Is your employment function running on all cylinders?

By Sarah Stowe | 08 Nov 2018 View comments

Employees are the lifeblood of any company and for your business to be successful, your employment function needs to run like a Swiss watch.

How do you achieve this? Well, according to Bennett & Philp employment and litigation expert Lachlan Thorburn, it all depends on where you are in your business lifecycle.

“You need to ask yourself whether you are just looking to get started, if your business is new or recently established, or if your business is mature,” Thorburn says.

“This is extremely important because it allows you to identify how established your employment process is, if it’s working for you and does it reflect your current business position. Further, you must find out if you have resources allocated to managing your HR requirements in a full or part-time capacity or if you, as a business owner, will handle this yourself.

“The employment function within your business should mature as time goes on so as it grows and expands, the needs of your business and employees will change, and it is vital that you manage this change effectively.”

So how to achieve it? Thorburn has some ideas. Check out these steps to ensure a successful and smooth-running business…

1. Understanding the employment journey

It’s relatively easy to align your employment function alongside the growth and stage of your business. The list below demonstrates the process you should go through from start to finish relating to its establishment and management.

  • Understanding your workforce needs – structuring
  • Documents, systems and processes
  • Operations and day-to-day management – business health checks
  • Manage end of the employment relationship
  • Dispute resolution and litigation

2. Determining your workforce needs

It is essential when you start a new business to understand the extent and structure of your workforce. Will you need full-time workers, part-time workers, contractors or casual team members? These decisions will have significant impacts on the range and type of documents, systems and processes you will need to adopt in the next stage.

In many cases, small and medium business operators fail to undertake the appropriate due diligence. Assessing and identifying your workforce needs will also allow you to understand what sorts of wages, awards and salaries you might need to adopt or comply with.

3. Documents, systems and processes

Getting this right from the outset is critical. Ensuring your human resources documents, systems and processes are created to support your overall business objectives, and are also legally compliant, will greatly assist in the efficient running of your business and will reduce risks later.

Documents, systems and processes include employment contracts for all employee types (full-time, part-time, casual, contractor etc.), workplace health and safety policies, unfair dismissal policies, and other important human resources documentation.

Investing the time and effort from the outset in getting this appropriately completed, and in line with legal requirements, is well worth the effort. Engaging the services of a qualified legal professional is highly recommended to ensure your business and your staff are protected.

4. Operations and day-to-day management

Managing the employment function daily can be daunting, especially if you don’t have a dedicated human resources manager within your business. It’s likely that issues will arise that are outside your area of expertise, and this is where well mapped out documents, systems and processes can help.

Mitigating risks and managing employee issues can always be outsourced to qualified legal professionals who can assist in navigating more complex problems.

Alternatively, if you are looking to avoid issues arising, or if you’re trying to bring your employment function to best practice levels, undertaking a full business health check may be worth considering.

These health checks encompass a full audit and overview of your current human resource function including contracts, policies and procedures. The results of the health check can then be built into your business.

5. Managing the end of the employment relationship

The end of an employment relationship needs to be handled carefully, utilising proper processes. Depending on how this is handled, the chances of disputes arising can be greatly mitigated.

Questions to consider include:

  • Are you terminating the employee on performance-based issues?
  • Are you making the employee redundant?
  • Are you summarily sacking the employee due to misconduct?

Different processes will be appropriate to the kind of avenue you are pursuing. If performance is an issue, have you been documenting and communicating issues of performance to the team member in question? Have you given him/her written warnings? Not following the correct procedure could result in the employee disputing the termination and potentially raising an unfair dismissal claim.

When making an employee redundant, it’s critical that as an employer, you understand what constitutes a genuine redundancy. As with a performance-based dismissal, taking a process-oriented approach to redundancy will manage the risk of it being mishandled and potential disputes and litigation arising.

If it appears an employee has been engaging in misconduct, then usually it is appropriate that a proper investigation is conducted, and the allegation of misconduct is put to the employee before making a decision on termination.

Engaging the services of experienced advisors at the start of the employment relationship will ensure you have the documentation and processes you require to reduce the risks of litigation down the track.

However, circumstances do arise where you should consider obtaining legal advice to assist in managing termination or redundancy properly, and most importantly, in compliance with the law.

6. Handling disputes and litigation

Sometimes, disputes and litigation are unavoidable and your goal should be to minimise the damage to your business from a financial and reputational perspective. This is where seeking legal advice and assistance is important.

It’s also important to note that sometimes, through no fault of your own, an employee may raise a complaint or grievance. In some cases, this can be via the Fair Work Commission, Fair Work Ombudsman, Anti-Discrimination Commission, Human Rights Commission or even a Court of Law.

If an employee’s concern does reach this point, it is advisable to seek legal advice; such proceedings can be costly, complex and incredibly time-consuming, ultimately distracting you from running your business.