Employers urged to avoid sky falling sentiment (6/6)

Written on the 6 July 2009

EMPLOYERS who dismiss staff over recession fears are discovering that knee jerk reactions are hitting them where it hurts — in the back pocket.

Research from Griffith Business School has shown that every time a person quits their job, it costs $9800 in recruitment and training costs.

According to Gold Coast employment lawyer Brett Wilson, employers should avoid ‘the sky is falling’ panic fuelled by fears of a recession and that dismissing staff should be a last resort option.

He says businesses contemplating staff cuts must consider whether redundancies are based on reality.

“Employers need to realise that if this happens, those laid off might seek redress through the unfair dismissal laws if they feel they have been dismissed for the wrong reasons,” says Wilson.

“Dismissed staff will also certainly demand their legal entitlements for holiday pay, sick pay and any other monies due to them.

This could place further financial pressure on a business, especially if the employer has been a bit lax about putting money aside for such things.”

Wilson blames the volatility in the employment law landscape on dated Howard government WorkChoice laws.

“There’s an assumption that employers with fewer than 100 staff can sack people without risk of any comeback. This is not so. Sacked employees are turning to the
Anti Discrimination Commission and also seeking common law remedies through the courts for breach of contract,” he says.

Several cases are now underway with more likely to follow. A recent example involved a man made redundant from his job ostensibly because of the economic crisis. He called at the office a day or two later, only to find a new employee at his desk, doing his job.

“If the employer thought he was being clever, he’s now going to have to deal with an unfair dismissal case,” says Wilson.

“I sympathise with the pressure employers are feeling, but it’s crucial they seek professional advice before implementing cost-cutting moves that might cost them more than they save.

“Any review of a business plan which includes dismissing staff needs to be carefully thought through. Employees will not just go quietly if they feel they have done nothing wrong and are being deprived of their employment rights.

“My general advice to employers at a time like this is to be fair with how you manage staff in any restructuring and have procedures in place to document any disciplinary or dismissal actions. This proof may assist you later if former staff take legal action over their dismissal.”

Wilson suggests employers exercise a calm and rational look at their operations and not be spooked into panic reactions.

“If an employer wants to lay off some people, there are set processes to be worked through. Just dismissing people could lead to unexpected costs that could be enough to send a business under,” says Wilson.


Latest News

BELLAMY'S FINDS EXPORTING BABY FORMULA INTO CHINA IS NO CHILD'S PLAY

BELLAMY'S (ASX: BAL) shares have suffered a 40 per cent drop in value today after the company hit a regulatory...

BRISBANE WATCH BRAND ADINA AIMS FOR ICONIC

ADINA watches is at a turning point in its history, 45 years after being founded by Robert 'Bob' Menzies i...

WHY YOU SHOULD CARE FOR YOUR BODY AS MUCH AS YOUR BUSINESS

ENTREPRENEURSHIP is a busy business. It can be all-consuming, but it is important not to neglect your health Y...

BULLETS BACK IN THE BUSINESS COMMUNITY

ALTHOUGH new to the current south-east Queensland sporting landscape, the Brisbane Bullets have a rich basketball ...

Related News

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

BIG W CEO QUITS AFTER 11 MONTHS

SALLY MacDonald has resigned as chief executive of BIG W ending her tenure at the helm of the struggling discount ...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter