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AHRI:ASSIST - question and answer

The team at AHRI:ASSIST answer members' questions every day. If members can't find what they're looking for they can send through their questions via the 'Ask AHRI:ASSIST' email service.
Here are some of the questions covered:

WHS

Q. What are my OHS obligations for employees that work from home from a regular / irregular basis? 

You have the same general duty to ensure the health and safety (so far as reasonably practicable) of those employees that work from home. If you have a worker who regularly works from home, you must ensure that they have a safe working environment, they can communicate effectively with you, and they have an emergency plan and appropriate first aid facilities.

Termination

Q. Do I have to give the employee a reason for dismissal?

There is no common law obligation on an employer to give reasons for terminating an employment contract on notice.

However, if an employee is able to access the FW Act unfair dismissal scheme, a failure by the employer to give the employee notice of the grounds for dismissal before a final decision is made to dismiss, will count against the employer if the employee subsequently makes an unfair dismissal claim.

The FW Act also provides a general protections scheme which prohibits dismissal for certain reasons, including the fact the employee has a certain attribute or is engaging in a certain activity.  An employer will be better equipped to defend any general protections claim if it can prove the reasons for any adverse action and show that the decision-maker was not motivated by protected activity or attribute of the employee.

It may be easier for a claimant to prove that the claimed reason for taking adverse action is not the real reason if the claimed reason was not imparted as the reason for taking the action at the time it was taken. An employer may decide not to supply a reason for dismissing an employee if the employee cannot access unfair dismissal laws (i.e. because they have not served their minimum employment period, or are award/agreement-free and earning in excess of the threshold earnings).  This is not a good idea though, because of the potential exposure to general protections claims.

It may be easier for a claimant to prove that the claimed reason for taking adverse action is not the real reason if the action is not consistent with usual processes and procedures in the organisation.  If your organisation has established a process for dealing with unsatisfactory work performance or misconduct (such as a series of steps escalating to dismissal, with various rights of employees and employers during that process clearly specified) and this process is followed consistently, the employee will find it difficult to prove that the actions were for a reason associated with the employee’s protected activity or protected attribute.  This requires adequate training of managers so that they can implement those procedures properly.

When there is potential for one or more employees to be dismissed on grounds of redundancy due to the employer’s decision to implement a major workplace change, modern awards and enterprise agreements may oblige the employer to consult with the affected employees before a dismissal decision is taken.

WHS

Q: What's a "PCBU"? Is a PCBU a person?

A PCBU is any physical person or organisation or other legal entity conducting a business or undertaking. This may be an individual employer, a corporation, an association, a partnership, a sole trader, or a volunteer organisation (if it employs any person to perform work).

Privacy

Q: What are the privacy implications relating to payroll information?

A: You do not need employee consent to hand over personal information about employees to a contractor providing training or payroll management, if the employee would reasonably expect this information to be passed on.

Q. We have accidentally overpaid someone for the last 3 months, are we able to get the amount in overpayment back?

A. If an overpayment has occurred, in order to deduct any amount from an employee, you must ensure that written consent is given by the employee.  The only deductions that can legally be made from an employee are those pertaining to PAYG income tax deductions. Employers need to mindful that there are special rules regarding the deduction or withholding of monies from workers’ wages.

When notifying employees of overpayments, or where an employee does not consent to a deduction being made, it is a good practice to explain that an administrative error has taken place in processing their pay but as a sign of good faith; these amounts will not be recouped. Employees should however be notified that their rate of pay will be reduced to reflect the correct amount in future pay cycles. It is often useful to point to the particular source of wage information applicable to them (e.g. modern award, enterprise agreement, contract of employment etc.) to assist in explaining the correct rate of pay.

Personal and Carer's Leave

Q. An employee has provided a medical certificate for an absence before a public holiday. I suspect that the employee was fit for work that day. The certificate does not describe the employee’s illness. What can I do?

There is little you can do without concrete evidence that suggests the employee was fit for work.

Managing ill and injured employees

Q. We have an employee who is continually late to work. We believe he may be suffering from an illness. How is this situation best handled?

Turning up for work on time is clearly a reasonable requirement of the role.

You should meet with the employee to explain why the lateness is a performance issue and ask the employee if they have any personal issues that might be contributing to their unsatisfactory performance. If the employee indicates that their health is a contributing factor to their poor performance, explain that you need to understand why so that you can determine if there are any steps you could take to help the employee to perform their role satisfactorily. You could suggest that the employee obtain a medical report from his/her doctor and provide that to you. Alternatively, you could ask the employee for permission for you to talk to their doctor. If you do the latter you should make a record of the conversation and give a copy to the employee.

The employee may refuse to cooperate with your request for their medical details. If this happens, you can inform the employee that they must provide the information within a reasonable period. If not, you will have no option but to act in relation to their performance issue without considering the impact of their health.

Explain to the employee that your request for their information is reasonable in the circumstances.

When you receive the medical information you will need to determine whether it indicates that the employee’s health is a contributing factor to the performance issue. If so, you need to determine what measures you might reasonably take to help the employee to turn up to work on time (e.g. different working hours or breaks).

For more information on this, please refer to our case study – performance management of an ill employee.

Annual leave

Q. My business can’t afford to be without my employees for four weeks a year, can I force them to cash out their annual leave?

Use this checklist to determine whether you can cash out annual leave:

If an enterprise agreement applies to the employee’s employment, it must contain a cashing out clause that requires that:

  • “cashing out” not leave the employee with a leave accrual less than 4 weeks
  • each cashing out be achieved by separate written agreement between the employer and employee
  • the ‘cash’ be equal to the amount the employee would have received if the employee had taken the leave

If so, you can cash out the leave in accordance with the term.  If the enterprise agreement does not include a cashing out term (or the term does not impose the above requirements) you cannot cash out annual leave.      

NB the above also applies if a modern award applies to the employee’s employment and provides for cashing out.  

However, as at February 2013 no modern award provides for cashing out of annual leave.  Therefore if a modern award applies to the employee no cashing out is permissible.

If the employee is award/agreement free then cashing out is only permissible if:

  • “cashing out” does not leave the employee with a leave accrual less than 4 weeks
  • each cashing out is achieved by separate written agreement between the employer and employee
  • the ‘cash’ paid be equal to the amount the employee would have received if the employee had taken the leave

The requirement that the ‘cash’ be equal to the amount the employee would have received if the employee had taken the leave is measured as at the time of cashing out.  The amount must include leave loading if that would have been payable.

Managing ill and injured employees

Can I fill or make the employee’s position redundant while the employee is on stress leave?

In the short term, it would be best not to make any decisions that might impact on the employee’s ongoing employment until efforts are made to enable a return to work. This will reduce the risk of both further aggravating the employee’s stress condition and an extended period on which the employee is receiving weekly payments.

If the employee is receiving weekly payments under the employer’s workers’ compensation policy the employer will ordinarily be subject to an obligation to provide suitable employment.  The employer need not do this if it would cause it unjustifiable hardship (see above).

If a return to work is unlikely or would cause the employee unjustifiable hardship, the employee’s position may be filled or made redundant provided that this decision is taken solely on the basis of the requirements of the business rather than the employee’s impairment.

Probationary periods

Q. Do I have to give an employee a reason for not having their employment continued beyond the probationary period?

If (a) there is no such requirement imposed by the employment contract; and (b) the MEP has not expired, then you will not have any exposure to unfair dismissal if you fail to give a reason.  However, the employee could contend that the reason is discriminatory or in contravention of the FW Act general protection provisions.  Therefore, it is usually a good idea to give a reason for dismissal and document the process that led to the dismissal decision.

Case study

In November 2012 the Federal Magistrates Court imposed a $15,840 penalty on West Coast Propellers for dismissing a 16-year-old after 4 months’ service because the boy’s mother queried his pay.  The director was personally fined $2,640.  The prosecution followed an investigation by the Fair Work Ombudsman.  Although the employee was within the MEP, the fact that the employer dismissed the employee because he (or his parent) queried whether he was being paid correctly, resulted in the employer contravening s 340 of the FW Act.

Q. Do I have to warn an employee who is underperforming during their probationary period that they are unlikely to have their employment continued beyond the probationary period?

If (a) there is no such requirement imposed by the employment contract; and (b) the MEP has not expired, then you will not have any exposure to unfair dismissal if you fail to give a warning before dismissal.

Redundancy

Q. How do I choose which employees to make redundant?

Firstly, roles become redundant, not employees.  Employees may be displaced by the redundancy of their role.  Those employees will either be retrained, redeployed or retrenched (ie their employment terminated as a consequence of redundancy).

If a role becomes redundant because the functions or tasks being undertaken in the role are no longer required by the employer or a decision has been taken to allocate that work to other roles, then the employee occupying that role will have to either be retrained, redeployed or retrenched.

If the reduction of workload in a particular area means that less people are required to perform a particular role, then the issue of selection of employees becomes relevant. The use of “LIFO” (last in first out) is legitimate as are many other methods.  The selection criterion must not be discriminatory or contrary to the FW Act general protections provisions.

WHS

Q. We suspect that an employee may have falsified a claim that they injured themselves at work (there were no witnesses and no other evidence of this event) – what do we do?

You should direct the employee to undergo an independent medical examination to determine the nature and extent of the injury. Unfortunately, in many cases it will be very difficult to prove that the injury did not occur in the way that an employee claims. There may be other forms of investigation that will reveal the truth of the incident. These include reviewing other evidence to see whether it corroborates the employee's version or not, for example, phone records to identify the location of the worker at the time of the incident.

Q. Our employees can work from home if they want, do we have to provide them with a first aid kit?

You must ensure that an employee who regularly works from home has appropriate first aid facilities. A prudent employer would provide a first aid kit to such an employee, unless you have taken reasonable steps to satisfy yourself that the employee already has appropriate first aid facilities in his/her home.

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