Unfair Dismissal Report - Essay Example

This case study is based upon Huang v Rheem Australia Pty Limited [2005]. The applicant complained of sex, race and disability discrimination duringwork and victimization for making a complaint about her treatment under the Anti-Discrimination Act 1977 The Respondent denied these allegations, citing the applicant's failure to comply with reasonable time-keeping as the reason for the applicant's dismissal. The Australian Industrial Relations Commission (AIRC) had to decide on a balance of probabilities whether the applicant had proven her allegations regarding unlawful discrimination and harassment taking into account all the evidence available to it. The key stake-holders in this case study are Xiu Zhen (Nora) Huang, the applicant, and various managerial level employees who were witnesses for Rheem Australia Pty Limited, the respondent. The Workplace Relations Act 1996 (the Act) allows an employer to lawfully dismiss an employee provided the dismissal is not: 1. Harsh, unjust or unreasonable (unfair dismissal); 1 2. in breach of discrimination provisions (unlawful termination); and/or 2 3. in breach of minimum notice provisions (unlawful termination). According to the Act, an unfair dismissal occurs when an otherwise lawful termination of an employee is judged to be "harsh, unjust or unreasonable" (s170CG(1)(b)). Unfair dismissal is the removal or forced resignation (constructive dismissal) of an employee when there is 1. No valid reason for it. 2. When correct, formal procedures have not been undertaken eg written warnings, time to improve performance, objective staff performance review And 3. The employee earns less than the set statutory amount, currently $66,220.00 4. Is a full time, permanent employee 5. Has been employed for at least 3 months before dismissal. A shorter or longer period may apply provided it has been agreed in writing before the employment begins. A period longer than three months must be reasonable given the nature and circumstances of the employment 6. Is covered by a federal award or agreement and whose employer is a constitutional corporation; or 7. employed in interstate or overseas trade or commerce as a waterside worker, maritime employee or flight crew officer; or 8. a Commonwealth public sector employee; or 9. Employed in Victoria or in a Territory. In determining if this has been the case, the Commission must have regard to a number of factors including: 1. whether there was a valid reason for the termination and whether the employee was notified of that reason; 2. whether the employee was given an opportunity to respond; 3. if the termination related to unsatisfactory performance by the employee and whether the employee had previously been warned about that unsatisfactory performance; 4. the degree to which the size of the employer's business, or the absence of dedicated human resource management specialists, may have had an impact on termination procedures. The AIRC hears cases which are still unresolved after going through the conciliation process. Its role is to decide, after hearing from both sides, whether the dismissal was harsh, unjust or unreasonable. It also exercises a range of powers under the Act in relation to ensuring the establishment and maintenance of fair minimum wages and conditions of employment, preventing and settling industrial disputes, facilitating agreement making between employers and employees, conciliating and arbitrating claims in relation to the termination of employees and dealing with matters concerning industrial organizations. The AIRC seeks to help employers and employees to reach a settlement in a way that minimizes legal costs and discourages vexatious and unreasonable claims. If matters are not settled, the AIRC will make a decision that is binding on both the employer and employee. Under the Act, the AIRC is responsible for conciliation in both unfair dismissal and unlawful termination cases. Only unfair dismissal cases, however, can be arbitrated in the AIRC. Procedural fairness has two meanings in this context. Firstly, one of the characteristics of a Tribunal is informality - which generally means excluding the rules of evidence, whilst retaining due process, natural justice or procedural fairness. The AIRC are required to do what is fair in the circumstances of each case. The onus is on yielding a fair result and if that requires greater formality then the AIRC will do so in order to establish any disputed facts. For example in the case study, the Tribunal arranged for the parties to agree the matters which were not in dispute prior to the hearing of the matter. Tribunal members hearing cases are also ready to help applicants to understand the issues in their cases and the procedures in the Tribunal where they can. In particular, Mrs Huang was given the opportunity to change her interpreter. The Tribunal also reminded the interpreter that he could ask to stop the proceedings if they were going too quickly for him to ensure an accurate translation of what was said. The Tribunal was of the view that it was imperative that Mrs Huang understood the proceedings as if it were her first language. Procedural fairness requires tribunals to be fair and impartial to all parties to any dispute and be careful that offers of assistance do not appear to extend to advocacy. For example, Mrs Huang was a litigant-in-person, who did not have English as a first language. In fact one of her witnesses, Mr Zhang explained to the AIRC that Mrs Huang communicated in her native tongue with difficulty. Secondly, the Tribunal will look to see that procedural fairness has been undertaken by the organization in its dealings with the dismissed employee. The AIRC will look for evidence of notice, warnings and whether the complainant was given an opportunity to respond. It does not concern itself with 'personality clashes' as such. In the present case it was said that Mrs Huang's line manager had a personal dislike of her, but the AIRC did not hold that to be significant as the law does not proscribed against personality clashes. In this context, procedural fairness relates to the process leading up to the dismissal of an employee and the AIRC will have regard to whether or not an employee has been afforded a "fair go" when it is considering an unfair dismissal claim. Notification The AIRC will consider whether the employee was informed of the employer's decision. It is good business practice to give the employee the reason(s) in writing for termination and for the employer to keep a copy for its own records. In this case, the AIRC were at pains to point out that the organization had not complied with its own policies in the handling of the applicant. For example, Mrs Huang had been asked to leave the site without any overt explanation of why this was. Opportunity to respond Giving the employee the opportunity to respond to the reasons given for dismissal provides fairness to employees who face losing their jobs. In this case it was particularly important as the reason was the employee's conduct or work performance as future prospective employers would require references. It is good business practice to keep a written record of the fact that the employee was given a chance to respond, and record the nature of any response. In the present case Ms Lejtman had kept a contemporaneous record of events which was crucial in determining on a balance of probabilities how the AIRC would resolve the dispute. In this case no reason was given at the time the applicant was asked to leave the site. Although Mrs Huang did not appear to have been formally dismissed, she interpreted the request to leave the site in this way. Although to a layperson being escorted off the premises by a security guard might look like a dismissal, the AIRC did not concern itself with that. They only tested it in the context of gender discrimination and found that giving regard to all the circumstances there was no discrimination in the way Mrs Huang was treated. Warnings There is no minimum or maximum number of warnings that must be given to an employee about unsatisfactory performance or conduct, though many organizations have a procedure of verbal warnings followed by written warnings as the matter escalates. This warning should: 1. clearly identify the problem and indicate what changes are expected; 2. state that dismissal might occur if the problem continues; 3. set time in the near future to review the employee's performance or conduct; 4. Specify a time for improvement and also make clear that dismissal could still occur in the review period if the employee's performance is unacceptable. A copy of a written warning is the best way to demonstrate that this procedure has been followed. Ideally this should be signed by the employee to acknowledge receipt. This was not done in this matter. Instead the applicant was subjected to a series of counseling sessions and meetings - - in a language she has difficulty communicating in. She was not represented at some of the meetings and was not invited to others. E-mail was used a lot to discuss her case, and she did not have sight of these e-mails until she had formally lodged a complaint. An employer might offer an employee the opportunity to have a representative, such as a union or workplace representative, in attendance at any counseling session. This should have been especially important since Mrs Huang clearly had a communication difficulty. Although the AIRC claimed to empathize with Mrs Huang's communication difficulties, it did not appear to give this important fact much weight, stating that she should have been able to deduce that there was no union representative present and that calling a security guard to escort an employee off the premises was standard procedure. There appears to be an assumption that employees of government agencies are above institutionalized discrimination. In industrial relations it is important to understand the meaning of 'award' and 'agreement' particularly as they apply to unfair dismissal cases. An award covers rates of pay and conditions of service. Awards set out minimum wages and conditions of employment for specified employees. Awards may be federal or State. Federal awards are made by AIRC. Federal awards normally cover key terms and conditions of employment. This includes: 1. minimum rates of pay and allowances; 2. overtime, shift penalty and other penalty rates; 3. hours of work; and 4. Leave provisions; eg sick/personal leave, recreation leave. Awards may also include provisions about specific issues such as superannuation or long service leave. More than one award may apply to an employee but provide for different parts of the overall employment package, e.g. the Clerks (ACT) Award 1998 provides for pay and conditions, and the Clerks (Long Service Leave ACT) Award 2000 provides for long service leave. The Act requires that federal awards are to be simplified so that they only include a safety net of minimum wages and conditions and do not regulate matters that are better dealt with at the workplace. The matters that may be included in an award have been limited to twenty 'allowable' matters: 1. classifications of employees and skill-based career paths 2. ordinary time hours of work and the times within which they are performed, rest breaks, notice periods and variations to working hours (but awards will not be able to set maximum or minimum hours of work for regular part-time employees) 3. rates of pay (such as hourly rates and annual salaries), rates of pay for juniors, trainees or apprentices, and rates of pay for employees under the supported wage system 4. incentive based payments (other than tallies in the meat industry), piece rates and bonuses 5. annual leave and leave loadings 6. long service leave 7. personal/carer's leave, including sick leave, family leave, bereavement leave, compassionate leave, cultural leave and other like forms of leave 8. parental leave, including maternity and adoption leave 9. public holidays 10. allowances 11. loadings for overtime, casual and shift work 12. penalty rates 13. redundancy pay 14. notice of termination 15. stand-down provisions 16. dispute settling procedures 17. jury service 18. type of employment, such as full-time, casual, regular part-time employment and shift work (but awards will not be able to restrict the number or proportion of these types of employees). Awards can include provisions selling a minimum number of consecutive or a regular pattern in the hours that a regular part-time employee works. 19. superannuation (The Government has introduced legislation to remove superannuation from allowable award matters, but this legislation has not been passed at the time of writing) 20. pay and conditions for outworkers but only to the extent necessary to ensure that their overall pay and conditions are fair and reasonable in comparison with employees who perform the same kind of work at an employer's business or commercial premises. Anti-discrimination clauses may also be found in an award. Awards can also include provisions that are incidental to these allowable matters and necessary for the effective operation of the award; for example, the date and period of operation of the award. The Federal and State workplace relations systems are administered separately. Federal awards are the responsibility of the AIRC. State awards are the responsibility of State industrial tribunals. Federal awards are generally made by the AIRC as a settlement of an inter-State dispute (a dispute involving employees and employers in more than one State). Victoria, the Northern Territory and the Australian Capital Territory are only covered by Federal awards and rely on other reasons as the basis for their Federal award coverage. State awards are made by State industrial tribunals. State awards are similar in content to federal awards, and also set out minimum pay and conditions of employment for groups of employees. A significant difference between Federal and State awards is the way they apply to employers: Federal awards or agreements can apply to an employer (and therefore relevant employees working for that employer) when: 1. the employer is specifically named in the parties bound clause; or 2. the employer is a member of a federally registered employer organization named in the parties bound clause; eg. the Australian Hotels Association; or 3. an employer buys a business that is already named in a Federal award - the award then applies to the new owner; or 4. (only in the ACT or NT) where the AIRC under s141 of the Act, declares an award to be a common rule award for a particular industry. In the ACT and NT 'Common Rule' awards can apply to all employees in a particular industry whether or not their employers are named in the award as being respondents to the award. A State award generally applies to every employer who employs a person in an industry or occupation covered by the award. An agreement effectively rewrites the conditions of service agreement and takes the form of a collective bargain between the employees and the employer, with the rights and duties of both sides carefully prescribed. An agreement has specific characteristics: 1. collective - can cover all or part of a business; 2. can be negotiated directly with employees or unions; 3. must be approved by the AIRC and 4. can replace awards, subject to a no-disadvantage test. The no-disadvantage test compares the proposed agreement with the award and other workplace laws. Agreements may contain particular conditions that are different to the award so long as employees are no worse off overall. Agreements can increase flexibility for individuals and workplaces through changes to hours of work, shift arrangements, overtime provisions and leave arrangements. For example, while the award may specify a standard eight hour day between 9am and 5pm, an agreement can vary starting and finishing times or have flexi time to help employees balance their work and family responsibilities. Unlike for most awards, pay increases in agreements can be linked to productivity increases. Agreements can include productivity bonuses or performance pay arrangements that are dependant on the achievement of preset performance targets. Agreements allow for more effective planning for businesses since labor costs are known for the duration of the agreement. Further, they provide for more certainty that work will not be disrupted as industrial action generally cannot be taken during the life of the agreement. In a recent piece of research Oslington and Freyns (2005) examined the Government's argument that employees who worked in very small firms (fewer than 100 employees) should not have the right to appeal against unfair dismissal before the AIRC. The reason stated by the Government was that unfair dismissal provisions stop firms taking on workers, and the burden falls most heavily on small business. The Prime Minister has claimed removing unfair dismissal protection for small businesses is the key to reducing unemployment below 5%, and a figure of 77, 000 new jobs created has been widely quoted by the government. According to their own research of 1800 organizations from the Sensis Business Index, representing a workforce of 33,356 full and part time Oslington and Freyns claimed that: employees average cost of an uncontested dismissal is $3,044 which represents 10.3 percent of annual wage cost, the average total cost of a contested dismissal settled through conciliation is $12,818 or 27.7 percent of annual wage cost, and for a dismissal requiring arbitration $14,705 or 35.7 percent of annual wage cost. Wage costs were weighted for each cost sub sample. Redundancies on average cost $18,900, or 35.3 percent of annual wage cost. These redundancy costs include procedural costs and any notice or severance payments. For all the costs there is some variation by occupation and industry, but the most interesting finding for the current debates is that there is no strong relationship between the costs and firm size [].If enterprises with less than 100 employees account for 51% of total employment then the employment impact of the proposed unfair dismissal changes would be to create about 6,000 jobs. The government see it as an issue which affects the quality of life in Australia - - not just the key stakeholders concerned in the dispute. Oslington and Freyns may argue the numbers but for the unemployed layperson who is actively seeking employment the government's argument is persuasive. Even Oslington and Freyns agree that altering the law on unfair dismissal will create additional jobs. What both the government and Oslington and Freyns are silent on is the type of jobs that will be created and the impact on employees of such employers. In the present case Mrs Huang was employed in a mind-numbing tedious and repetitive task. There had been a major change in comfort breaks at the organization and the employees had to take it or leave it. One must bear in mind that whilst we talk about awards and agreements for the majority of employees this really means signing on the dotted line rather than coming to the table with equal bargaining power. The fact is that the AIRC failed to protect Mrs Huang against an employer who cavalierly dismissed personnel who would not adapt to the change in culture, where the union representation was pretty poor and where understanding of the law on discrimination was somewhat suspect. It's clear on the facts that management closed ranks to protect itself and the AIRC unwittingly abetted this as it relied on the limitations of the anti-discrimination legislation to gloss over the facts that Mrs Huang had been shabbily treated. There is no argument that Mrs Huang was shabbily treated by her employer of more than 2 years. The point is that the legislation under which Mrs Huang sought solace does not protect against shabby treatment or victimization on the basis of personality clash. It is a scary scenario. Ms Lejtman is allowed to victimize all and sundry regardless of race, gender and color because the law will only act if one singles out a particular race, gender or color. [3280 words] References Key Features Of The New Federal Workplace Relations Law. Available at: www.nla.gov.au/dir Last viewed on November 17, 2005. Termination of Employment - General Information. Available at: http://www.airc.gov.au/procedures_container.htmlhttp%3A//www.airc.gov.au/procedures_and_legislation/termination_container.html%3Fhttp%253A//www.airc.gov.au/procedures_and_legislation/termination_of_employment/. Last viewed on November 17, 2005. Downes, G, (2004), Tribunals in Australia : Their Roles and Responsibilities, Australian Law Reform Commission's Journal Reform, Issue 84. Available at http://www.aat.gov.au/CorporatePublications/speeches/downes/tribunals.htm. Last viewed on November 17, 2005. Huang v Rheem Australia Pty Limited [2005] NSWADT 226 Oslington, P and Freyens, B, (2005), How Many Jobs Will Removing Unfair Dismissal Provisions Create, University of New South Wales. Available at: www.unsw.adfa.edu.au/sbus/pdfs/How_many_jobs.pdf. Last viewed on November 17, 2005. Read More