Processes help remove dangers of dismissal

DISMISSING employees can be one of an employer’s most harrowing responsibilities. It is a task often fraught with danger, both emotional and legal. And with eligible termination payments likely to incur a 6 per cent payroll tax from July 1, it is also about to become more expensive.

Dismissals often fall into three categories: redundancies when a company is downsizing; removal of an employee who is not performing; or for serious misconduct.

In the case of redundancies, one of the biggest problems facing businesses is the removal of people who could be vital to the slimmed-down company’s success.

Simpson Norris International CEO Nick Norris said there were three stages to a down-sizing process – rationalisation, revitalisation and renewal.

The rationalisation stage is identifying duplications within the various parts of the organisation, the revitalisation is getting those operations “trim, taut and terrific” and the renewal stage is bringing those leaner operations together and improving the whole company.

Mr Norris said that if companies did not target redundancy packages carefully they could remove employees that the slimmed down company would need.

“People should be thinking about the revitalisation and renewal stages before they even contemplate the redundancies. That way you know what the new-look organisation will need,” he said.

“One of the big problems with the slimming down process in an organisation is that it is often thought of as similar to chopping off a leg. You lose weight but also don’t function as well.

“The important thing is to identify the people you need to stay to take the company into its new phase.”

Chamber of Commerce and Industry director industrial relations Bruce Williams said employers had to be careful not to take a knee-jerk reaction to poor sales periods or industry downturns.

“If you’re not careful you can destroy an investment that you’ve made in your people,” he said.

On the other side is the removal of staff members who are not performing or have committed serious misconduct.

If either of these processes is handled incorrectly there is a risk that the business can find itself charged with unfair dismissal.

In both cases it is best for a business to seek legal advice before dismissing someone.

However, in the case of an underperforming employee there are processes that help make sure the employee is dealt with fairly.

Legal and management experts say it is important for employees to know what is expected of them, both in terms of duties and performance criteria, from the time they start work with a company.

If an employee is not meeting the performance criteria then they have to be counselled and given an opportunity to meet those criteria.

Both the employer and the employee should work together on this.

Clayton Utz workplace relations and employment partner Glen Bartlett said the whole process revolved around setting proper conduct and realistic performance standards from when an employee started with the business.

“If the employee is not performing to those standards you have to have a number of counselling sessions with them,” he said.

“The three written warnings thing is a myth. You have to give the employee counselling and opportunities to improve.

“The employer also has to be sensitive to the employee’s issues as well, be they personal or a lack of training.”

Mr Bartlett said in the case of redundancies, the business had to show that workers were being made redundant for commercial reasons.

“That’s one of the first things unions or individuals ask, whether it is a ‘real’ redundancy,” he said.

Mr Williams said the entire dismissal process had to be documented to show that it had been handled fairly.

“You have to keep all performance appraisals. The paper trail escalates to the formal warning and from there to the final note. That paper trail leads you to the final document, which is a letter of dismissal,” he said.

Small Business Development Corporation managing director George Etrelezis said the induction process, where the duties and performance criteria were laid out, was vital.

“One thing missing from a lot of workplaces is that induction,” he said.

Mr Etrelezis said those duties and performance criteria should be determined before the person was even hired and documented.

He said it was also important to try and part on good terms with an employee.

“A disgruntled employee can be as bad as a disgruntled customer,” Mr Etrelezis said.