Dismissal intentions a legal minefield

by 28 Apr 2009

A SURVEY has found employers are increas ingly changing their employment intentions in view of an impending recession, but lawyers warn that, despite recession fears, staff dis missal should occur only when all other av enues of survival have been pursued.

Deacon’s latest Workplace Pulse survey found that of 220 respondents surveyed, more than half had reduced the size of their work force in the last six months.

The survey, primarily conducted among human resources professions in February, suggested some serious changes in the em ployment outlook of Australian companies since August 2008, with 65 per cent found to be planning a review of their employment con tracts in the next six to 12 months.

But Brett Wilson, a principal at Aitken Wil son Lawyers, noted that businesses con templating staff cuts need to consider whether redundancies are based on reality or reces sion fears. He said that, already, there were plenty of employers using recession fears as an excuse for dismissing staff whom they later replace.

“Employers need to realise that, if this hap pens, those laid off might seek redress through the unfair dismissal laws if they feel they have been dismissed for the wrong reasons,” said Wilson.

Wilson also reminded employers that dis missed staff will almost always demand pay ment for all legal entitlements such as holiday and sick pay. Therefore, businesses might find themselves under further financial pressure when they dealt with dismissed staff.

Deacons added that new obligations com ing into effect 1 July 2009 might present fur ther challenges to employers looking to downsize – notably, a uni versal redundancy standard of up to 16 weeks’ pay. Meanwhile, Dea cons said employers would also be required to prove they had con sidered redeployment for dismissed staff in related companies, and that selections for redundancy would need to meet with applicable consultation requirements.

“Employers may find these obligations more difficult to satisfy and a greater number of redundancy dismissals may be regarded as un fair,” said Stuart Kollmorgen, workplace relations partner at Deacons.


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