Newsletter Articles

How to Manage Your Employees
and Not End Up in Court

From experience, employers usually like to think they are doing the right thing by their employees. Generally there is no conscious plan to underpay employees or deny entitlements. Employers are usually shocked when they discover that employees are going to sue them.

There are five common errors that employers make when dealing with the employee relationship. These mistakes expose them to risks of litigation. All it takes is a disgruntled employee:

1. Failing to properly set out in writing the terms of the employment and agreement
Whilst some employers think that they are protected by awards agreements or NAPSA’s, disputes can still arise eg as to whether an employee is a part-time or a casual employee creating significant differences in entitlements such as annual leave. It is important to clarify this at the beginning of the employment relationship.

2. Failure to inspect awards
Often employers do not realise their employees are entitled to allowances and penalty payments. Disgruntled employees can sue an employer for underpayment that could extend back for the entire period of service costing the employer large amounts of money in both repayments as well as litigation costs.

3. Failure to customise standard computer generated payroll documents and forms which do not properly reflect the state of the relationship
A software system may print out as a standard that the employee works 40 hours per week when in actual fact they only work 38 hours. Without other evidence this can expose the employer to a claim for unpaid additional overtime over the period of the employee’s service.

4. Failure to have policies and procedures in place
Additional exposure to OH&S and workers compensation claims arise where there are no properly prepared risk management plans, policies and procedures.

5. Wrongfully terminating employees
Many employers are under the misapprehension that they can terminate employees without repercussion as a result of Workchoices. This is far from the truth. Many employers are still being sued for harsh, unjust and unreasonable termination or unlawful termination.

As always, prevention is better than cure. The cure is documentation and seeking proper legal advice. Employees are often a businesses’ greatest assets however if not properly managed can easily turn into liabilities.

If you are unsure if your documentation is adequate, please contact Tiana Daly on 9545 7255.

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