterprise agreement
> Action for a breach of contract/policy
Getting it wrong
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> Comply with consultation provisions under award or enterprise agreement
> Comply with contractual obligations in employment agreements or policies
> Review any and amend any onerous contractual terms
> Document the consultation process
Managing the risk
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> Obligations under awards and enterprise agreements can vary
> Usually the consultation process must commence either:
> once a definite decision to make a major workplace change has been made; or
> when considering making a decision about a major workplace change
Award or enterprise agreement obligations
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> If an award or enterprise agreement does not apply there is no obligation to consult for the purpose of the Act.
BUT
> Contract may require employer to consult
> Policies can also create obligations
> Avoid creating contractual entitlements
Contracts and policies
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> Consultation must:
> be meaningful
> occur prior to decision being made to terminate
> provide a genuine opportunity to influence the decision-maker
> No requirement for consensus
What is genuine consultation?
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> Notify employee you are considering or have made their role redundant
> Meet with the employee and any representative to discuss potential outcomes and redeployment
> Allow employee time to provide any feedback and consider it carefully
> Make a decision about redeployment or redundancy
> Fully document the process
Consultation process
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> Depends on the business and the nature of the overall change.
> From Commission decisions:
> One day can be sufficient, particularly if the process involves many staff and the business needs to be protected.
> Two weeks may not be enough if the employee is senior and the employer fails to follow the award and its own policies.
How long should it take?
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> You can comply with:
> your award or agreement
> your contracts and policies
> Redeployment is more likely
> Avoid penalties, disputes, injunctions
> Defence to any unfair dismissal claim
> Genuine redundancy exception
By engaging in consultation
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> Ensure managers understand
> obligation to consult
> concept of redeployment
> consequences of not consulting
> Review contractual consultation terms
> are they necessary?
> are they helpful or onerous?
> do they conflict with other obligations?
For this to work…
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Ongoing v fixed-term contracts
> Employment continues indefinitely unless terminated in accordance with contract
> No need to renew contract
> Important to get termination provisions right
> Unfair dismissal rules apply
Ongoing employment
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> Employment contract has an automatic end date
> Contract can only be brought to an early end for serious misconduct
> Unfair dismissal rules:
> apply to early termination
> do not apply otherwise
Fixed-term employment
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> Definitive end date
> Contract can be renewed or a new contract negotiated
> Contract may also be terminated “at will” or for serious misconduct
> Unfair dismissal rules:
> apply to early termination
> may not apply otherwise
Maximum-term employment
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> Identify whether an end date is really needed
> If so, make it a maximum-term contract
> Ensure the contract clearly allows for earlier termination:> “at will”
> for serious misconduct
Manage the risk
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Independent contractors
> Wrongly classifying an employee as an independent contractor
> Rightly classifying someone as an independent contractor, BUT:
> not paying superannuation
> not including them under WorkCover
> not including them under payroll tax
What can go wrong?
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Independent contractors and superannuation
> Independent contractors are not employees!
> BUT, an individual who “works under a contract that is wholly or principally for the labour of the person” is deemed an employee under superannuation laws
> AND entitled to superannuation
What is an “employee”?
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> Is the contractor:
> being paid to provide services?
> unable to delegate or subcontract the work?
> being paid for their time and labour, rather than to achieve a fixed result?
> If the answer to any of the above questions is NO, then your contractor is not entitled to superannuation
“Wholly or principally for the labour of the person”
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> Rabbitohs Pty Ltd engages Sam Burgess to paint its new shop
> Sam does all of the painting
> Rabbitohs pays Sam $50 for each hour worked, and pay for materials
> Is Sam entitled to superannuation contributions?
Example 1
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> Canterbury Pty Ltd engages James Graham to paint its new shop
> James agrees to do so for $500 plus the cost of materials
> Contract does not mention whether James must do the job himself
> Is James entitled to superannuation contributions?
Example 2
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> Superannuation paid on the labour component of contract fees
> Failure to comply can lead to:
> Superannuation Guarantee Charge
> Penalties
> ATO audits
Consequences
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> No direct contract between the principal and the individual workers
> Principal not liable for superannuation
> Incorporated contractor may be liable for superannuation
Incorporated contractors
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> Identify preferred arrangement
> Ask the right questions!
> What is being provided?
> Can the work be delegated?
> How are fees calculated?
> Determine potential obligations at the outset
> Address issues in contracts
Manage the risk
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Independent contractors and WorkCover
> New legislation – Workplace Injury Rehabilitation and Compensation Act 2013 (VIC)
> Deeming rules for when:
> an individual contractor is entitled to WorkCover benefits
> a principal is liable for an incorporated contractor’s personnel
WorkCover
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> An individual is your ‘worker’ for WorkCover purposes if:
> a contractor is engaged mainly to provide services
> at least 80% of the services are provided by the same individual
> at least 80% of the contractor’s relevant income comes from the engagement
Deemed “worker”
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> You operate a training company
> You engage the personal services of a CEO at a top ASX company to provide leadership presentations
> Is the CEO your ‘worker’ under WorkCover?
Example 3
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> Principal must include amounts paid to the individual, less certain deductions, in premium calculations
> Individual may be entitled to WorkCover benefits from the principal for injuries related to the services
> Penalties for failure to comply
Consequences
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> What if an incorporated contractors’ personnel are also deemed to be your workers?
> Then:
> You must include deemed ‘workers’ in your WorkCover premium calculations
> Workers can only claim WorkCover for service-related injuries from you
Incorporated contractors
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> You operate a training company
> You pay a top ASX company to have its CEO provide relevant leadership presentations
> Is the CEO your ‘worker’ under WorkCover?
Example 3 again
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> Identify preferred arrangement
> Ask the right questions!
> What work is being provided?
> Who is performing the work?
> Query percentage of work and revenue
> Determine WorkCover obligations at the outset
> Address issues in contracts
Manage the risk
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When in doubt, always seek advice!
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Libby PallotPrincipal
03 9609 [email protected]
Ben TallboysSenior Associate
03 8640 [email protected]
Anthony MassaroPrincipal
03 9609 [email protected]