The government has announced a proposed update to the Employment Relations Act that will give more weight to an employee’s behaviour when awarding remedies for personal grievance claims.
This is the second reform made public as part of the Employment Relations Amendment Bill that the coalition government plans to introduce to parliament next year (the first was a proposed $180,000 income cap for pursuing unjustified dismissal personal grievances).
While we won’t have the full details until the legislation is introduced, let’s have a look at what has been announced so far.
Strengthening employee accountability
In announcing this amendment, Workplace Relations and Safety Minister, Brooke van Velden said it was “important employees are not rewarded in the personal grievance system for poor behaviour or performance”.
The proposed change will give more consideration to an employee’s behaviour when awarding personal grievance remedies.
This includes:
- Removing all remedies for employees whose behaviour amounts to serious misconduct, even where the employer did not follow a fair process for managing the issue.
- Removing eligibility for reinstatement in a role and compensation for hurt and humiliation when the employee’s behaviour has contributed to the issue, for example repeated instances of poor performance.
Currently, the Employment Relations Act allows the courts to make reductions to remedies when the employee contributes to the personal grievance, but case law has established a 50% ceiling on remedy reductions.
Other proposed changes will affect personal grievance outcomes, including:
- Allowing remedy reductions of up to 100 percent where an employee has contributed to the situation which gave rise to the personal grievance.
- Requiring the Employment Relations Authority and Employment Court to consider if the employee’s behaviour obstructed the employer’s ability to meet their fair and reasonable obligations.
- Increasing the threshold for procedural error in cases where the employer’s actions against the employee are considered fair, meaning that employers can make bigger mistakes in their processes without penalty later down the line.
Ms van Velden said the changes are aimed at strengthening employee accountability and increasing “certainty for employers so they can focus on their business”.
My view
I’ve keen to see more of the nitty-gritty of this change, but right now I’ve got mixed feelings about how it may play out.
On the one hand, employees who behave (or perform) like dickheads shouldn’t be rewarded with big payouts. On the other, all employees should be entitled to due process, and compensation of some kind if they aren’t afforded that fair process.
To draw an analogy with the criminal justice system, this is why we don’t send people straight to jail, even if there’s black-and-white evidence of them assaulting the barista who didn’t get their cappuccino just right.
We’ve decided that everyone is entitled to a fair process, which (among other things) gathers relevant information, considers the accused’s side of the story, and weighs all factors before coming to a reasonable conclusion. These same principles are baked into our employment laws.
Philosophising aside, there are some practical questions here that will need answers. Most immediately, what counts as “serious misconduct” (and therefore justifies a reduction to 0% of remedies regardless of the conduct of the employer)?
The government has identified examples of serious misconduct to include violence, bullying, harassment, fraud, theft, dishonesty, or using illegal drugs at work. But the category of ‘serious misconduct’ is deliberately broad, and can describe any behaviour which significantly undermines the trust and confidence which is central to the employment relationship.
Further, employers may feel emboldened to take procedural shortcuts, and dismiss employees quickly, when they are confident the issue amounts to serious misconduct.
Employees may also become gun-shy of raising personal grievances when they are substantially in the wrong, even if the employer hasn’t followed a text-book process.
Process will still be key, I expect, and employers could face heavy penalties for conducting an unfair process when the issue turns out not to be serious misconduct, or when they didn’t have all the necessary information to hand because of brief (or non-existent) investigation procedures.
Watch this space.
