Human Resource In Organisation - Catastrophe Concept - Case Study Example

Making human resource decisions can sometime be complicated (Stone 2008). As seen in this document, terminating an employee’s employment successfully to avoid substantiated legal claims requires various considerations. After a serious downturn at Catastrophe Concept, Karen’s boss want how to terminate Karen’s employment. There are various factors to consider given the fact that Karen had not breached her employment contract and had no serious misconduct. Moreover, concerning her employment status, she is a senior staff. Note that her employment contract was only a letter welcoming her to the company. The Workplace Relations Act would be useful in evaluating various options that would allow a successful termination. These options include termination under the basis of breach of contract, redundancy, misconduct, performance, and by issuing a reasonable notice. In addition, it would be advisable for Catastrophe Concept to make legitimate restraints on Karen against working for a competitor, soliciting and poaching its employees, and exposing or using confidential information. The consequences that would result in case Karen contravened these restraints are also explored, and a example of a restraint trade clause given. It is possible to terminate successfully and within the legal provisions Karen’s employment under the prevailing circumstances. It is worth to note that the Workplace Relations Act that governs employer-employee relations protects employees against unfair dismissal, but also makes provisions under which an employment can be terminated. In this respect, therefore, it is crucial to consider certain key factors relating to Karen that would allow termination of her employment. First is that she had no serious misconduct and has not breached either express or implied terms of employment contract. In fact, there are no express terms agreed upon during her coming on board. Even so, the provision under breach of contract requires that the employer pay certain amount equivalent to “her outstanding annual and long service leave entitlements” (GWADCEP 2008). On the other hand, instant dismissal would be possible if her conduct was serious enough to threaten mutual confidence and trust between her and the company. Therefore, it is not appropriate to base her termination on breach of contract or instant dismissal. There are also other provisions for employment termination that do not apply under Karen’s circumstances. Given that there is no existing written agreement detailing the period of her employment, and since the company is still operating, it is would not be lawful to terminate her employment is merely because the company experienced a down turn in sales. In addition, her circumstances would not fully justify the provision under redundancy since the company might need another sales manager. Redundancy applies when there are “genuine operational reasons” such as structural, technological, or economic reasons (GWADCEP 2008). What would have been most applicable as the basis for her termination is her performance, although certain circumstances outlaw that. It is apparent that the sales have been declining and this could indicate poor performance. However, the dilemma with this approach is lack of written evidence. The company’s record indicates that her performance is acceptable. Under the terms provided in the Workplace Relations Act, Karen is entitled to know if her work performance was not satisfactory, “given a chance to implement change and be warned if her performance is still unsatisfactory” (GWADCEP 2008). Furthermore, there ought to have been written records of these actions by the employers that Karen has signed accordingly; nonetheless, that is not the case. Therefore, considering all these circumstances and the limitation of the provisions, the only successful way to terminate Karen’s employment is by issuing her with a reasonable notice. Three keys elements describe a reasonable notice. These include the age of the employee, length and status of her employment (Wilson 1958). Since Karen has worked for eight years with Catastrophe Concept, The reasonable notice must be issued at least four weeks (GWADCEP 2008) before the termination of employment. In addition, if Karen’s age is above forty-five years, the reasonable notice would have to be issued fives weeks prior to the termination; that is an additional one week to the minimum period on notice. The seniority of her service demands that the period between her dismissal and issuance of the notice is longer than stipulated under normal circumstances, or rather under the Act (Robert 1995). These entitlements are only minimal and critical in case an employee decides to take court action. It is common for human resource managers to get concerned over other aspects such as conditions in the labor market, and socio-economic justice prior to dismissing an employee (Lam & Devine 2001. The concern on socio-economic revolves around the idea of issues such as reasons for termination and a company’s financial position (Lam & Devine 2001). Other considerations that may encourage Karen to make claims under unlawful dismissal include aspects such as whether she was induced into leaving her previous employment and if alternative employment are availability for her given her qualifications, training, and experience (Robert (1995, p. 271). Catastrophe Concept has also an option of paying Karen “in lieu of a notice” (Riley 2006), especially since a notice had not been issued early enough. The payment worked must also comply with the terms under the Workplace Relations Act (GWADCEP 2008). There are four standard forms of restrictions that can apply to Karen in the even that she left Catastrophe Concept and joined a competitor. These include one, the restrictions to work for a competitor; two, restriction to poach customers or clients from former employer; three, restrictions to deal with former customers or clients irrespective of who approaches the other; and restrictions on employees of a company that a former employee dealt with. Thus, Karen could be restricted from canvassing, soliciting, or approaching Catastrophe Concept’s customers or clients for a reasonable amount of time as well as from disclosing or using confidential information, or from working for a Catastrophe Concept’s competitor for a reasonable amount of time. It is worth to note that these restrictions are valid and acceptable on legal grounds if they are reasonable (Beale, Bishop & Furmston 2007). The basis to determine if a restriction is reasonable include the theme of the restriction, area and time that the company is operation, nature of the business, the industry under which employer company is operating, relationship between employer’s customer or clients and the employee, and the nature of duties that the employee performed. It is also crucial that the need for Catastrophe Concept’s to safeguard its interests outweighs Karen’s freedom to have a livelihood. For instance, it would be reasonable that the restrictions serve to protect Catastrophe Concept’s from completion. There are consequences that would occur to both Catastrophe Concept and Karen if she provided to another employer confidential marketing information related to Catastrophe Concept. The consequences for Catastrophe Concept would be mainly on the loss of key business secret including business connections. As a result, Karen’s new employer might use the information to gain competitive advantage over Catastrophe Concept, or even maliciously to harm our business. On the other hand, Karen would have contravened the law provision under the Workplace Relations Act that protects employers against threat of their legitimate interests during such circumstances. In this case, Karen would be liable to a lawsuit that would see Catastrophe Concept awarded for damage, and Karen restrained and suffers other legal actions. Luring away and hiring other staff currently employed by Catastrophe Concepts could lead Karen into legal consequences. Catastrophe Concepts have the right to apply for an injunction to stop and restrain Karen from such an action. These could also mean other legal consequences such as payment for damages to the company. However, it is worth noting that such restrictions apply if they are valid and reasonable. In this regard, since Karen had been dealing directly with customers and clients, Catastrophe Concepts has a legal claim; otherwise, it would be difficult to enforce restrains if she had no such contacts. A restraint of trade clause ought to have been included in Karen’s original written contract. As a suggestion, a restraint clause could seek to restrain Karen from taking up any employment from a company that has similar business as Catastrophe Concepts and that operates within Queensland for a period of six months. In addition, the clause could restraint Karen from engaging in a rival business as well as from interfering or soliciting clients or customers, employees and designers of Catastrophe Concepts within Queensland before six months since her employment termination are over. Given the above information, it would be easy for Karen’s boss to decide how to terminate her employment successfully. Since, she had not breached the contract nor had any serious misconduct and that she was a senior staff, terminating her employment through reasonable notice is the only option, and the notice must be issued on time considering these factors. What is more, Catastrophe Concept could make restraints on Karen against working for a competitor, soliciting and poaching its employees, and exposing or using confidential information. Otherwise, Karen might suffer legal consequences that might see Catastrophe Concept being awarded for damages. An example of a trade restraint clause References Beale, H G, W. Bishop, D & Furmston, M P 2007, Contract, Oxford University Press, Oxford, p 1119. Government of Western Australia, Department of Consumer and Employment Protection (GWADCEP) 2008, “Termination of employment.” A Guide for Incorporated Associations,. Lam, H & Devine, K 2001, Reasonable Notice for Wrongful Dismissal: Court versus Human Resource Decisions, Relations industrielles / Industrial Relations, vol. 56, No. 2, pp. 365-393. Riley, J 2006,Termination of Employment: Profiles of National Legislation - Australia, International Labour Organization, 28 July 2009, . Roberts, G 1995, Character of employment and wrongful dismissal notice: Cronk v. Canadian General Insurance Co., Dalhouse Journal of Legal Studies, vol. 4, p. 271. Stone, R 2008, Managing Human Resources, 2nd edn, John Wiley & Son, Milton. Wilson, J. F 1958, Restraint of Trade. A New Form of Covenant, The Modern Law Review, vol. 21, no. 1, pp. 88-90. Read More