“387. Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal… [Fair Work Act 2009 (C’wealth)]”

The days of the “personnel department,” with its sole responsibility as the repository of employee information, has been consigned to history.  Human Resources Management has now evolved to the extent that it now “writ in law” (see above seemingly innocuous inclusion to the FWA).

For some years now HR has come under fire for not being “business focussed” to “too warm and fuzzy”.  Employees are confused – often mistaking the HR department as a pseudo trade union.

Greater focus has been placed on the HR department by external parties.  For example in the Centennial[1] case (relating to “sham contracting”), the HR Manager who was acting under the instructions of the sole shareholder and director of the company, was fined $3,750.00.  This was because the Court found that he was “knowingly concerned” in the company’s contravention of the (then Workplace Relations Act 1996).  This was in spite of the HR Manager (a) not having the knowledge of the requirements of employment law; (b) using company prepared templates which were then amended by the Director; and (c) acting under the direct instructions of the Director.

The court’s inference in this matter is that the HR Manager ought to have known the law and refused the unlawful and therefore unreasonable instruction of the Director.

This was the first HR Manager prosecution by the FWO, and according to the FWO – “will not be the last.”

Unfavourable comments about HR departments have been either insinuated or boldly stated in numerous court rulings and speeches by prominent persons.  The following are selected quotes from 2010 to more recent:

  • The Federal Magistrates Court[2] being highly critical the council’s employee relations practices, that were “…squarely at odds with any notion of fairness”. And later: “A general manager who does not appear to manage.  Human resources experts who are either silent as to the human impact of employee decisions or ultimately neglect fair process…”
  • Commissioner Hampton in the (then) Fair Work Australia (FWA) [3]: “The employer’s relatively large size and the fact that it had dedicated HR employees was also relevant…The irony is that in this case the lack of application of reasonable human resources practices has largely contributed to the making of this application.”
  • Federal Magistrate Lloyd-Jones [4] “the Court unfortunately sees too many instances similar to the matters in this case [that are] inappropriately and incompetently approached by persons who parade under the banner of Human Resources specialists.” (The HR Manager subsequently resigned)
  • Fair Work Ombudsman Nick Wilson[5] warned employers of under-resourcing their IR and HR functions, advising “I encourage you as a professional workplace relations practitioner to be careful about the risks of a corporately sanctioned ‘blind eye’ which could imperil your organisation’s reputation or may be unlawful.” (in reference to “sham contracting”)
  • FWA’s DP McCarthy[6]: “the company failed to respond to a letter of complaint from the employee after his sacking due to the injury…A prudent human resources approach would have been for Coles to meet again with the Applicant or at the very least respond to his letter…Coles chose to do neither…Coles is a large enterprise and has dedicated human resource expertise.”
  • FWA’s Commissioner Steel[7]: “…when the company’s HR department investigated the worker’s alleged misconduct, it had failed to provide him with policy documents that would have added substance to the indications by [the company] that the [employee’s] employment was seriously at risk of ending.

‘Given that [the company] is a large employer, with a substantial varied and diverse workforce and with a dedicated Human Resources team, such an approach is necessary and an omission in procedure.”

  • FWA allowed a lawyer to represent the company because the company’s HR manager was insufficiently experienced to ensure the company was effectively represented[8]
  • FWC Commissioner Cloghan[9]: “With such a size, and the nature of the industry of the Employer, a certain degree of human resources sophistication would be expected; none was evident.”
  • Queensland Civil and Administrative Tribunal member Gordon[10] whilst accepting that the employer’s HR department was “hard pressed, understaffed and overworked” found the investigation of a sexual harassment claim as “inept and unprofessional”. As a side bar, the employer was ordered to pay the applicant $35,490 and the “harasser” was ordered to pay $4,500.
  • An independent investigation of the CSIRO in relation to alleged workplace bullying as part of its 34 recommendations, included “ensure coal-face managers and HR staff are trained to ‘adopt reports of workplace bullying as its problem, rather than the individual’s.”
  • Federal Court Judge Raphael (in fining the company $50,000)[11] took into account the company had up to 700 employees, a HR team and in-house lawyer with “dedicated responsibility for compliance”. The Judge said that even though the contraventions were first offences, the court had to set a penalty that would “provide a wake-up call to the company and ensure management, including HR, understands and implements the industrial laws governing the workplace.”

To end on a positive note, it would appear that the HR department is being held to account – both operationally and professionally.  This means that HR professionals are obligated to ensure that:

  • They keep up-to-date on ever changing workplace laws and ensure that they are applied to their workplace
  • Investigations are carried out by experienced professionals
  • Due process is followed. This means that polices should be implemented taking into account the requirement of the law
  • Where there are experiential gaps, either set out to gain this experience (or training) or outsource to the experts
  • At all times act professionally, even this may be at odds with the company’s wishes (that is, educate the company on lawful practice and refuse unreasonable and unlawful instructions)

The most valuable tip is to be aware of “what you don’t know” and never be shy to contact who does know.  I like most people do not know everything, and I have built up a good number of contacts who fill in those gaps.  Please feel free to contact me to see if I can assist.

[1] Fair Work Ombudsman v Centennial Financial Services Pty Ltd (2010) 245 FLR 242

[2] Cook v Oberon city council [2010] FMCA 624

[3] Maria-Anna Owens v Allied Express Transport Pty Ltd [2011] FWA 1058

[4] Vong v Sika Australia Pty Ltd [2011] FMCA 276

[5] Speaking at an IT conference in Canberra 4 May 2011

[6] Mr David Mitchell v Coles Group Supply Chain Pty Ltd T/A Coles Liquor Group [2011] FWA 3162

[7] Mr Anyuon Mabior v Baiada Group Pty Ltd T/A Adelaide Poultry [2011] FWA 5778

[8] CEPU v UGL Resources (Project Aurora) [2012] FWA 2966

[9] Darrel Duke v Central Norseman Gold Corporation Limited [2013] FWC 2993

[10] McCauley v Club Resort Holdings Pty Ltd (No 2) [2013] QCAT 243

[11] Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Limited [2014] FCCA 251

Greg Reiffel Industrial Relations & Human Resources Consulting has been providing the following services to businesses for over 30 years:

 

  • General HR and IR advisory service.
  • Fair Work Commission representation (eg unfair dismissals, adverse actions, etc.).
  • Workplace investigations and mediations.
  • Policies and procedures.
  • Discipline & Termination.
  • People Audits (are you at risk of prosecution?).
  • Enterprise Agreements, Contracts of Employment, Individual Flexibility Agreements.
  • On-site HR services.

Contact Greg on 0438 906 050 or mailto: greg@gregreiffelconsulting.com.au.