Managing Dismissals

Chapter 11

Learning Objectives

1. Understand the importance of work in capitalist societies and explain two different perspectives on dismissals

2. Discuss employee initiated decisions to leave the employment relationship

3. Identify the broad categories of employer initiated decisions to terminate the employment relationship

Learning Objectives

4. Outline the bases upon which a fair dismissal may be deemed unfair and those who have access to remedies for unfair dismissal

5. Differentiate between unfair and unlawful dismissal

6. Discuss consequences if dismissals are not conducted correctly

Introduction

• Why can ER be ended?– Individual decisions– Economic circumstances– Technological change

• What is the impact?– Depends on who has control in making

the decision to terminate the relationship

Work and Dismissal: Some Central Ideas

• Work is a central concept in capitalist societies

• Why do we work?– people work to live– people work to consume– people work for intrinsic rewards– people work from moral necessity

Work and Dismissal: Some Central Ideas

• Economic rationalist perspective:– supports managerial prerogative– seeks to reduce interventions into

market and employment relationship– seeks to allow employers to terminate

employment without having to follow rules set by external bodies

– focuses on individual

Work and Dismissal: Some Central Ideas

• Social justice perspective:– focuses on fairness– argues that negative consequences arise

from power inequalities– argues that state must intervene to redress

power imbalances between employers and workers

– focuses on groups of individuals and favours collective organisation

Employee Decision to end Relationship

• Many individual reasons, but 2 methods:– With notice

• resignation

– Without notice• abandonment• frustration

• Notice is period required to be given, or be paid in lieu, if ending ER so alternative work or workers can be found

Employee Decision to end Relationship

With notice

• Worker at fault– performance issues– misconduct

• No worker fault– redundancy/retrenchment

Employee Decision to end Relationship

Without notice

• Worker at fault– summary dismissal: immediate dismissal (no

notice or pay in lieu) because conduct has destroyed ER

– degree and consequences are important

• No worker fault– frustration

Unfair Dismissal

• Unfair dismissals are those judged ‘harsh, unjust or unreasonable’ by courts or tribunals

• Appeals against unfair dismissals emphasise procedural fairness and having valid reasons for dismissal

• Recent federal government reforms have reduced numbers of workers with recourse to appeals against unfair dismissals

Possible outcomes of unfair dismissals

If a dismissal is found to be unfair, the tribunal may award:

• reinstatement– in same or similar position with continuity

of employment and conditions

• re-employment– in same or similar position, but as new

employee

• monetary compensation

Exclusions from Unfair Dismissal

• Many workers excluded from appealing unfair dismissals — slight differences between jurisdictions:– workers engaged for specific period of time

or specific task – probationary employees in first 3-6 months

of employment – casual workers employed for less than

12 months– trainees employed under traineeship agreements

Exclusions from Unfair Dismissal

• Many workers excluded from appealing unfair dismissals (cont’d):– Employees under special arrangements

that provide particular protection in respect of termination of employment

– Higher paid non award employees – Federal WorkChoices Act 2006 excluded

workers from all organisations with less than 100 workers

Unfair or unlawful dismissal?

• Unfair dismissal concerns fairness in method and valid reasons

• Unlawful dismissal concerns breaching legislation by dismissing for an invalid or prohibited reason

• If decision to dismiss relates to a characteristic of a worker or an activity they have a right to engage in, rather than the requirements of the job, performance, or economic circumstances of the firm, the dismissal may be unlawful

Unlawful Dismissal

• Prohibited reasons fall into several categories:– discriminatory matters

– membership or non-membership of a union and associated activities

– filing a complaint or taking action against employer for alleged violation of laws or regulations

– refusing to negotiate a Workplace Agreement

– temporary absence from work

Outcomes of unlawful dismissals

• Reinstatement

• Monetary compensation

• Employer may also be fined for breaching legislation

• Unlawful dismissal actions can cost in excess of $40 000

Minimising Dismissal Problems

Refine recruiting activities:

• Develop detailed job descriptions

• Ensure accurate advertisements

• Base interviews on essential attributes required for the job

• Provide a realistic job preview

• If appropriate, test or assess essential skills for the job

• Consult referees or past employers

Minimising Dismissal Problems

For new employees:• Establish formally agreed probationary period• Clearly establish workplace rules and

requirements• Advise of required performance standards

and workplace expectations• Provide feedback in probationary period and

regularly during employment, and take any corrective action necessary

Minimising Dismissal Problems

If employees are not performing to standard :• Discuss problems and clarify performance

requirements standard• Allow employees to respond to concerns about

their performance• Provide employees with opportunity to improve

within a set time frame, ensuring there is a clear understanding of what improvements are required

Minimising Dismissal Problems

If employees are not performing to standard (cont’d):

• Provide regular feedback on performance

• Document all issues• Implement dispute resolution procedures

to ensure problems are resolved• Involve union representatives if

workplace is unionised

Summary

• Work is essential to survival for most workers in capitalist societies, so dismissal from work can be catastrophic

• Industrial tribunals attempt to balance economic rationalism and social justice– acknowledge managerial prerogative

– assert procedural fairness

• Employees may end ER for many reasons but generally have plans

Summary

• Employers may dismiss workers for performance, misconduct, operational or economic reasons, or factors outside their control

• ‘Harsh, unjust or unreasonable’ dismissals can result in unfair dismissal appeals if workers meet specified criteria

• Workers dismissed for discriminatory or other prohibited reasons can take unlawful dismissal action — but this is costly

Summary

• Organisations that implement equitable policies and procedures can reduce direct and indirect problems when terminations are required

Summary

• Poor dismissal procedures have direct and indirect effects on an organisation:– high turnover– reduced morale– reduced productivity– absenteeism– reduced innovation and input