Managing employees through an acquisition

Many big name acquisitons reported in the last few days such as the acquisition of the Toll Group may be exciting news in the market but may set alarms bells for employees on what the future holds. In these situations, the employer should manage the culture of their organisation.

An acquisition can be a difficult process for both employers and employees. Employees often live in uncertainty and want to be kept in the loop on their position and their status within the organisation regardless of whether or not their employer is acquiring a company or is being acquired by another company. A clear process should be established for employers to follow to ease the transition for employees.

Below are some key factors an employer should take into consideration when managing employees in this situation:

Communication

Communication is vital in any organisation but especially important when there is a level of uncertainty faced by employees. The culture of an organisation will most likely be affected with the addition of more employees. The key to a smooth acquisition is communicating clearly and often and this can happen in a number of ways (e.g. one to ones, regular updates, group consultations). Employers should aim to clarify roles and benefits to employees.

Employees of an acquired company may want to know what will change when their company is acquired. Employers should try to be upfront with all employees about what will change, as well as the cultural aspects that will stay the same.

Employee Representation

There are bound to be employees who would support company cultural efforts and it would be useful for these employees to act as liaisons to their organisation.

Talent Management

Employers should consider the talent which would be brought to the table. Each employee would have to be considered individually to see what they can offer to the larger company. It would be extremely beneficial for the employer to clearly evaluate their talent before making rash decisions only for financial reasons.

Development program

Employers should also develop a robust development program which aligns employees into the larger business. This should go further than the basics of job titles, compensation and benefits. Detailed information should be made available to educate the new employees.

The PCS Basic Guide to Unfair Dismissals

This is the first of a two-part series on unfair dismissals. Part 1 will look at the basics behind the national unfair dismissal jurisdiction, with a view to assisting your organisation in understanding and responding to these claims. Part 2 will look at some practical tips in the unfair dismissal jurisdiction, arising from some recent case law.

Organisations of all sizes and in all industry sectors experience unfair dismissal applications. Be they at conciliation or hearing stage, unfair dismissal applications can be an emotional rollercoaster for all involved, and often require significant investment in terms of time and money.

The basics

  1. The unfair dismissal jurisdiction is available to most Australian private sector employee
  2. Employees can bring an unfair dismissal application to the Fair Work Commission (“FWC”) within 21 days of their termination becoming effective
  3. Employees must have served the “minimum employment period” (6 months where the employer has 15 or more employees, 12 months if less than 15) to bring a claim
  4. Employees earning over the high income threshold(currently $133,000, excluding super) are not eligible to bring a claim, unless they are covered by an award or an enterprise agreement
  5. Employees whose employment has been terminated because of a genuine redundancy (that is, where their position is no longer required to be performed by anyone because of operational changes, and where applicable consultation/redeployment requirements have been complied with) are not able to bring an unfair dismissal application
  6. Small business employers (employers will less than 15 employees) can (but are not obliged to) utilise the Small Business Fair Dismissal Code, which can then be used as a defence in unfair dismissal procedures
  7. In proceedings, the employee is called the “Applicant”, and the employer is called the “Respondent"
  8. The first step is usually a conciliation by telephone. A large majority of matters settle at or shortly following conciliation or are discontinued
  9. If the matter does not resolve at or following conciliation, the matter is listed for hearing before the FWC

What factors does the FWC consider?

The FWC looks at whether the dismissal, was “harsh, unjust or unreasonable”, with a view to producing a “fair go all round” for all parties.

There are three main factors that the FWC looks at in relation to a dismissal:

Was the dismissal substantively unfair?

  • Was there a valid reason to dismiss?
  • Was the dismissal appropriate given the issues at play? Would a warning have been a more suitable sanction?

Was the dismissal procedurally unfair?

  • Was the employee advised that their employment was at risk?
  • Were any allegations in relation to conduct put to the employee?
  • Was the employee given an opportunity to address these factors/respond to the allegations?
  • Was the employee given the opportunity to have a support person present at any disciplinary meeting?

Was the dismissal otherwise harsh?

  • What effect did the termination have on the individual, and is this appropriate given that person’s age, period of service, prospects of reemployment etc?

The above list is not exhaustive.

What orders can the FWC make?

IF a matter goes to hearing, the FWC will make a binding decision.

The FWC can dismiss matters where they do not consider that the dismissal was unfair.

If the FWC finds that a termination was unfair, they may make a monetary order of up to 26 weeks’ pay, or make an order for reinstatement (with or without backpay).

The FWC can discount orders by virtue of employee behaviour/misconduct and/or to take into account sums earned by an employee since their dismissal (mitigation of loss).