Keep ＂mandatory terms＂ out of recruiters' contracts,澳大利亚豪力法律服务微信公众号文章

Employment lawyer's warning

A recent court ruling highlights the risks facing recruitment companies that incorporate workplace policies into employment contracts, warns an employment lawyer.

Holding Redlich senior associate Jennifer Teh told Shortlist incorporating company policies and procedures in the wording of individual employee contracts might suggest the policies have "contractual force".

"In reality, the employee can't then say, 'well you didn't actually follow the exact process that you set down in that policy for dealing with my complaint', for example, 'because you didn't have two meetings, you only had the one meeting'. So therefore you've breached that policy and breached the contract," she said.

"When you say the policies don't have any contractual force, whilst ideally the employer should follow their policies, it doesn't constitute a breach of contract."

This was illustrated in a recent dispute between Transfield Services and one of its recruiters, who claimed the company made his role redundant because he filed a bulling claim against his supervisor.

Transfield was ultimately successful in arguing the redundancy was due to a downturn in hiring demand, but Teh said the judge noted the company's redundancy policy – which formed part of his employment contract – was expressed in "mandatory terms".

These included phrases such as "Transfield must do this" and "it is necessary that the Manager discuss the proposal with HR".

"We tend to recommend that employers use more aspirational language. So, 'Transfield will endeavour to'," said Teh.

In a similar case in April, an employer was left more than $2.9 million out of pocket, after a court found a former executive's employment contract incorporated the company's unpublished redundancy policy.

Favourable finding hinged on complaint investigation

Employers must prove a redundancy is not for a "prohibited reason", such as exercising a workplace right to make a complaint, Teh said.

"It is very important, as most employers would know, that they do conduct a proper investigation into complaints of bullying and harassment, because without Transfield having done a proper investigation into the first complaint in this case, and communicating the findings to the [recruiter], I think there may have been a different result," she said.

Transfield investigated the recruiter's bullying complaint, clearly outlined the reasons for its findings and then acted upon them, which Teh said "gave credit to Transfield's process" and showed it had treated the recruiter fairly.

She said Transfield "did a lot of things right", including producing evidence to show the redundancy was based on a financial decision and not because the recruiter made complaints prior to his redundancy.

Follow all protocols prior to initiating a redundancy

Among the recruiter's allegations was a claim his employer took adverse action against him "because Transfield hadn't properly conducted a review of any alternative positions he could be redeployed to", Teh noted.

That claim failed because Transfield had a genuine reason to make him redundant, which the company was able to verify in court, she said.

"They had the documents to back up the validity of why they could cut costs by restructuring the

[recruiter's] team and making [him] redundant," said Teh.

Transfield also conducted a review of alternative positions, illustrating how important it is for employers to ensure "there is a proper process followed when they try and identify roles that an employee could be redeployed to", she said.

"They need to consider things like: what roles are available? Does the employee have appropriate skills and experience for those available roles? And would any retraining that's required be reasonable?" said Teh.

In Transfield's case, the recruitment team itself was managing redeployment options for the recruiter and the process was the same one applied for two other recruiters whose roles were made redundant, said Teh.

Transfield had "the right approach in balancing the needs of confidentiality versus following the redundancy policy as closely as they could, because the redundancy policy didn't actually specify in great detail how the review was to be conducted", she said.

"From my reading of it, it simply said a review needed to be conducted, and it was... So I think having flexibility in the policy is important."

Teh said the decision also highlights the importance of ensuring those who give evidence on behalf of the company provide fair and honest accounts.

In this case, she said, the recruiter's credibility was in doubt because "it was essentially a 'he said, she said' [situation]. The judge really didn't look too favourably on the [recruiter]".

"The judge was more willing to accept Transfield's evidence as being reliable, particularly because those who gave evidence were willing to accept when they may have been wrong in some instances or made concessions that actually favoured the [recruiter's] case."

Author: Jennifer Teh

* This article was originally published in Shortlist, a workplace and recruitment industry publication.

Contact details

Sydney

Jennifer Teh, Senior Associate

T: +61 2 8083 0418

E: Jennifer [email protected]

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