Mastering Employment Dispute Management: A Guide for Employers

Employers must navigate the complex landscape of employment disputes to ensure a compliant workplace and mitigate legal risks. Understanding the types of disputes and implementing effective strategies for prevention and resolution is crucial for mastering employment dispute management. This guide addresses some of the common types of employment disputes that arise and factors that employers should keep in mind.

A. Understanding the Types of Employment Disputes 

1. Adverse Action Claims:

Pursuant to Part 3-1 of the Fair Work Act 2009 (Cth) (the Fair Work Act), where an employer takes action against an employee for exercising a workplace right or engaging in protected industrial activities, the employee can allege unlawful adverse action, in breach of the ‘general protections’. Adverse action can include an employer dismissing an employee, injuring the employee in their employment, altering the position of an employee to the employee’s prejudice, excluding an employee from opportunities made available to other employees, or discriminating between an employee and other employees.

It is important to note that even if an employer has not intentionally taken adverse action against an employee, taking any action that can be perceived as adverse by the employee or which could negatively affect their employment or working conditions following their exercise of a workplace right, could still lead to an adverse action claim under the Fair Work Act.

2. Unfair Dismissal Allegations:

Part 3-2 of the Fair Work Act protects certain employees from unfair dismissal. This part becomes applicable when an employee alleges that their termination from employment was conducted in a manner perceived as harsh, unjust, or unreasonable. In such cases, employees can invoke the provisions under this part to seek legal remedies that address and rectify the perceived unfairness in the dismissal process.

Persons who are protected from unfair dismissal are those who have completed the applicable minimum employment period (which is calculated by reference to the size of the employer) and either earn below the high income threshold or who’s employment is covered by a modern award or enterprise agreement.

Government employees are excluded from the protective ambit of the Fair Work Act, however this category of employees can pursue legal recourse under the applicable legislation of various States and Territories in place to address certain employer actions. This includes the Industrial Relations Act 1996 (NSW) for government employees in New South Wales.

3. Discrimination Claims:

Various federal and State-based legislation in force in Australia prohibits employees from discriminatory behaviour. This includes for instance the Sex Discrimination Act 1984 (Cth) and Anti-Discrimination Act 1977 (NSW).

Discrimination claims can arise when individuals allege that they have experienced unfair or unjust treatment based on specific protected attributes, such as race, gender, age, or disability. These claims assert violations of anti-discrimination laws and aim to secure legal remedies for the perceived discriminatory actions.

4. Breach of Employment Contracts:

Ordinarily, at the outset of employment relationships, employers and employees enter into contracts that outline the terms and conditions of employment. A legal dispute alleging a breach of an employment contract occurs when either party alleges that the other party has failed to fulfill the agreed upon terms and conditions outlined in the employment contract which make up each party’s contractual obligations. Such breaches may include violations of agreed-upon terms related to job responsibilities, working conditions, confidentiality obligations or non-compete provisions. Employees who believe their contractual rights have been violated can allege of breach of contract and seek legal remedies to address the perceived infringements.

Allegations of breaches of employment agreements (as opposed to formal contracts of employment) can also arise when the relationship has been agreed verbally given the potential ambiguity and challenges in establishing or proving the precise terms and conditions agreed upon, potentially leading to disputes and difficulties in enforcing or defending against contractual claims.

Further, allegations of breaches of employment contracts can arise in respect of purported sham arrangements, where the form of the employment relationship disguises the true nature of the working arrangement. Protection against sham arrangements is found in Part 3-1, Division 6 of the Fair Work Act.

5. Breaches of Workplace Laws:

Legal disputes arising from breaches of workplace laws occur when employers are accused of violating legislation and legal regulations governing employment, encompassing actions such as discrimination, harassment, or failure to comply with health and safety standards.

Alleged violations may include breaches of legislation such as the Workplace Health and Safety laws, which apply in certain States and Territories and offer protection to employees from bullying under acts like the Work Health and Safety Act 2011 (NSW), and the Disability Discrimination Act 1992 (Cth), which prohibits discrimination against people with disabilities.

B.  Avoiding Pitfalls in Employment Litigation

 

1.Employment Contracts:

Legal disputes between employers and employees can often be avoided with the inclusion of clear and comprehensive employment terms in employment contracts. Well documented employment agreements can act as a preventative measure against misunderstandings, disputes, and potential breaches of employment laws. The articulation of terms in a precise and defined manner also reduces the scope for broad interpretation of employment terms, mitigating the risks associated with ambiguity in employment relationships.

Employers are encouraged to prioritise the inclusion of all employment terms in writing and be mindful of potential actions that may lead to workplace disputes, such as adverse action or unfair dismissal. Understanding the key elements of employment contracts and potential areas where breaches may occur is critical, necessitating the inclusion of comprehensive and enforceable terms that provide clarity and protection for both parties. This proactive approach can minimise the likelihood of disputes arising in respect of employment terms such as unpaid wages, overtime, and misclassification of staff.

Obtaining comprehensive legal advice at the commencement of an employment relationship can provide employers with the necessary insights to navigate potential pitfalls, adhere to legal requirements, and mitigate risks.

Further, conducting thorough assessments of workplace decisions and actions, along with seeking legal advice where necessary, is fundamental for proactively mitigating risks and fostering a compliant and fair working environment. Any time major employment decisions that affect employees are being made, legal advice should be sought and followed.

To avoid allegations of unfair dismissal, it is recommended that employers focus on drafting clear termination policies that are incorporated within employment contracts and adhering to these to minimise risks. Employers should also emphasise transparent communication about reasons or grounds that can or do lead to termination to promote a culture of fair employment practices.

Ensuring compliance with contractual obligations is paramount to maintaining positive employer-employee relationships, with awareness of contractual responsibilities, clear communication, and adherence to employment agreements mitigating the risk of allegations of breach of employment laws or employment contract terms.

2. Employment Laws:

Staying informed about changes in employment laws and regulations is imperative for employers to promote compliance and steer clear of legal pitfalls.

When employers stay updated on employment laws and regulations, they can adapt their policies and practices and accordingly, avoid the escalation of disputes that can arise in respect of outdated and non-compliant policies and practices in the workplace.

Investing in ongoing education for employees, particularly those in management positions and/or within the human resources divisions of businesses, will assist in ensuring that everyone in the workplace is well-versed in the latest legal requirements and can contribute to maintaining a compliant and ethical workplace.

Recognising when to seek legal advice is critical, and collaborating with experienced employment lawyers to navigate dispute resolution can provide valuable insights into rights, responsibilities, and effective strategies for dispute resolution. Legal counsel not only helps employers proactively address issues and mitigate risks but also aids in adopting compliant policies, fostering a legally sound and harmonious work environment.

If a dispute does escalate, navigating the litigation process requires strategic expertise. Employers are encouraged to enlist the guidance of experienced employment lawyers who can adeptly handle pre-litigious negotiations, exploring alternative dispute resolution options and if necessary, representing a party in litigation, ensuring a comprehensive and effective approach to resolving employment disputes.

3. Policies and Procedures:

Consistent application of workplace policies and procedures is vital to demonstrate a commitment to fair and equitable treatment of all employees. The implementation and enforcement of fair, unbiased and easy to understand workplace policies can prevent the escalation of workplace grievances and avoid claims of unfair or discriminatory treatment.

Regular review of these policies and procedures is vital to ensure that they remain up-to-date with the latest developments in employment law.

 

4. Documentation:

Employers’ workplace procedures should include provision for the maintenance of accurate employment records. This is a practical measure that can allow employers to swiftly and efficiently obtain information that can serve as valuable evidence in employment disputes and ensure compliance with record-keeping provisions found in the Fair Work Regulations 2009 (Cth).

Thoroughly documenting employee entitlements, performance evaluations, disciplinary records, and any relevant workplace incidents provides a strong evidentiary foundation for any employment claims that are made against an employer and that are unfounded. Adopting a meticulous and compliant approach to document creation and record-keeping strengthens an employer's position in potential disputes and allows disputes to be resolved both quickly and cost-effectively.

 

5. Communication and Dispute Resolution:

Transparent communication in the workplace is paramount for the mitigation of workplace disputes and grievances.

Employers should address grievances openly and promptly to prevent escalation into formal employment disputes. Maintaining open lines of communication and fostering positive workplace relationships contributes to a healthier organisational culture, where employees feel valued and supported, ultimately decreasing the likelihood of misunderstandings, conflicts, and grievances.

Further, implementing strategies for early identification of potential disputes and establishing effective channels for internal dispute resolution are proactive measures that employers can implement to allow employers to address employee concerns promptly and to prevent misunderstandings from escalating into formal disputes.

If internal dispute resolution measures fail, employers are encouraged to embrace alternate dispute resolution options such as mediation and arbitration that can resolve legal disputes outside the courtroom and foster amicable resolutions for all parties involved. This intervention by employers can lead to effective solutions for both employers and employees, avoiding the need for formal legal proceedings which will undoubtedly be more lengthy and costly for each party involved in the dispute.

To conclude, employers must proactively implement these strategies to master employment dispute management. By fostering a positive workplace environment and taking preventive measures against the escalation of legal disputes, employers can both create a cohesive workplace and minimise legal risks.

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The legal team at BlackBay Lawyers can provide specialised and detailed advice pertaining to employment disputes and litigation. If you are an employer requiring advice at any stage of an employment dispute, or an employer seeking to minimise legal risks, please feel free to contact BlackBay Lawyers on (02) 9100 0889 or via www.blackbaylawyers.com.au for a confidential discussion with one of our solicitors.

The content in this Article is intended only to provide a summary and general overview on matters of interest. It is not intended to be comprehensive nor does it constitute legal advice. It should not be relied upon as such. You should seek legal or other professional advice before acting or relying on any of the content.