Ross Crotty, of Lowndes Associates, advises what a business can do to avoid employment problems with newly employed staff.
KEY POINTS:
What is the first thing to do when taking on new staff?
The basis of a successful employment relationship is established by adhering to careful recruitment policies and not rushing. It is usually a matter of urgency because a staff member has suddenly left and needs replacing, or success with a new contract means more staff are needed immediately. Any failure to check references, particularly from a current or last employer, raises the odds a new employee will be unsuitable. Qualifications claimed by a prospective employee require verification. Also experience in the work skills needed for the position must be proven.
What should we do once we have made the decision to hire?
For employers, protection against an unwise employment decision is to use section 67 probationary arrangements. These are when the parties to an employment contract agree an employee will serve a probation or trial period at the start of the employment. The section says probationary arrangements must be specified in writing in the agreement, and the law relating to unjustifiable dismissal still applies when the employee is dismissed during or at the end of the period. It means the same rules of process and fairness operate in the probation period. It is just as difficult a process for employers to dismiss staff as if there was no such period. Many employers find it is not worth bothering with probation.
So what should employers do? And how long should the specified period be?
Employers should agree probationary arrangements and make the effort. It is cost effective to expend the time and resources in the early months rather than pay for it over the long term with an unsuitable employee who is hard to get rid of. It is true the effort means a careful setting of goals that can be measured in the first months, and a commitment to doing the measurement and giving feedback. Doing all that in a fair manner meets the requirements to justify a decision to dismiss at the end of the specified period. Those requirements are fair warning, obligations to communicate concerns, an obligation to supervise and review performance, and a fair process. The accepted wisdom for a probationary period seems to be about three months. Anything shorter is probably unfair to both parties, and six months or more seems to be too long.
Will something be done to improve probationary or trial period possibilities from an employer's view?
In overseas jurisdictions, including Australia, laws have been enacted to provide that termination of employment during a probationary period will not give rise to legal proceedings. In New Zealand, the National Party announced on July 24, as part of its employment and workplace relations policy, that it will introduce a 90-day trial period for new employees by agreement between the employer and employee, for businesses with fewer than 20 staff.
