Fair Employment Seperation

Made redundant or fired?

When contemplating firing an employee, proper process must be followed otherwise there is the real risk of the employer facing an unfair dismissal claim.

To avoid the risk, some employers use ‘redundancy’ as an alternative to firing. It’s quicker, sounds nicer and is less painful to all concerned but often has a very poor outcome as happened in a recent Federal Court case.

The employer had sought to argue to the court that their principal motivation for making the employee redundant was financial, in that the Division in which the employee worked was running at a loss. It was claimed that they needed to make the employee redundant to cut costs.

Previously, the employee had had an ‘impressive’ career, but there had been some tension between the employee and their supervisor. A number of written complaints, including two accusations of bullying, had been made by the employee about the supervisor’s management practices.

Unfortunately for the employer, there was some evidence of animosity and information was found on the supervisor’s computer confirming that he had already begun making preparations for the redundancy of the employee.

The Federal Court found the employer had breached the Fair Work Act, fined them $37,000 and ordered them to reinstate the employee. The Court’s conclusion was the employee had unfairly been made redundant…”at least partly because they had been prepared to exercise their workplace rights by making complaints about the behaviour of their immediate supervisor”.

In a final observation, the Court warned the employer that the employee could have been entitled to compensation of up to almost $2million if she wasn’t reinstated.

Work Experience Liability

Differences in Liability

When employers provide work experience to school age students and unemployed people there are distinct differences with liability issues between the two groups.

With school students the employer is normally indemnified by the school that the student attends, together with relevant State Government authorities indemnification, in respect of any injury sustained by the student during the course of work experience.

That situation isn’t the same when it comes to providing work experience to unemployed persons to help them gain future employment in the workforce. Authorities such as WorkCover Queensland specifically exclude coverage for ‘non paid’ employees, other than full time school students, under the employers normal WorkCover Queensland Policy.

Employers should advise their insurance broker of their work experience engagement practices so that the existing Broadform Liability Insurers are made aware of the circumstances and can extend their Policies accordingly to note the inclusion of unpaid labour.

Employers should also advise the ‘unpaid worker’ of the potential exposures should they suffer a workplace accident or incident that results in their own injury. Consideration should be given to other policy coverage.

Policies such as Personal Accident & Illness or a similar product may then indemnify the ‘unpaid worker’ against injury or illness.

In all cases it’s prudent for any insured person or business to advise their insurance broker of any material changes to their business operation so that
the Insurers are made fully aware and coverage can then be tailored accordingly.