It can be challenging for most businesses to navigate the myriad of rules and regulations that they must comply with, and this gets even trickier when trying to make sense of the various employer obligations regarding people: discrimination laws, privacy laws, Fair Work legislation and more. Over time the facts can be distorted until there is a particular belief about what employers can and can’t do, should and shouldn’t do and voila, a myth is born.  So let’s bust a few today:

MYTH 1: It’s illegal to give a bad reference

Nope, not true. False!   

Many people believe that giving a "bad" reference is somehow against the law. In fact, there is no legal obligation to provide an employee (or former employee) any sort of reference – good or bad.

Where the law might intervene would be if an employer provided a deliberately dishonest or misleading reference which caused some harm to the employee, or if it provided false positive information that caused harm to another business who relied on the feedback received to make a decision to employ the person. Either the employee or the new employer could sue for damages as a result.

To avoid any issues many employers adopt the position of just providing a statement of service confirming an employee's length of service and position, but not commenting further.

Our tips:

1. Make a decision on whether you will or will not provide references for exiting employees. Don’t cherry pick amongst your staff – have one rule for all.
2. If you decide that you will provide references, make sure that any person who may be called to provide a reference understands their legal obligation to provide only truthful information
3. Have a policy that any person providing references should only answer the questions asked and not provide additional information
4. Stick to any agreement made with an exiting employee. For example, if you have amicably dissolved an employment relationship and the agreement is that for the record the employee resigned, then this is the information you must provide as part of your reference.
5. Ensure you keep all employee records for the period of time you are obliged to. In Australia Fair Work requires you to keep employee records for seven years.

MYTH 2:  You need to give three warnings before dismissing an employee

No you don’t. So this too, is false.

There are five key things to consider when terminating an employee:

• Did you give the employee a fair and reasonable opportunity to improve?

This could be achieved through a formal disciplinary process that included a performance improvement plan and/or any number of formal warnings – even just one warning…….It could also be as a result of ongoing informal conversations where you advised their employee that they need to improve. The key is that they were advised of the issues and provided fair and reasonable opportunity to improve. While that term is subjective, consider this: if you ask someone to improve their punctuality, they should be able to fix this immediately and then sustain the improved time keeping, so a fair and reasonable time to improve might just be one week. However, if you ask a salesperson to improve their sales results they may need a period of 4 to 6 weeks to show that they are improving, in order to be fair.

The other accurate test is whether the employee understood that their employment was in jeopardy if they did not improve to the expected level. Both requirements need to be met. They need to be provided fair and reasonable opportunity to improve AND understand that their employment is in jeopardy if they don’t. Simples.

• Is the issue one of serious misconduct?

You are able to terminate an employee for serious misconduct immediately without providing any prior warnings, an opportunity to improve or a notice period if the behaviour or issue is serious. Note that serious misconduct usually needs to be purposeful; not an accident or a one off lapse in judgement. For example, a mechanic accidentally doing serious damage to a $100,000 car that they’re servicing for a customer would not be considered serious misconduct, no matter how upsetting and/or costly for the employer. On the other hand, a rogue employee who engages in purposeful and malicious damage to upset the employer or customer would be considered serious misconduct.

• Have you engaged in procedural fairness?

Even if the grounds for formal warnings or termination are clear, you must engage in a fair process to take any action. This includes providing the employee with notice that you would like to meet with them, advising them they may bring a support person to the meeting, advising them of any likely outcomes of the meeting, not going into a meeting with a pre-determined outcome – ie. considering the employee’s responses prior to making any decision, and/or undertaking a full investigation if required. In short, don’t make a decision and take action without giving the employee an opportunity to present their side of the story in a fair and reasoned way.

• Is termination of employment harsh, unjust or unreasonable?

The punishment needs to fit the crime. For example, you have an employee who has been late to work on several occasions and you have provided them with opportunity to improve and a warning.  They are then late again three months later.  If you were to terminate them on this subsequent tardiness, it’s likely the Fair Work Commission would deem that harsh and therefore an unjust termination.  However, if you have an employee who is not delivering on their work and you go through a process such as a Performance Improvement Plan and provide ample support and time to improve but they are still making costly errors and negatively impacting the business, the decision to terminate employment is more likely to be seen as reasonable as they cannot deliver on the inherent requirements of the job.

• Has the employee recently exercised a workplace right, and you’re terminating them because you think they’re a problem employee? If yes, then this will be grounds for the employee to make an adverse action claim. Workplace rights can include making a complaint about a supervisor, making an enquiry about their pay and/or legal entitlements, taking a period of sick leave and so on.

In short, there are no set number of warnings you must provide before terminating an employee, but you do need to consider the actions and processes outlined above to ensure you’re meeting your employer obligations.

MYTH 3: I can make deductions from my employees pay.

Not really.

Under the Fair Work Act, there are a couple of requirements that must be met in order for you to make deductions from an employees pay:

• the employee agrees in writing to the deduction and the amount that will be deducted, and the deduction is principally for the employee’s benefit.  This permission can be withdrawn by the employee at any stage.
• the deduction is authorised by or under law, an industrial instrument or an order of a court.

You may well have a clause within your employment contracts regarding deductions you may make regarding any money owed to the employer but be aware of the requirements that must be met.  If you are looking to manage deductions regarding social clubs, payments for professional development or the like, you would be better served having these as separate agreements that meet the requirements of the Fair Work Act.

MYTH 4: You can’t specify that you need a female worker for a role you are advertising.

Busted again! Actually, you can. You can always make it clear that a specific person is required for a role – this might be gender specific, age specific or even religion specific, if it is a bona fide requirement for the job.

It’s considered discrimination when you use a protected attribute (gender, age, race, sexuality and so on) as a reason to NOT employ someone where that characteristic has no bearing on the job at all. Sometimes you actually do need to make a specific characteristic an important element of the job requirement.

For example, if you are employing a rest room attendant for a female restroom facility, you can specify a female is required. If you are an organisation providing counselling services to gay or transgender youths it is fair and reasonable to consider that the person you seek might need to be lesbian, gay or transgender; of if you need an assistant for the minister of your church and the role will be to assist with writing sermons and identifying suitable scriptures, it’s reasonable to consider that you may need to recruit someone of the relevant faith.

The condition for this one is whether or not a specific characteristic is a genuine requirement of the role, or whether it’s just your preference for some non-role required reason. It is sometimes advisable to seek advice from the relevant regulatory body to undertake a recruitment campaign for a specific person, to avoid being seen as being discriminatory.

MYTH 5: You only need to provide policies during a new employee's induction.

You know we love policies here at HR Staff n’ Stuff and with good reason.  Aside from setting the standard for acceptable behaviour within the workplace, well communicated and up to date policies can mitigate the risk of legal risk by showing an employer has taken ‘reasonable steps’ to prevent employees from engaging in unlawful and/or dangerous behaviour.

The key here is well communicated and up to date.  There is no point having policies if they are sitting in some managers drawer or hidden away on the server where no one knows how to access them.   Nor are they useful having policies that are years old and therefore not reflective of changes in legislation.  And this is why you don’t just keep them for new employees, policies need to be adapted to changes in the law, which means you need to communicate clearly to employees about any changes and ensure they have read them.  We’re giving you a hint here – you need to keep a record of them reading and agreeing to your most recent versions of your policies in order to prove your employees know and understand their obligations. 

There are many rules and regulations and many myths to bust when it comes to HR.  With incredible change to the legislation in 2023 and more to come in 2024, it can feel like employment rules are overwhelming but that’s why we are here to help you so get in contact if you need support or guidance.