Myth-busters: Debunking Popular Myths in Labour and Employment Law
1. High income earners are automatically exempt from protection against unfair dismissal
It is a common misconception that employees who receive an annual rate of earnings greater than the high income threshold (currently $136,700) are not able to maintain a claim for unfair dismissal.
In fact, an employee who is “covered” by a modern award or to which an enterprise agreement “applies” (that is, who falls within the definition/classifications set out in said instrument) will be able to maintain an unfair dismissal claim, provided that they meet the other eligibility criteria, including (but not limited to) that:
- they are a permanent employee, or a casual engaged on a “regular and systematic” basis;
- they have been employed for at least 6 months (for employers with 15 or more employees) or 12 months (for employers with less than 15 employees); and
- their employment has been terminated at the employer’s initiative (as opposed to a resignation). A constructive dismissal in this context counts as termination at the “employer’s initiative”.
The above applies even if a modern award or enterprise agreement does not “apply” to a high income employee (such as through a guarantee of annual earnings), meaning that the terms of the relevant instrument do not have effect in relation to that employee. This is because the test in terms of unfair dismissal eligibility is award “coverage”, not “application”.
- Where an employee is not covered by a modern award or there is no applicable enterprise agreement and they earn over the high income threshold, then they will not be able to maintain an unfair dismissal claim.
- Where an employee is covered by a modern award or there is an applicable enterprise agreement (and otherwise meets the criteria for bringing an unfair dismissal claim) then they can maintain an unfair dismissal claim regardless of the level of their income or the operation of a guarantee of annual earnings (for an employee covered by a modern award).
2. You need to give employees three warnings
“I’m entitled to three warnings” is a common catch cry for employees who are being performance managed. This is almost always incorrect.
The only situation in which an employee may have an enforceable right to be provided with three warnings before their employment is terminated is where an express obligation to this effect is enshrined in an employment contract, industrial instrument or binding employer policy. This is an extremely uncommon scenario, yet many employers proceed on the basis that the provision of three warnings are a requirement.
The misconception about the “three warnings rule” arises in part from the unfair dismissal regime, in which the failure to provide appropriate warnings may render a dismissal unfair. In fact, each circumstance is different and must be considered on its own merits in relation to the timing and frequency of warnings. This means sometimes it is appropriate to give one or more warnings (even more than three, if appropriate), and in limited circumstances, a termination can be found to be fair despite the absence of any warnings being provided.
It is important to bear in mind that warnings are not a “silver bullet”, and a termination may be held to be unfair despite three or more warnings having been provided, if the Fair Work Commission finds that the termination was on balance still harsh, unjust or unreasonable.
A rule of thumb is that warnings/further warnings are generally more appropriate where the conduct in question:
- is sufficiently serious to warrant a formal sanction;
- has not been the subject of a previous warning (or warnings, where appropriate);
- can be rectified in a satisfactory timeframe; and
- has not led to an irretrievable loss of trust and confidence or amount to serious misconduct.
The key take away is that a determination should always be made on the particular facts, and without regard to an arbitrary (and generally mythical) “three warning rule”.
3. Employees must be offered a support person for “difficult meetings”
During “difficult” employee meetings, most frequently where employees are provided with warning or dismissal letters, employees and employers are often conscious of the need to have a support person present for the former. This derives (in part) from sub- section 387(d) of the Fair Work Act 2009 (Cth) (the “FW Act”), which states that the Fair Work Commission will consider “any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal” as a factor in determining “harshness” for the purposes of an unfair dismissal claim.
Looking at the FW Act provision more closely, it’s important to highlight that it does not say that an employee is “entitled” to a support person being present, but rather that an employer should not “unreasonably refuse” to allow such a person to be present. As such, there is no legal obligation under the FW Act for an employer to advise the employee that they can invite a support person to a meeting.
The above notwithstanding, it is good practice (particularly in mitigating exposure to an unfair dismissal claim) to offer an employee the opportunity to bring a support person to disciplinary meetings, but in doing so you should be mindful of the following best practice guidelines:
- you should have regard to the purpose and agenda of the meeting in determining whether a support person is appropriate. A simple fact finding meeting, in which an employer has not reached any preliminary or final view as to a set of facts, but is simply providing the employee with an opportunity to provide their version of the facts, does not generally require the employee to be provided with the opportunity to have a support person present. On the other hand, in a “show cause” meeting, or a meeting where the employee is provided with a warning letter, it may be appropriate to provide the employee with this opportunity. It is important in this regard to notify an employee at the first available opportunity of the purpose of a meeting, so that they are also able to turn their mind to the question of whether a support person may be appropriate;
- when notifying employees of a meeting (and inviting them to bring a support person) you should advise that, in circumstances where they have been provided with reasonable notice of the meeting (24-48 hours is generally appropriate), that you are unlikely to postpone the meeting on the basis that their support person is unavailable;
- you should obtain the name and position of the support person, to ensure that there is no conflict in them being present in the meeting (such as if they are a potential witness to an investigation involving the employee);
- you should not be reticent about setting and enforcing clear guidelines about the role of a support person. While a support person can take notes and ask clarifying questions if appropriate, it is not appropriate for a support person to be an advocate, that is, speaking on the employee’s behalf, asking new questions, or stopping the employee from answering particular questions. If this takes place it is appropriate to remind the support person of their role, and call a break in the meeting so that the support person can adjust their approach (and also have any discussion with the employee as required). If the behaviour then continues you can either seek to exclude the support person from the meeting, or offer to postpone it for a day or so to provide the employee with an opportunity to have another support person attend;
- where an employee has either utilised a support person (or declined an invitation to bring a support person) this should be duly recorded, and noted on a warning letter as appropriate; and
- whether or not an employee brings a support person (and particularly important where they are present) an employer should have an appropriate note-taker present in the meeting for the purposes of clarifying any factual disputes that may arise as to the matters discussed in the meeting. The same principles apply as to the support person, that is, the person should not take active or any substantive role in the meeting, beyond taking notes.