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Five things you may be doing wrong in recruitment

Libby Pallot and Abbey SuttonWorkplace Relations, Employment and SafetyRussell Kennedy Lawyers

20 July 2016

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>Asking the right questions

>Giving the right documents to employees (and in the right order)

>Dismissing employees during probation

>Changing your mind after making an offer

> Insourcing risks

Key topics to be covered today

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Asking the right questions

> It is unlawful to discriminate against potential employees in certain circumstances:> Fair Work Act 2009> State and Federal discrimination legislation> Exceptions and exemptions apply

>Asking a question indicates that you need to know the answer and will act on it

Why should I be concerned?

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>Employers must not take "adverse action" against a prospective employee or contractor due to protected attributes

>Adverse action includes refusing to offer employment, or offering different terms or conditions employment, because of a protected attribute

>Reverse onus of proof applies, penalties and damages

General Protections

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>Similar to Fair Work Act 2009>May include other protected attributes,

eg criminal record

>Reverse onus of proof does not apply, no penalties

>Wider application eg service providers, clubs and accommodation

State & Federal legislation

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> race or colour

> sex or sexual orientation

> age

> physical or mental disability

> marital status

> family or carer's responsibilities

> pregnancy

> religion

> political opinion

> national extraction

> social origin

> union membership and activity

> temporary absence due to illness or injury

> criminal record (some States)

Protected attributes

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>Other general prohibitions eg> Equal Opportunity Act 2010 (Vic): a

person must not request or require information which could be used to discriminate

> Disability Discrimination Act 1992 (Cth): a person must not request or require information connection with a disability if others in same circumstances not asked

State & Federal legislation

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>Prospective employer may have grounds to ask and require information > Inherent requirements of the role – eg

physical – can you bend, lift, drive or mental – can you work under pressure?

> Genuine occupational requirement – eg criminal record when working in aged care or with children, age when working in licensed premises, pregnancy when working with hazardous chemicals

Exceptions

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>Can apply for exemptions to comply with certain legislation> Request to advertise for job

applications from one gender only eg women’s refuge

> Request for information in relation to race eg national security

Exemptions

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What questions should I be careful about asking candidates?

>Only ask questions you need to know the answer to based on:> the requirements of the role including

duties, working environment and terms and conditions of employment

> any reasonable adjustments which may be required

> workplace health and safety

Irrelevant questions

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> Don’t ask: Do you have family responsibilities?

> Do ask: The role requires overtime and interstate travel, can you commit to being available?

> Don’t ask: What nationality are you?

> Do ask: Do you have the right to work in Australia

Examples

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>Don’t ask: Have you previously filed a claim for workers compensation?

>Do ask: This role requires you to bend, lift, drive, work under pressure, do you have any pre-existing injuries which may impact on your ability to do undertake this role?

Examples

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>Don’t ask: Are you a member of a particular political party or church?

>Do ask: Our organisation advocates particular beliefs, do you have any difficulty working within this environment?

Examples

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>Questions unrelated to protected attributes are acceptable:> Did you have trouble getting here?

> What did you do on the weekend?

> Do you have any hobbies?

>Claims can be defended on the basis that there is a more suitable candidate

>Privacy obligations

BUT remember

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• Claim for adverse action, discrimination

• Reputational risk

Risks of getting it wrong

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What documents do I give prospective employees, and when?

>Documents to assist determinate if the candidate could undertake the role:> Position description

> Prior injury declaration form

> Consent to any particular requirements eg police checks

> Psychometric testing?

Determinate if suitable candidate

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>Documents to comply with legal requirements and protect the business: > Contract of employment/letter of offer

> Fair Work Information Statement

> Applicable modern awards and enterprise bargaining agreements

> Tax file declaration

> Superannuation fund nomination

Offer of employment

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>Documents about the workplace and how it works and expected behaviour, including:> Policies

> Procedures

> Code of Conduct

> Induction and training documents

Upon commencement

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• Policies may be incorporated into the employment contract

• You find out the candidate is not suited to the role (medical grounds, police check) after accepting an offer

• The employee commences without signing a contract and/or without seeing a position description

Risks of getting it wrong

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Can I rescind an employment offer that has already been accepted?

> Change of mind> Position no longer required

> Better candidate suddenly becomes available

> Candidate fails pre-employment check> e.g. police record or working with children check

> Something new about the candidate is discovered> Candidate might say or do something before

starting

> You might be contacted by old employer

Why withdraw an offer?

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> No unfair dismissal

> Discrimination or general protections claim if denied employment

> Are protected attributes or workplace rights part of the reason for rescinding the offer?

> Misrepresentation claim if they acted on the offer

> Has the candidate already quit their job or moved because of the offer?

> Did you make any representations to the candidate about the security of the role?

What are the risks of rescinding an offer?

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What are the risks of rescinding an offer?

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> Do you have a contractual right to not proceed with the employment?> Are there any relevant pre-conditions to employment

you can rely upon?

> Can you terminate the offer before the employment actually starts?

> Be wary about terms implying a certain length of employment

> Walker was employed by ABN AMRO> Offered employment with NatWest

> Walker negotiated that he would be promoted after one year and receive a fixed bonus in the first year

> NatWest’s standard contract terms allowed termination on one month's notice

> Walker then left ABN AMRO> NatWest withdrew offer

Walker v CitiGroup[2006] FCAFC 101

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Federal Court:> NatWest was not entitled to withdraw offer> Negotiated contract terms suggested Walker

would remain employed for at least 12 months> There was a 75% chance Walker would have

remained employed for four years> Walker awarded $2,346,553 for financial loss

and $100,000 for consequential damage

Walker v CitiGroup[2006] FCAFC 101

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> Have a contractual right to terminate the contract before the employment starts

> Be careful about contractual terms which guarantee a fixed period of employment

> Be careful rescinding an offer: > for something you already knew (or should have

considered)

> if there are protected attributes or workplace rights at play

> if the candidate has already acted on the offer

Managing the risk

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Do I need a reason to dismiss an employee during the probation period?

An individual cannot make an unfair dismissal claim if:> Employed less than 6 months

> 12 months for a small business

OR > Earning more than $138,900 per annum and

not covered by a modern award or enterprise agreement

Do unfair dismissal laws apply?

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> An employer takes “adverse action” against an employee if employment is terminated because the employee: > had a protected attribute; or> exercised, or proposed to exercise, a

workplace right

> Reverse onus of proof applies, penalties and damages

General protections

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> Annual leave

> Personal/carer’s leave

> Public holidays

> Industrial action

> Refusing to work unreasonable hours

> Refusing to perform unsafe work

> Exercising an Award/EA entitlement

> Right to make a bullying complaint

> Right to make WorkCover claim

> Right to make a complaint about employment

Workplace rights

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> Typically found in letter of offer, contract, award or enterprise agreement> Must provide minimum notice under the NES

> If not, the employee may be entitled to "reasonable notice"

> Even express rights can be qualified:> Pay attention to all of the contract, not just the

termination clause

> Policies, awards and enterprise agreements may also matter

Do you have an express rightto dismiss the employee?

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> David commences new job on 1 February

> Earns $100,000 per annum

> David works two weeks before putting in a WorkCover claim for a sore back

> Returns to work after two months

> Manager believes WorkCover claim is a sham

> Two weeks after David returns to work, manager wants to dismiss him

> Says David is not performing

The scenario

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>Unfair dismissal laws do not yet apply

> Is there a contractual right to dismiss?

>What is the reason for dismissal?> Poor performance?

> Making a WorkCover claim?

> A temporary absence from work?

>David may make a general protections or discrimination claim

Can David be dismissed?

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> Raise performance issues early (and often)

> Know why you are considering dismissal> Is there objective evidence to support that reason?

> Might there be another reason?

> Consider steps that can be taken to manage any risks

> Be careful about what reasons you give a dismissed employee

Managing the risk

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Can I bring a contractor or labour-hire employeein-house?

A "transfer of business" can occur when:> Company A outsources work to Company B

> The outsourced work is performed by Company B's employee

> Company A decides to cease outsourcing

> Company A employs Company B's employee to perform the previously-outsourced work

Can in-sourcing give rise to a "transfer of business"?

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> Company B's enterprise agreement will continue to apply to the transferring employee at Company A

> Company A must recognise any prior service with Company B unless:> Company A and Company B are not

associated entities; and

> Company A refuses in writing to recognise any prior service with Company B

What happens if there is a"transfer of business"?

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> Ms B was employed by Hays to work at ERGT under a labour-hire arrangement

> After three months, Ms B was offered employment with ERGT directly

> ERGT dismissed Ms B three months later

> Ms B made an unfair dismissal claim

> ERGT denied Ms B was protected from unfair dismissal

Burdziejko v ERGT Australia [2015] FWC 2308

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The Fair Work Commission: > Accepted ERGT and Hays had a genuine labour-

hire arrangement

> Ruled there was a "transfer of business"> ERGT initially outsourced work to Hays

> ERGT then employed Ms B instead of continuing to outsource work to Hays

> Counted Ms B's employment with Hays as employment with ERGT

Burdziejko v ERGT Australia [2015] FWC 2308

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> An in-sourced employee may later claim: > the former contractor or labour-hire arrangement

was a "sham"

> This is particularly a risk if:> They effectively worked full-time for you before

> Your staff treated them like employees

> They do not have an employment contract with someone else

Other risks

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> Have a good contract with a labour-hire company or contractor

> Ensure staff know the difference between employees and contractors

> Ensure that labour-hire companies have employment contracts with their personnel

> Confirm in writing whether prior service will be recognised when in-sourcing

Managing in-sourcing risks

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Questions?

Contact details

For more information about the services offered by Russell Kennedy, please visit us at www.rk.com.au

Libby Pallot

Principal

Ph: (03) 9609 1668

E: lpallot@rk.com.au

Abbey Sutton

Associate

Ph: (03) 8640 2312

E: asutton@rk.com.au