Tag: HR

Is redundancy the new performance management?

Too often we hear from an employer or manager when they’ve reached their limit with a poor performer. Our initial advice is often to begin a performance management process, but often we’re met with resistance because the problem has gotten out of hand and the employer now feels like they don’t have the time nor wherewithal to begin to manage the employee’s performance. Often, they turn the conversation to whether or not they can use redundancy as an alternative option. Is that a viable option? Let’s explore it.

What’s the difference between performance management and redundancy?

A performance process involves addressing the performance or behavioural concerns of an employee, and is focused on improvement.  This process can often involve first and final written warnings, and potentially termination of employment as a final outcome, or an immediate outcome depending on the seriousness of the issue.

In between those steps should be periods of review and assessment, during which you should provide your employee with the relevant support to assist sustained improvement.. It’s essential that a proper process is followed throughout the performance management process to ensure that all reasonable steps have been taken and documented in accordance with legislation.

Active performance management can help you create a strong culture of excellence for your business. It creates clear expectations and can help attract and retain highly motivated and productive team members.

If you’re trying to leverage redundancy in place of performance management, it could be illegal and have unintended consequences, like a post-redundancy hit to your team’s morale and an impact to their productivity, not to mention unfair dismissal risks.

“A classic mistake that employers often make is that they don’t realise that if they make a role or person redundant, they are claiming that the position is genuinely not required by the business, therefore potentially leaving the business under resourced and open to the risks of an non genuine redundancy process,” notes Businessary HR Manager Lauren McCleery.

“A redundancy means the employer no longer wants or needs to have that position performed by anyone. And if it’s not a genuine redundancy, for example if you then try to recruit to replace the role you’ve made redundant, the employee could claim that it’s an unfair dismissal and make a claim against the company to the Fair Work Ombudsman.

“Generally we would advise clients to focus on leading by example – providing coaching, mentoring and support to their teams, including a well structured performance management program. This will help mitigate the need for a knee jerk reaction of using redundancies to exit an underperforming or unliked employee from the business.

“Your managers and leaders should have the capability and confidence to handle difficult conversations, and if you’re not finding that they are able to, then perhaps it’s at their level that more training and effort should be applied.”

But businesses can and do have the need to make roles redundant at times. Your business could consider making roles redundant for a number of reasons, including new technology that reduces reliance on the role, economic slowdown or business slowdown, closing or relocating an office, or perhaps you’re undergoing a merger or restructure.

If you’re not making a role redundant for genuine business reasons, you could be trying to cut corners. However, if your reasons are valid, making a role or roles redundant could be the answer for your business.

How do I make someone redundant?

Firstly, make sure that you are looking at a ‘genuine redundancy’, which requires you as the employer to meet three requirements, according to Fair Work:

  • You do not still need the employee’s job to be done by someone (i.e. you’re not hiring someone else to do the same role)
  • You’ve followed relevant requirements to consult with your employees about the redundancy under an award or registered agreement
  • You’ve made a reasonable attempts to find suitable alternative roles for the employee within the organisation.

You then have an obligatory consultation process to set out what you as the employer need to do, and this process should be done ASAP after you’ve made the decision to make major changes to the workplace that will result in redundancy.

Your consultation requirements include:

  • Notifying your employees that may be affected by the changes
  • Provide them with information about the changes and the anticipated effects
  • Discuss steps that you’ve taken to avoid or minimise negative impacts on your employees
  • Consider your employees’ ideas or suggestions about the changes
  • Discuss any potential suitable alternative roles available.

Making the redundancy process as smooth as possible

Strong and consistent communication is key. You should carefully plan and implement a communication strategy to avoid mixed messages or inaccurate information throughout your obligatory consultation process.

“If you’re not sure about your obligations, this is when you need to rely on your HR team or find an HR consultant,” adds McCleery. “This isn’t the time to wing it or leave it to chance.”

Provide dignity, support and respect throughout the process

The number one skill that will be useful to achieving an outcome with dignity and respect is empathy – how would you want to be treated if you were in your employee’s shoes?

Often best practice involves asking your impacted employees their input regarding any measures that might mitigate against the impact of redundancy, such as redeployment opportunities.

If the result is indeed that the employee’s employment will terminate due to redundancy, there are a number of support options that you could consider making available, such as offering a reference or giving your employee access to career management support such as outplacement services, financial advice or legal advice.  It’s also important to consider providing your employees with access to counselling and health/mental health support through a confidential service like an Employee Assistance Program (EAP).

Your managers and leaders will have the most regular contact with the impacted employees during a redundancy process, so it’s vital that they’re well positioned and armed with the correct information and messages to make themselves available to answer questions and discuss the change process with employees as the need arises.

To summarise

  • You need to make sure that any redundancies you’re considering meet the criteria set out by Fair Work.
  • You can make roles redundant when it’s a genuine redundancy, which can be tricky so we encourage you to get expert advice.
  • Redundancy isn’t a good replacement for performance management – you can’t use it to terminate someone who is underperforming or a ‘bad cultural fit.’
  • Focus on your performance management process NOW so you don’t run into a scenario of wanting to exit someone from your business without the structure, process, time or energy to do so.

Need to have a difficult conversation with an employee?

Get 30 min free advice from an HR Manager first! Call today on (03) 9662 9900.

The information provided in this article is only general in nature – before making business decisions you should consider seeking advice specific to your situation.

Are you aware of the latest penalties from Fair Work effective July 1?

Did you know new penalties have kicked in for business record keeping requirements?

We all know that good business records help you manage your business, make sound business decisions and in most cases can also improve the value of your business if you decide to sell it, but did you know that as a business you have legal obligations to store records and have them available for up to five to seven years depending on the “type” of records?

If you employ people under a modern award or agreement, you are legally required to keep accurate and complete time, hours, wages, leave, termination and issue pay slips to each employee. You need to keep each employees’ time and wages records for at least seven years and make sure they are always accessible for inspection.

Employees must also be given a copy of their employment records should they request it.
Whilst not all employee records are legally required to be kept, it may be best practice to keep certain employee records.

Penalty Rates

Record keeping obligations can vary from state to state and having a better understanding of your obligations can help prevent substantial penalty fees. From 1 July 2017 maximum penalties under the Fair Work Act are up to $63,000 per breach for a corporate entity and up to $12,600 for individuals who are involved in a breach.

Case Study: Penalties for breaching record keeping obligations

A recent federal court hearing fined two employers and their Director a whooping $37,500 for failing to keep proper employee records.

The Fair work Obudsman audited a popular Perth restaurant chain and found their lack of proper record keeping breached multiple legislative requirements.

Tram Hoang Han, who controlled the Han’s Café franchise was penalised $7500 and two companies of which she was the sole Director were penalised a further $15,000 each.

The Fair Work Ombudsman had previously advised Ms Han about the need to comply with minimum Award pay rates and keeping employee records.

The Fair Work Ombudsman’s audit was able to calculate that over 100 employees across four Han’s Café restaurants had been underpaid by $30,440. As a result of being short-changed their minimum hourly rate, Ms Han was made to back-pay these employees.

The audit also found that the practices for keeping time-and-wage records were so poor that they hindered the Fair Work Ombudsman from quantifying the full extent of the underpaid wages and entitlements, including penalty rates and overtime.

In his judgment, Justice Michael Barker described the record-keeping contraventions as “serious”. He said the “failure to maintain records truly strikes at the very foundation of the regulatory scheme which is designed to ensure that employees are paid their legal entitlements,” Justice Barker said.

So what next?

This is a timely reminder to employers to review their record keeping practices and take steps to rectify any non-compliance.

Seek the right HR advice and partner with Businessary to ensure you are keeping on track with your legislative obligations.

References:

Penalties for breach of record keeping

Case study

Don’t let your business get named and shamed in the headlines

Know your employer obligations!

When it comes to businesses hitting the headlines, the focus is on the ‘underdog’, or the ‘little guy’ – the big bad business taking advantage of its employees.

You only need to open the news to see another case where an employer has underpaid their employees, with many being young and foreign workers. Sometimes the company may not even be aware they are underpaying or be up to date with current rates.

How do you, as an employer, avoid being named and shamed? For starters, ask yourself the following three key questions:

• Are you underpaying your employees, or paying them the right wages?
• Are you providing all the entitlements you are legally required to?
• Are you providing safe working conditions?

We all know how costly these mistakes can be…. fines, back payments and compensation can often be the outcome.

Role reversal

However, what happens when it is the employee who has done the wrong thing by their employer?

Even in these cases, it is up to the employer to ensure that they follow the correct process to avoid potentially unfairly dismissing an employee.

Many companies have lost an unfair dismissal case (again costly!) based on process, that sometimes they didn’t even know they missed!

How can you make sure you deal with an employee in the right way, keep yourself from tripping over process, effectively address and resolve the issue, and potentially dismiss an employee if the situation calls for it?

HR in action

Businessary HR Advice Managers Lynn Ross and Lauren McCleery recently assisted a small business in a case where an employee was continuously signed off by a doctor as unfit for work due to a tough personal situation.

Each week, the employee would advise he was feeling better and he would be returning to work on the Monday, however each Monday he would send through a new doctor’s note signing him off as unfit for work for the remainder of the week.

This was a situation that has gone on for months. The employer became suspicious as the pattern continued and communication became less and less. The employer did not know what to do, what they could do, and were understandably nervous about questioning the employee as it was a situation that involved mental health issues.

After briefing the Businessary team, an investigation was quickly underway and it was revealed that the employee in question was falsifying doctors’ letters every week over several months! This was months of false doctors’ letters that resulted in the employee not doing any work, while the company continued to pay him his usual wages out of compassion for his ‘tough personal situation’.

By getting the right support, the company was able to identify that they were being taken advantage of, conduct a timely investigation in accordance with the correct process and get an outcome (immediate summary dismissal in this case) that was fair and reasonable, and it kept the company out of a messy and expensive unfair dismissal or discrimination claim.

All about the process

We have all heard about those cases where an employee is found to be doing something untoward, but through a slip up in process, the company not only loses in Fair Work, but they end up having to pay the individual for their troubles.

The team at Businessary is here to help with any employee issues, whether it is an employee’s performance or how they have conducted themselves. We can support your business through the process from start to finish and even represent your business in a Fair Work claim should you find yourself in a situation where things have not gone the way you thought they would.

Give our HR managers a call on (03) 9662 9900 to chat further about how we can help your business.

Join us for part two of our seasonal series – HR versus Law – Injury management

Our summer topic for the Businessary and Gilchrist Connell seasonal ‘HR versus Law’ series is on workplace illness and injury management. Workplace illness and injury management can be both a legal and HR challenge for most business owners.  The law tells us ‘what’ we can and cannot do, HR best practice tells us ‘how’ to put in place practices that help mitigate risk and are legally defensible.

Learn practical information about injury management

Join us for an interactive session where Annabel and Joel will share real examples of situations they have both faced and provided the legal AND HR advice. Combined, Annabel and Joel have over 25 years experience bringing plenty of examples and expertise to the session with a uniquely engaging style – HR versus Law.

Case studies that will be discussed include: 

  • Psychological injury
  • Physical injury within the workplace versus outside of the workplace
  • Long term illness of your employees

If you are a business leader, small business owner or responsible for HR and people management in your business then this is the session for you.

Details

When: Tuesday 6 December, 7.45am – 9am
Where: Boardroom, Level 24, 459 Collins Street, Melbourne
Points: 1.5 CIP Points
Cost: FREE! A light breakfast will also be included.

RSVP

Contact us for any questions

Any questions or concerns, email [email protected] or call us on 03 9662 9900. We look forward to seeing you there!

Our speakers

annabel
Annabel Rees Managing Director, Businessary
joel
Joel Zyngier Special Counsel, Gilchrist Connell

 

 

 

 

 

 

Presented by

gcBusinessary logo

 

 

 

 

Coming up

See below for further upcoming events as part of our seasonal series:

  • Autumn – 4 April 2017 – Handling a bullying or harassment accusation.
  • Winter – 25 July 2017 – Terminations and restraints – the pitfalls.

Have a topic that you want us to cover? Let us know! [email protected]

Minimum wage and high income threshold set to increase July 1 2016

The Fair Work Commission has announced that the minimum wage and high income threshold will increase on 1 July 2016, as part of the annual minimum wage review.

The announcement was made that minimum wage is set to increase by 2.4%, which for employers, will mean that effective the first full pay period from 1 July 2016, the minimum weekly wage will increase from $656.90 to $672.70, and as an hourly rate increase from $17.29 to $17.70.  This 2.4% increase will also be applied to modern award rates.

This increase will only apply to employees who are paid according to the national minimum wage, a modern award, or an applicable registered agreement. Most employees will be covered by an award, however if they are not covered by an award or agreement, then they would be covered by the national minimum wage.

Review your minimum wage obligations

It is important that businesses review the wages and salaries of their employees to ensure they are meeting minimum wage obligations in either the national minimum wage or modern award.  To help employers make sure that are applying the correct new rates, the Fair Work Commission are currently in the process of updating their pay tools with the new pay rates which will be made available online to employers to utilise.

As for the high income threshold, this is set to increase from $136,700 to $138,900.  High income employers are not covered by modern awards, however, with the announced increase of over $2,000 to the threshold, it is also important for businesses to also review if any employees who may have previously not been covered, may now be covered due to the increase.   For those employees, it is important to ensure you are meeting your employer obligations to your employees under any awards they may now be covered.

One thing not increasing for employers in the new financial year is the superannuation guarantee rate, which remained at 9.5% for 2015/16 and will continue to remain at 9.5% for the 2016/17 financial year.

Stay tuned for the Fair Work Commission pay rate tools update!

Employer compliance ‘spot checks’ across Australia

As part of a new campaign focusing on checking whether employers are compliant with both their employee obligations as well as employer record-keeping obligations, the Fair Work Ombudsman has been announcing ‘spot check’ audits over the last few months on businesses throughout Australia.

Compliance spot checks coming to a region near you

In March this year, the Fair Work Ombudsman announced that 50 Tasmanian and 200 Southwest Victorian business would be audited.  It was also announced that 30 Alice Springs and Barkly region businesses would be audited in April, 50 Brisbane and 75 Barossa and Adelaide Plains regions business would be audited in May and this month it was announced that 150 regional Western Australian business and 250 New South Wales business would be audited as part of the campaign.

As part of these random checks, Fair Work inspectors will audit businesses to ensure employers are paying the correct minimum hourly rates, penalty rates, allowances, loadings, overtime and providing appropriate meal breaks. They will also be checking to ensure adherence to record keeping and payslip obligations.

How would your business stand up against a Fair Work compliance ‘spot check’?

For many businesses, this will mean a mad scramble to find out what their obligations are and try and backtrack ASAP!  Some may have processes and procedures in place and be unaffected by an audit, while others may unfortunately be caught unawares and potentially suffer the consequences ranging from cautions, repaying underpayments and fines.

With the knowledge that Fair Work is door-knocking, now is the time to make sure that all your ducks are lined up and you are meeting your employer obligations. This is especially important with year end looming and the changes to pay rates and thresholds on July 1 2016.

Not sure if you are compliant? We can help you! Contact us on 03 9662 9900.

‘You say goodbye, I say hello’ – why you should get induction and leaving right at your business

Why are good induction practices and leaving with respect crucial components to get right in the employee life cycle? Well…

What stories do you want your people to tell at a BBQ (or on social media?)

This is the lens through which you should view your induction and leaving processes. Word of mouth can be either the best or the worst marketing for your employer brand.

A great start

Induction should ideally be the honeymoon period for your new starters. You’re forming the bond between company and employee that can withstand the normal ups and downs of a role. Most employees know the importance of a good first impression during an interview, remember that equally it’s a two-way street.

Your new starters have already formed a view of your business through the application and interview process – do you think it’s a good one? Yes or no, the induction process is your chance to either turn a mediocre perception into a good one, or turn a good one into a great one!


 

“Take care of your employees and they’ll take care of your business.”

– Richard Branson, Founder of the Virgin Group.


Induction can help you turn your employees into your biggest advocates. This will help you improve not just your company’s employee attraction and retention, but also your client attraction and retention as well!

How do you ensure a good induction?

Details, details, details. There are a lot of moving pieces to having someone join the organisation. Has all the appropriate paperwork been filled out? Have you ordered all the hardware and software they need, as well as setting up their desk? Having access to the network and emails is important, but so is having pens and paper to take notes during their early days. A nice touch? Have their business cards ready and waiting on their desk when your new starter walks in.

We’ve heard tales of people showing up to work with no desk or computer, no access to their company email and no one scheduled to show them around the building and highlight any important safety information.

Administrative tasks are important in induction, but so is ‘cultural induction’. Where do people go for lunch? Who can your new starter join for lunch on their first day, have you scheduled a team lunch or morning tea to properly welcome the new team member? Does your business have a more formal culture, or relaxed? Do you have casual Friday attire? It’s a bit awkward to show up on your first Friday in your best suit when everyone else is wearing jeans (or vice versa if someone assumes you have casual Friday and you don’t!)Employee, induction, culture, prank

Speaking of awkward (but funny) tales of induction, we had a new starter recently who requested two screens for her computer to help her do some website and content work. Our culture is one where we work hard, but we also know how to have fun, so a little prank was pulled.

We acquiesced to her request for the two screens, but as you can see, we just sourced monitors that were perhaps a little ‘vintage’. The best part was the second or two where you could see our new recruit wasn’t 100% sure of the joke. (Don’t worry, she’s now equipped with all the tools of the trade she needs – all brand new this year, no less!)

Take it up a level

Think about the things you would have liked to have on hand when you started in any of your roles over your career so far. Below is my wish list of things I would have liked to see, and they’re also the items that I try to embed in our business now:

  • Business strategy – there are several components to this. First is having a documented strategy (easier said than done, I know). Second is packaging it up in a way that’s easily understood by everyone in your organisation. And third, delivering the strategy and purpose straight from the horse’s mouth. Your CEO/Leadership Team should be the ones either sitting down with or presenting the strategy (depending on your business size). Imagine the impact having everyone in your business on the same page about where the business is going!
  • Mission, vision, values – Understanding the purpose of your business and bringing its values to life are the things that capture the hearts and minds of both your people and your clients. Helping new people understand the soul of your company and embrace your mission, vision and values involves more than just a page in an induction manual. Do you have values-based reward and recognition? Do you celebrate your mission and vision visually in the office where people see them regularly? Aligning your day to day business activities with the mission, vision and values in mind, in a very real and tangible way, takes some planning and determination but yields the best results for your people and your business.
  • Org chart – this one sounds really simple but I’m always shocked at how many businesses actually don’t have an up to date organisational chart that their people can access. For new people, this element can make life so much easier. Imagine walking into a place where the org chart is available on your intranet, along with photos of all your colleagues and their desk location. And at their desks, they all have name tags in case you’re drawing a blank and it’s already that awkward time after your first week when you should remember someone’s name but you’ve had to meet so many new names and faces that you just can’t quite think of it! Again, it’s sometimes these small, inexpensive and easy solutions that can lead to a great induction. And it’s not so bad for some of your teammates that have been wondering what that guy in Finance is really called because it would probably be inappropriate and unappreciated to call him ‘the creepy ninja’ because you didn’t catch his name three months ago and have therefore been referring to him (to your team only, you’re not a total monster) by the manner in which he appears silently next to your desk. HOW LONG HAVE YOU BEEN THERE, UM, BUDDY?
  • Health, safety, policies and procedures – this is as much to protect your business as it is your people. Don’t let your new people start without knowing what to do in case of an emergency or an issue, whether it’s knowing where the exits are in case of a fire or threat, who they should go to if something inappropriate happens and also a very clear view of what is considered appropriate behaviour at your workplace. This topic, while perhaps seemingly monotonous, is one of the firsts and most important things we address with clients. In fact, I think I’ll expand on this in a later blog, so stay tuned.

Now on the flip side of the coin… Leaving with respect and dignity

People leave businesses all the time, for a variety of reasons. Some leave on their terms, some leave on yours. One thing they should all have in common is a sense of leaving on the best terms possible.

Sure, there will be cases where a company or employee acts blatantly badly and perhaps it’s less possible to leave as friends, but I would still argue it’s important to depart at least with the perception of respect, and there’s a few reasons why.

‘But the employee lied, stole and bullied their colleagues’ you might say, ‘why shouldn’t we make an example of them or herald their departure with a snarky social media post?’

To be frank, partly because it happened on your watch. I have never seen a business gain anything by a nasty exit (not even satisfaction from calling out ‘don’t let the door hit you on the way out’). Be the bigger person, and instead review what YOU could have done differently in your role or as a business to prevent such things in future.

Not all leaving is bad leaving however, and in fact, I’ve seen some boomerang employees who come back after seeing that ‘hey, the grass was, in fact, not greener’. Don’t count your regrettable turnover as a lost cause. Maybe they don’t all come back, but if you leave them with a good feeling about their contribution, that their time was valued, perhaps they’ll be referring you their high performing friends (or even clients!) in future.

What does a good departure look like?

You know what a good employee should do when they’re leaving so they do the right thing by you: give you proper notice (or more), complete a good handover, give real feedback as to the reason for their exit, unsubscribe to their fifty eNewsletters so you don’t have to…

But what should they expect from you in return?

Leaving with respect should be something you pay to every employee, even if they are leaving because their performance or behaviour didn’t meet your expectations. Allowing them to tell their own story for their departure (leaving to take some time off, chasing a different opportunity) is one of the most appreciated steps you can take. There’s nothing to be gained from sharing that they didn’t pass their probation period or you aren’t extending their contract.

Redundancies can be difficult and emotional, but one of the most admirable things I’ve heard a good HR Manager say is that she takes pride in going through the redundancy process with utmost respect, care and professionalism – the impacted individual may already be going through everything from fear and anger to happiness and relief. Regardless of their response, manage the process in a way that doesn’t make them feel like their work didn’t matter or they’re just a number. Apply the golden rule, it always helps to think about how you’d like to be treated during this kind of significant change.

I’ve heard horror stories of everything from businesses withholding pay to make sure the employee ‘shows up’ in their final week (this also might be a breach on the part of the employer by the way), to the manager of the employee not even showing up for their last day or sending any kind of farewell note or a phone call.

Don’t leave a bad taste in someone’s mouth – it takes little effort to give a polite farewell. If someone has been with the company for many years, a proper card, gift and perhaps a lunch is appropriate. If they’ve only been with you for a short while, a card, small gift or at least a genuine thank you is called for. I’m not of the opinion that every departure calls for ten rounds of drinks at the local pub – this is all too commonplace and I can tell you that more times than not it ends poorly (a few drinks in and you get tears, blame, anger, gossip, the opposite of leaving with dignity and respect!)

And don’t forget about the details you attended to when your employee joined, perhaps take that list and reverse it for your departures checklist – here’s a few things to consider:

  • Have they returned all your equipment, keys, pass?
  • Have you communicated their leaving so their key stakeholders know who to contact from now on?
  • Have you alerted your IT person so they can begin the procedure of ensuring they remove access and maintain your data security?
  • Do any external suppliers need to know of the change?
  • Do you have access to your outgoing employees emails and files so you can catch anything that’s slipped through the cracks in the handover process?
  • Have you spoken to your team and/or function to let them know what is happening with the role (is it being filled or not, are you recruiting, can they apply)?

And it doesn’t hurt to keep up with your leaving employee on LinkedIn and congratulate them if and when they have a new role. Even if someone leaves feeling disenfranchised or somewhat bitter, their attitude and advocacy of your business may improve with time.

If you’ve done as much as you can to be considerate of your people’s induction and leaving, you can rest assured that your improved employer brand and word of mouth will not only improve your overall business culture and employee engagement, it may even give you a competitive advantage.