Procedural Fairness Explained
This article appears in the Mar/Apr 2016 issue of Business Franchise Australia & New Zealand
We often hear the term ‘Procedural Fairness’ as it relates to employees and dismissals. It tends to be presented as “employees need to be shown procedural fairness” or “the employer didn’t show procedural fairness”. Is it really important and do we really know what this means from a practical day to day perspective?
Let me start by making it very clear, following procedural fairness or not following procedural fairness in many cases is the difference between being successful in the Fair Work Commission when an ex-employee challenges their employment termination. Despite the fact you might believe you have 100 per cent clear evidence of misconduct, your failure to follow some simple procedural steps could result in the Fair Work Commission saying you have a valid reason for terminating that employee, however you didn’t follow the right process.
This is because the Fair Work Act specifically refers to the matters it must take into account when determining the harshness of a dismissal case. Over time, the expression ‘harsh, unjust or unreasonable’ has come to encapsulate what the Fair Work Commission examines and, in simple terms, the words mean:
• harsh — because of its consequences on the personal and economic situation of the employee or because it is disproportionate to the gravity of the alleged offence.
• unjust — because the employee was not guilty of the alleged offence on which the employer acted.
• unreasonable — because it was decided on inferences that would not reasonably have been drawn from the material before the employer.
Interwoven into this examination is the area of procedural fairness and its absolute relevance is demonstrated in the following case. An employee was dismissed for serious misconduct following an altercation with his supervisor, but was successful in his unfair dismissal application. The Fair Work Commission found that the employer had a valid reason to dismiss the worker, but the dismissal was nonetheless unfair due to deficiencies in procedural fairness.
This was because the Commissioner held that the employee’s dismissal was unfair because the company had failed to discharge its obligations with regards to procedural fairness.The key facts were that the employee had sworn at his supervisor and acted towards him in an aggressive fashion when approached by his supervisor to ask why he had not followed the job list the previous day. An argument ensued between the two men with the employee swearing and seemingly acting very aggressively towards his supervisor. This was not the first occasion the employee had received warnings for similar behaviour so on the surface, it would seem a very routine matter justifying termination.However, this was not the case as some key deficiencies were found to have occurred in the process.
For example, the Commissioner found the employee had not been given the full opportunity to respond to the allegations as they were put to him in the meetings. The employer had made its mind up prior to hearing from the employee about the facts of the incident and had in fact prepared the termination letter before its final meeting with the employee. In addition, the Commissioner also took into account evidence that the employer had not applied its disciplinary procedure consistently, and that this had resulted in the unequal treatment of the employee.
The employee was awarded a substantial compensation payout, not to mention the time and costs incurred by the employer having to defend its initial decision. It is clear to see that the element of procedural fairness plays a key role in determining Fair Work Commission decisions, but what does this mean for you as an employer from a practical ‘day-to-day’ perspective?
What should you be doing in your business to meet this standard of procedural fairness?
It is essential to have a process to follow each and every time you are dealing with a performance issue or an area where an employee may be guilty of misconduct. Have it clearly written so you know what do when the situation arises. Suggested steps to follow are listed below, but these are by no means exhaustive:
• Act promptly and communicate transparently in relation to all matters.
• Provide a minimum of 24 hours before any performance discussion.
• Advise the employee of what a disciplinary meeting is about rather than ambushing them with allegations at the meeting.
• Don’t deny the employee the opportunity to have a support person present if they have asked.
• Allow the employee to respond to all of the allegations put to them.
• Have all meetings and interviews documented, including details of who attended and agreed outcomes.
• Don’t make up your mind on actions to be taken before hearing what the employee has to say.
• Establish a paper trail of documentation that shows you followed these steps.
A broad way to look at this is to ensure the employee is provided with sufficient information to understand the nature and specifics of the allegations, and the information is sufficient for the employee to prepare and articulate a response to those allegations. Don’t simply go through the motions of giving the employee the opportunity to deal with allegations concerning their conduct when, in fact, a firm decision to terminate has already been made irrespective of anything the employee might say in his or her defence. These steps are not onerous and are really what every fair employer should do and that is to give each and every employee a ‘fair go all-round’.
Some of you might be thinking you are covered by the Small Business Fair Dismissal Code so this doesn’t apply to you, but actually and quite specifically, this area of procedural fairness is referenced within the Fair Dismissal Code, a code which applies to small business employers with fewer than 15 employees (calculated on a simple headcount of all employees including casual employees who are employed on a regular and systematic basis).
A snap shot of a few key parts of the Code is below:
A small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job. The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement. The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
In discussions with an employee in where dismissal is possible, the employee can have another person present to assist. A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including “Don’t simply go through the motions of giving the employee the opportunity to deal with allegations concerning their conduct when, in fact, a firm decision to terminate has already been made.” evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.
Procedural fairness is a process and series of steps all employers need to follow when disciplining employees in a clear and consistent fashion. Not only should you implement the steps referenced to comply with the Fair Work Commission or Small Business Fair Dismissal Code, you should do it because it’s the right thing for you as an employer in order to give each and every employee a ‘fair go all-round’.
Michael is the Principal Human Resources Specialist at HR Central, with 20 years HR experience in a variety of industries, nationally and internationally, including McDonalds, VECCI and the Coles Group. HR Central is an HR solutions provider, offering cloud based software teamed with accessible HR Specialist support. This service has been developed to help franchises manage all their HR requirements.