Human Resources Consulting for Brisbane

Employer Updates

In this issue

Taking longer to find staff?
Employers warned to keep promises
Going through the motions
Employers, Contractors and OH&S make sure you’re covered

Taking longer to find staff?

The skills shortage is costing small business and most of this cost is due to the extra time and effort now required to find the right person for the job, rather than better pay and conditions.

More than half of small to medium-sized enterprises (SMEs) now report that the talent shortage is limiting their ability to recruit suitable staff and the time taken to recruit a new employee has increased to six weeks.

The interview process is now a two-way street and savvy SMEs are using the interview process as an opportunity to make a positive impression on candidates.

“The recruitment process is very important in shaping a candidate’s view of the business”, said Craig McFadden, Managing Director of Savvy Human Resources. “As a SME, if your recruitment process is not effective you risk losing good candidates to an alternate company or competitor”, Mr McFadden said. “Future employees are critical to the business so you must be honest and do the best to impress and treat every candidate as a potential customer”.

SMEs can reduce angst by using recruitment techniques such as behavioural-based interviewing, which help to pinpoint a candidate’s ability based on past experiences and determine whether they have the right “fit”. This approach is becoming widespread, but is not fully understood as the value is in the recruiter’s ability to ask deep and probing follow-up questions to elicit the details interviewers need to choose the best candidate.

McFadden says it is critical to ask detailed questions of referees about the candidate’s technical skills, their ability to maintain positive relationships with other employees and about their last performance review. Also, it is important to review the job description before starting to recruit as expectations of what the person will bring to the position may have changed over time. Further, when a particular role has a high turnover you may need to introduce job rotation or redesign the role so that there is more variety to help retain staff.

Referrals from existing employees are often a primary source of job candidates and word-of-mouth can be a huge benefit in attracting quality candidates, but it can also be very detrimental if employers fail to follow through on promises or are not delivering a positive working environment. “If your current employees feel valued and happy, then they will be the businesses best advocates”, says McFadden.

This publication is provided by way of general guidance only and is not to be construed by the reader as legal advice or as a recommendation to take a particular course of action in the conduct of their business or personal affairs. You should not rely upon the material as a basis for action that may expose you to a legal liability, injury, loss or damage and it is recommended that you obtain your own legal advice relevant to your particular circumstances. Savvy Human Resources Associates Pty Ltd and their agents Disclaims All Liability For Any Loss Or Injury Suffered, Howsoever Caused, As A Result of Relying Upon The Content Of This Publication In The Making Of Any Commercial Or Personal Legal Decisions.

Employers warned to keep promises

Two recent decisions of the Federal Court serve as a warning to employers to adhere to their workplace policies and honour the promises they make to current and prospective employees.

In both cases, the employer was held to be bound by the promises it made in general company policies even though the promises were not expressly included in the employment contract and the employers were held to liable to pay substantial damages of between four and five years’ pay with interest and future loss of income.

Given the restrictions on unfair dismissal claims imposed by WorkChoices it is likely that employees will increasingly look to civil proceedings for breach of contract.

These cases demonstrate that employers need to ensure that they treat employees appropriately in performance management and grievance investigation processes and also carefully review how they draft their employment contracts and policies.

They also demonstrate how mishandling of a formal compliant about co-workers intimidating and threatening behaviour can lead to sizable damages being awarded – in one case $515,000 plus costs. There is also an added cost to the business beyond financial penalties – bullying and harassment leads to unmotivated staff, increased absenteeism and higher staff turnover. An employment contract that provides for an annual performance review and none is conducted may also leave an employer open to a breach of contract claim.

In the first case the employee had lodged a grievance against a fellow worker which was not investigated or resolved in a timely manner. The employee later claimed he suffered an illness that resulted from his former employer failing to adhere to its policies about provisions of a safe and healthy workplace, preventing harassment and handling grievances.

The Supreme Court of NSW also recently found that employers have an implied duty of good faith, and mutual trust and confidence even where there is no written employment contract. In a separate case an employee was reinstated and then sought damages including $350,000 in costs following the employer’s delay in commencing a misconduct investigation and its failure to interview a key witness face to face.

Following these cases it is clear that provisions in workplace policies can be legally enforceable as contractual provisions and employers should take care in drafting employment contracts and policies so as not to be left open to breach of contract claims. Employers should carefully consider their dealings with employees so as to ensure they are acting in good faith otherwise their actions may lead to an order for damages to an affected employee.

Going through the motions

Employees who are genuinely sick, but continue to show up for work are costing their employers almost four times more than those who stay home to recuperate.

A new report, commissioned by health insurer Medibank Private, showed that “presenteeism” - where employees turn up to work but cannot function properly because they are ill – last year cost Australia’s economy an estimated $25.7 billion with employers bearing the brunt of lost productivity to the tune of $17.6 billion a year. That drop in productivity is equal to each employee missing six days of work per year.

Previous research by Medibank Private suggested absenteeism, where sick workers stay at home, cost Australian businesses about $7 billion each year.

The research found that while 53 per cent of staff had taken at least one day off in the previous four weeks, 77 per cent said they had gone into work while suffering a health problem. Of those who had gone in to work, 88 per cent said they felt less productive and, on average, their productivity nearly halved.

The report found sick employees worked slower, needed to repeat tasks and made more mistakes than healthy colleagues and that unhealthy lifestyles, allergies and asthma, poor work-life balance and sick employees spreading infections all contributed to the problem.

Presenteeism relates to the productivity of a worker and is a vicious cycle – if we are less productive at work, we stay up late that night to catch-up, which affects our sleep which then affects our productivity the next day.

The term “presenteeism” also describes those employees who attend work when they are actually unmotivated to perform and can be associated with poor working conditions or poor management practices.

This latest research shows the direct impact on staff retention and overall business performance. Employers need to look at a range of factors that influence their employee’s health and well-being and tackle those underlying workplace issues.

It can be a risk to the business if employers avoid dealing with the core causes of presenteeism and absenteeism which usually involve better employee-employer relationships and ways to handle work-load and external responsibilities.

According to a previous survey almost half of Australian workers admitted to taking bogus sickies and many confessed they took time off to cope with demands on their life outside work. Employees with greater sick leave entitlements took more leave. Most small business owners tend to avoid difficult conversations as they feel they don’t have the skills to manage absenteeism or haven’t collated the data to manage the problem.
The Medibank Private study urged employers to invest in health and wellbeing programs for employees and suggested offering flu vaccinations, self-assessment tools, counselling for workers, encouraging recreational activities for employees in breaks and providing fruit as examples of measures employers could take that were a win-win for business and employees.

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Employers, Contractors and OH&S: make sure you're covered

Business owners must take an active role in managing Occupational Health & Safety and not take for granted their contractor’s OH&S credentials or rely on the expertise of contractors alone.

A recent decision by the NSW Industrial Relations Commission demonstrates that an employer cannot contract out their responsibility for Occupational Health and Safety and those employers engaging contractors must require written procedures before commencing any contracted work, verify their safety and nominate a suitably qualified supervisor.

“The ever-changing OH&S legislation demands businesses devote more time and resources to managing OH&S, yet many small businesses do not have such resources or do not fully understand their obligations in relation to the OH&S legislation. They rely on their contractors to ‘do the right thing’ and incorrectly assume they won’t be liable if something goes wrong”, said Craig McFadden, Managing Director of Savvy Human Resources, a Ballina based human resources consultancy.

The case involved a major transport company that contracted with a fuel supplier to remove fuel from an underground storage tank. The company agreed on a compliant method and was assured that the contractor had the necessary expertise and that an appropriately qualified person would be present to supervise the operation. Unbeknown to the company, the contractor then sub-contracted the operation. During the operation an employee of the sub-contractor decided the method was too slow and used a quicker, more dangerous process. This resulted in an explosion in which a worker suffered serious burns to his face and chest.

The fuel supplier was fined $240,000 for its role in the incident and the transport company was fined $150,000 (out of a maximum of $825,000).

Mr. McFadden said that employers should ensure that:

the contractor sets out a safe work procedure in writing prior to commencing work;
the procedure is approved by an appropriately qualified person; and there is an appropriately qualified supervisor present for the entire period of the work.

“Employers should also be aware that their lack of knowledge about the work being completed and their attempts to engage appropriately qualified contractors with good safety records will not relieve them of their obligations and they may still be in breach of the Occupational Health & Safety Act and be penalized accordingly. Employers should consider all preventative measures as the availability of those measures may later be evidence of their failure to fulfil their OH&S obligations”, said Mr. McFadden.

“An employer’s obligation to identify, control or eliminate risks extends to the work being conducted and the workplace. Failure to do so may result in a criminal conviction, large fines or even imprisonment”, Mr. McFadden said.