29 April 2019

Is Your Employment Function Running On All Cylinders?

Lachlan Thorburn, Michael Coates
Lachlan Thorburn Litigation Lawyer
Michael Coates Intellectual Property Lawyer

Employees are the lifeblood of any business. For your business to be successful, having your employment function operating seamlessly is vital.

How do you achieve this? Well, it all depends on where you are in your business lifecycle:

  1. Are you just looking to get started?
  2. Is your business new or recently established?
  3. Is your business mature?

This is important as it allows you to identify how established your employment process is and whether or not it is a) working for you and b) reflects your current business position. Also, do you have resources allocated to managing your human resources in a full or part-time capacity or do you, as a business owner, handle this yourself?

The employment function within your business should mature as time goes on. As it grows and expands, the needs of your business and employees will change, and it is vital that you manage this change effectively.

Understanding the employment journey

It’s quite easy to align your employment function alongside the growth and stage of your business. The list below demonstrates the process you should go through from start to finish with regard to its establishment and management.

  1. Understanding your workforce needs – structuring
  2. Documents, systems and processes
  3. Operations and day-to-day management – business health checks
  4. Manage end of the employment relationship
  5. Dispute resolution and litigation

Understanding your workforce needs

When you are looking to start a new business, understanding what your workforce should look like and how it should be structured is essential. Will you need full-time workers, part-time workers, contractors or casual team members? These decisions will have significant impacts on the range and type of documents, systems and processes you will need to adopt in the next stage.

In many cases, small and medium business operators fail to undertake the proper due diligence in understanding how their workforce should be structured and how it should operate. Assessing and identifying your workforce needs will also allow you to understand what sorts of regulations and awards you might need to adopt or comply with and what remuneration is to be paid. It also gives you some insight into what documents, systems and processes you need.

Documents, systems and processes

Getting this right from the outset is critical. Ensuring your human resources documents, systems and processes are created to support your overall business objectives, and are also legally compliant, will greatly assist in the efficient running of your business and will reduce risks later on. Documents, systems and processes include employment contracts for all employee or personnel types (full-time, part-time, casual, contractor etc.), workplace health and safety policies, policies dealing with appropriate behaviour and conduct in and associated with employment, and other important human resources documentation.

Investing the time and effort from the outset in getting this appropriately completed, and in line with legal requirements, is well worth the effort. Engaging the services of a qualified legal professional is highly recommended to ensure you and your business is protected.

Operations and day-to-day management

Managing the employment function on a daily basis can be daunting, especially if you do not have a dedicated human resources manager within your business. In many instances, issues and matters may arise which are outside your expertise. Depending on whether or not you have well mapped out documents, systems and processes, handling these can be fraught with danger. Mitigating risks and managing employee issues can always be outsourced to qualified legal professionals who can assist in navigating more complex problems. Alternatively, if you are looking to avoid issues arising, or if you’re trying to bring your employment function to best practice levels, undertaking a full business health check may be worth considering.

These health checks encompass a full audit and overview of your current human resource function including contracts, policies and procedures. The results of the health check can then be built into your business.

Managing the end of the employment relationship

The end of an employment relationship needs to be handled carefully, utilising proper processes. Depending on how this is handled, the chances of disputes arising can be greatly mitigated. Many issues need to be considered including:

  • Are you terminating the employee on performance-based issues?
  • Are you making the employee redundant?
  • Are you summarily sacking the employee due to misconduct

Depending on the avenue you are pursuing, different processes will be appropriate. If performance is an issue, have you been documenting and communicating issues of performance to the team member in question? Have you given him/her written warnings? Not following the correct procedure could result in the employee disputing the termination and making an unfair dismissal claim.

When making an employee redundant, it’s critical that, as an employer, you understand what constitutes a genuine redundancy. As with a performance-based dismissal, taking a process-oriented approach to redundancy will manage the risk of it being mishandled and potential disputes and litigation arising.

If it appears an employee has been engaging in misconduct, then usually it is appropriate that a proper investigation is conducted and the allegation of misconduct is put to the employee prior to making a decision on termination.

Engaging the services of experienced advisors prior to the commencement of the employment relationship will ensure you have the documentation and processes you require to reduce the risks of litigation down the track. However, circumstances do arise where you should consider obtaining legal advice to assist in managing termination or redundancy properly, and most importantly, in compliance with the law.

Manage disputes and litigation

Sometimes, disputes and litigation are unavoidable and your goal should be to minimise the damage to your business from a financial and reputational perspective. This is where seeking legal advice and assistance is important. An experienced legal advisor can guide you down the best path and work with you to get the best outcome for your business.

It’s also important to note that sometimes, through no fault of your own, an employee may raise a complaint or grievance. In some cases, this can be via the Fair Work Commission, Fair Work Ombudsman, Anti-Discrimination Commission, Human Rights Commission or even a Court of Law. If it does reach this point, it is highly recommended that you do seek legal advice as such proceedings can be costly, complex and incredibly time-consuming, ultimately distracting you from running your business!

Contact us today for more advice regarding your business’s employment function.

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The information posted on this website, or in links provided by this website, are not to be misconstrued as legal advice or a recommendation regarding any of the legal issues or problems described herein. Nothing on this site should be interpreted in any way as constituting the giving of legal advice, or the practice of law.


Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).

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