It’s a small business owner’s worst nightmare – an unfair dismissal case.
One of the biggest complaints among small businesses is that it’s too difficult to fire a rotten employee. Certainly enough cases have come before through the legal system over the past few years to provide some guidance to small businesses’ on whether they are likely to get hauled before the courts for a claim of unfair dismissal.
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In many cases, the problem is the business in question hasn’t got everything in order. When unfair dismissal claims succeed it is often because an SME hasn’t done the legwork to give itself the best chance of success. The small business may be simply disorganised, or it misses steps in the legal checklist.
Rachel Drew, partner at TressCox Lawyers, says the area of unfair dismissal is always going to present interesting lessons for employers.
“It’s an interesting area just because of the variability of the individuals being employed and the reasons for certain actions taking place,” she says.
“The courts and commissioners are also quite careful to assess cases on their individual merit, so you might find that in two cases with similar circumstances, they might have different outcomes.”
While plenty of businesses love to complain about the unfair dismissal procedures, the fact is the Fair Work Commission takes a strict view on what constitutes unfair dismissal. The FWC dismisses more applications than its grants.
But where it does grant unfair dismissal, it outlines clear reasons for doing so. Many of these reasons are straightforward – a business has forgotten to document a certain procedure, for instance. If only for that missing piece, that business could have won.
“I’ll often look at a case, and think, ‘how did it come to that conclusion?’. And it’s usually because of the business’s conduct,” says Drew.
Several legal experts have told SmartCompany businesses often make a big mistake in preparing for unfair dismissal cases by forgetting to document disciplinary procedures, or not consulting employees before they are made redundant.
These are clear mistakes that should be avoided.
We’ve put together a list of 10 unfair dismissal cases from over the past year. From each case we’ve taken a lesson to apply to your business. They range from common sense – make a social media policy – to the seemingly obvious – actually turn up to your hearing.
Chances are good you may end up facing one of these cases. Learn from these cases, make sure you put in the hard yards, and avoid the small mistakes which could trip you up.
1. Late to work, early to fire
At first glance it makes sense as a rule of thumb. If your employee is late, then you should be able to fire them.
But not so, according to the Fair Work Commission. At least, not on the day it happens.
Take this case for instance, in which an employee of a wedding gown shop was fired by her employer, in part, for turning up to work late five separate times.
The company ran into trouble when the Fair Work Commission said the “continued failure to ensure that she attended work on time” didn’t constitute enough reason for “instant dismissal”.
It’s those words, “instant dismissal”, which are the problem. According to Andrew Douglas, partner at M&K Lawyers, you can’t simply fire someone instantly for turning up late. “It’s not necessarily warranting of immediate dismissal. It needs to be an aggregation of behaviour.”
If your employee is late, then you can fire them. But you need to have outlined clearly in your workplace policy showing up late is a serious offence, and each time it occurs, you need to give a warning. After a series of warnings, you may well have grounds for termination.
2. Messing around on social media
Social media has been great for most individuals.
For businesses, however, the story is a little different. Can employees use Facebook in the office? What about on phones? How about social media while you’re at work events – is that okay? There are so many rules and regulations.
One specific area that has been a lot of trouble is policing what employees say about their roles while off the job. And in this Linfox case, it became a significant problem.
The employee was discovered to have made some disparaging comments against two managers on Facebook – comments which the managers claimed were sexist and contained racial vilification.
Fair Work Australia granted the unfair dismissal application because the employee argued he didn’t know how public the comments were, and also pointed out his page had the highest level of privacy settings.
One of the major criticisms was that the business didn’t have a social media policy. People + Culture Strategies director Nichola Constant told SmartCompany that if the business did, its arguments may have been taken more seriously.
Develop a social media policy, and make sure you stick to it.
3. Lies, damned lies and sewage
SmartCompany covered one of the more unusual cases in unfair dismissal history lately.
The owner of a plumbing business was hit with an unfair dismissal claim from an employee, who claimed his managers had threatened him and forced him to write out a letter of resignation.
The owner of the company said the exact opposite happened – the employee showed up and produced his own resignation, which was accepted verbally.
Upon investigation, the Fair Work Commissioner found in favour of the business owner.
“I have great sympathy for the employer who has clearly conducted his business with great emphasis upon acting with honesty and integrity at all times,” the Commissioner said.
Although the company involved here has won the case, there is still a significant lesson for businesses when it comes to redundancy.
Douglas told SmartCompany at the time it’s not enough to just verbally accept a resignation. You need to have it in writing.
“No matter what happens, remember as an employer to act generously because it is the employer’s conduct that is first placed under scrutiny by any court,” he said.
4. I’m late, I’m late, for a very important Fair Work hearing
Earlier this year, a small art gallery in Western Australia was hit with an unfair dismissal claim.
But in the proceedings, the business didn’t even show up to conciliation. There was no reason given as to why. And when the Fair Work Commission attempted to contact the business owner, there was no response.
As a result, the Commissioner said he would “rely on and accept the evidence of the applicant”.
The lesson here is simple – just show up. The Fair Work Commission is likely to rule against you if it doesn’t have any evidence from your side.
Be responsive, show up and plead your case. Otherwise, you’ll have zero chance of winning anything.
5. Documenting discipline
One of the big problems a lot of businesses make is not properly documenting disciplinary decisions. It often comes back to bite them.
In a case which occurred earlier this year, a worker was fired after leaving a child unattended. Her workplace, a childcare centre, said this was in breach of the workplace code.
A key part of the case involved the business attempting to show it had previously disciplined the employee. But the ruling pointed out these issues were “not supported by any evidence”, and related to problems that occurred well before the specified incident.
If the business had been able to demonstrate evidence of those other disciplinary situations, the case may have been tipped in their favour.
At the time, Douglas told SmartCompany businesses need to document everything in as much detail as possible, or risk being caught out in court.
“It’s very common for employers to reach a level of frustration with an employee, and then a particular event occurs which warrants disciplinary action, which becomes the basis for the termination,” he said.
But the main point remains – documentation is always necessary.
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