In the rush to terminate an employee, HR could find itself in the firing line

Do employers sometimes move too quickly to fire an employee without having all the facts to justify a dismissal decision?

“All the time,” says Julian Arndt, associate director Australian Business Lawyers & Advisors. “It invariably comes from pressure from management who either don’t understand or don’t care about the provisions of the Fair Work Act or the employment-related protections that employees have.”

The HR director knows the right thing to do – but is often forced into cutting corners by senior management. Rush to terminate can be advantageous, however, in some circumstances, when acting quickly and decisively is in the best interest of the company. This may be because the commercial dangers of keeping someone in the business outweigh the employment law risk employers might run if they act quickly. A sexual harassment risk, or a scenario involving employee dishonesty where a perception is formed by management that someone is stealing money, or information, or providing knowledge to competitors would fall into that category.

Unwanted media attention focussed on a particular employee that could damage a company’s reputation – or the prospect of the media discovering something unsavoury – is another call to act quickly. However, outside of these reasons best practice is to identify the risks and explain them to management to determine how urgently the business should act. If someone is over the income threshold of $162,000, they cannot bring an unfair dismissal case which means the company can proceed more quickly.

“It’s not risk-free but at least you can be a bit more decisive,” Arndt says.

Who said what, when?

Time to conduct a proper investigation is the primary reason for acting slowly. If an employment claim ends up before a tribunal or in court, it is how the organisation conducted its investigation and communication with an employee that will, among other things, determine whether a dismissal was justified, says Aaron Goonrey, Partner at Lander & Rogers.

If an employee is being dismissed due to poor performance, the employer must ensure that leading up to dismissal, the employee has been treated fairly, such as being counselled and given feedback about their work. If their performance has not improved, that should be made clear and the employee should be warned that the employer may consider terminating their employment. The employee also should be given an opportunity to respond when an employer is investigating either unsatisfactory performance or misconduct, even in cases of serious wrongdoing.

Following a fair process and being mindful of employee rights, will likely minimise the organisation’s exposure to litigation.

“Employers should also ensure that there are no unresolved workplace issues that had previously been raised by the employee lurking in the past. This could be entirely unrelated to the reason they are being terminated. If, for example, they have raised a workplace claim that was never investigated, they may choose to bring an adverse action claim after they have been dismissed,” Goonrey says. “The claim may, according to the employer, be unrelated to the reasons for dismissal. However, that does not prevent an employee from making a claim that the real reason for their dismissal was that they made a claim that was never resolved.”

Who investigates?

There is no doubt that senior management tend to shy away from internal investigations as they are time-consuming, often requiring witnesses to be brought in to be questioned. Arndt says that HR directors should focus solely on investigations to speed up resolution for both sides.

“Unfortunately, that means some of HR’s many other tasks need to be put on the back burner with all hands on deck for the investigation. It’s the reason why so many employers outsource to independent investigators – because that is all they will be doing,” Arndt says.

If an unfair dismissal case ends up before the Fair Work Commission members, lawyers or a judge, they will be sifting through the minutiae of the emails, timeline, chronology that the HR director sent to the employee and other witnesses and vice versa, analysing the process that was undertaken.

“The organisation wants to come out of that scrutiny with their head up, knowing that they took the right steps at the right time,” Arndt says. If the process is rushed through, it will most likely fail and fall back on HR. Arndt says he hears cases all the time where HR directors have been criticised for making poor decisions or submitting investigations that are flawed or writing correspondence that is unhelpful or inappropriate.

“That’s not because those HR directors are bad at their job, it’s because they are under pressure to get something done quickly or get to a result that management need and they haven’t had the time to put all the pieces together,” Arndt says.

That is what Fair Work Commission cases are often about: the process that an employer undertook to discipline or terminate an employee. And if the FWC finds fault in the process, the criticism is of the person undertaking that process.