Cost cuts a risky business
Being creative could pave the way for a lawsuit, Debra Bela reports
MANAGERS and employers tasked with finding creative, money-saving solutions to address staffing issues are poorly trained and often unknowingly act outside the law.
Lawyers say it is leaving companies open to litigation.
Specialist people management and workplace law firm People & Culture Strategies says implementing contract variations such as demotions and salary freezes is acceptable only when the employee provides absolute consent.
Managing principal Joydeep Hor says managers must ensure they are operating within legislative guidelines as employees are three times more likely to seek legal advice over a demotion or perceived unfair dismissal than they were seven years ago.
‘‘ It would be fair to say there are very few managers at any level in corporate Australia who have the level of understanding around the laws related to people management, against what they are assumed to have in the eyes of industrial courts,’’ Hor says. ‘‘ People get promoted to managerial and supervisory roles on the back of technical and functional expertise without real regard to the calibre of their abilities as managers.
‘‘ Rarely is there any investment in substance and training them on what they need to know,’’ he says.
The absence of education in this field leads middle manager and senior executives to become more reliant on internal human relations departments for advice and support on demotions, salary freezes and reduced hours.
However, Hor says that even HR managers can be under-informed on legislative changes and contractual obligations. Managers also can be reluctant to engage the help of their HR department for fear of losing control of the process.
‘‘ Decisions are made on the fly,’’ Hor says.
‘‘ People don’t
WARNING: there’s any risk and throw caution to the wind, thinking maybe I’ll get away with it.’’
Hor says any workplace variation above 20 per cent of an employee’s normal duties is considered risky.
‘‘ People are far more aware (of their rights), they may have been burnt previously and there is far more information available to staff on their legal rights and responsibilities,’’ he says. ‘‘ Long-standing employees will have perfect paperwork relating to their changeover in managers or moving to electronic systems, employers may not.’’
Industries most at risk of undermining employees’ rights include traditional white-collar industries.
Proactive industries in workplace regulations include the blue-collar environments of manufacturing, mining and the health and safety sectors.
‘‘ What triggers people into a fight more often is the psychological mismanagement of staff,’’ Hor says.
Joydeep Hor is managing principal of People & Culture Strategies.