The Increasing Pressure on HR to Get it Right

When HR gets it wrong, the stakes are high. From unfair dismissal findings against a business to vicarious liability, the Courts and Tribunals in recent years have been critical in their decisions about the way that HR Managers and line managers have dealt with certain issues. Here we look at four key areas where practitioners and managers are most vulnerable and how to avoid these HR mistakes.

  1. Workplace Investigations

In the past couple of years, workplace investigations have become more common, and HR or line managers are usually tasked with carrying them out. However, acting as investigator requires a special knowledge, and the untrained HR manager or line manager might fall into procedural errors resulting in an unfair dismissal claim – or worse. There have been several such matters in recent times, including the Marriott matter that was reported upon in our last newsletter, and Parker Manufactured Products case that emerged in February.

  1. Underpayment of Wages and Sham Contracting

More concerning is the continuing trend of cases where HR managers have been held personally liable as an ‘accessory’ in workplace claims. In 2010, a Sydney HR manager was held liable as an accessory to his company’s unlawful sham contracting activities in a case before the Federal Magistrates Court. In a more recent case, an HR manager was held liable (along with the business) for underpaying wages to employees. These cases demonstrate that there is an expectation that an HR manager will know employment laws sufficiently enough to know if the law has been breached and advise decision makers accordingly, rather than acting with a “head in the sand” approach.

  1. Dismissal Matters

HR managers are not expected to be employment lawyers, but they are expected to understand the laws as they relate to serious decisions like dismissal. If there is any doubt about whether a situation justifies dismissal or the process to be followed, HR should consider seeking legal advice.

  1. Critical Note Taking

Management often requires difficult conversations with employees on issues including performance management, misconduct, dismissal or redundancy. Given the potential consequences, good notes of conversations are critical in case an employee chooses to make allegations or bring a claim down the track. If you are doing the talking and can’t take notes, have someone else in the meeting take notes, or be sure to write a full file note as soon as possible after the meeting ends.

The bottom line is that there is now a greater scrutiny by the Courts on the decisions and the actions of Managers, whether it is an HR manager or another manager tasked with dealing with a staff matter, and I have found in more recent years that the Courts decisions are being more openly critical of managers when they get it wrong. Just be conscious that how you handle a particular matter may at some stage be scrutinised in Court. The best advice is to seek advice if you are uncertain.

By Greg Arnold

Director and Principal Consultant

Effective Workplace Solutions

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