MANAGE SEPARATION OR TERMINATION FACILITATOR MANUAL WITH SIMULATED ONLINE BUSINESS ASSESSMENT BSBHRM507A

MANAGE SEPARATION OR TERMINATION FACILITATOR MANUAL WITH SIMULATED ONLINE BUSINESS ASSESSMENT BSBHRM507A

Precision Group (Australia) Pty Ltd 44 Bergin Rd, Ferny Grove, QLD, 4055 Email: info@precisiongroup.com.au Website: www.precisiongroup.com.au BSBHRM507A Manage Separation or Termination ISBN: 978-1-74238- Copyright Notice No part of this book may be reproduced in any form or by any means, electronic or mechanical, including photocopying or recording, or by an information retrieval system without written permission from Precision Group (Australia) Pty Ltd. Legal action may be taken against any person who infringes their copyright through unauthorised copying. These terms are subject to the conditions prescribed under the Australian Copyright Act 1968. Copying for Educational Purposes The Australian Copyright Act 1968 allows 10% of this book to be copied by any educational institute for educational purposes, provided that the institute (or the body that administers it) has given a remuneration notice to the Copyright Agency Limited (CAL) under the Act. For more information, email info@copyright. com.au or visit www.copyright.com.au for other contact details. Disclaimer Precision Group has made a great effort to ensure that this material is free from error or omissions. However, you should conduct your own enquiries and seek professional advice before relying on any fact, statement or matter contained in this book. Precision Group (Australia) Pty Ltd is not responsible for any injury, loss or damage as a result of material included or omitted from this material. Information in this course material is current at the time of publication.

Table of Contents 2 Legend 3 Qualification Pathways 4 Qualification Rules 5 Introduction 7 BSBHRM507A/01 Develop Policies and Procedures for Separation/ Termination of Employment Key Points Undertake research to determine features of best practice systems of separation/ termination and the legal requirements Undertake consultation with relevant managers prior to the introduction of new forms, procedures or systems Develop policies, procedures and supporting documentation for all forms of separation/termination Ensure procedures for dismissal or termination respect employees, provide strict confidentiality and comply with legislation Obtain support for separation/termination policies and procedures from senior managers Communicate policies and procedures and supporting documents to relevant personnel Use feedback to make refinements to policies, procedures and supporting documents for separation and termination 17 True or False Quiz 19 BSBHRM507A/02 Manage Separation/Termination Processes Key Points Develop a redundancy or redeployment plan Manage redundancies and redeployment and provide relevant information about processes so that work outcomes are not compromised Provide outplacement or other assistance in accordance with organisational policies and legal requirements Ensure that dismissals for incapacity to perform or misconduct comply with legislative and organisational requirements Ensure that human resources staff, managers and supervisors have necessary skills and knowledge to take disciplinary action Review workforce data for predicted numbers of people retiring and make necessary plans Review and evaluate separation/termination procedures regularly and introduce improvements 25 True or False Quiz 1

27 BSBHRM507A/03 Manage Exit Interview Process Key Points Ensure that separating employees are offered the opportunity to participate in exit interviews Ensure that the process for exit interviews is clear and that staff are skilled to conduct them Ensure that data from exit interviews is recorded and depersonalised Analyse data from exit interviews to establish trends and patterns and introduce improvements across the organisation 35 True or False Quiz 36 Summary 37 Bibliography 39 Assessment Pack Use considered risk taking in your grey area...and others will follow you! Legend This symbol indicates the beginning of a new element. These will help you to find the information for your assessment activities. Activity: Whenever you see this symbol, there is an activity to carry out which has been designed to help reinforce the learning about the topic and take some action. This symbol is used at the beginning of each element to indicate the summary key point. This symbol is used to indicate an answer to the Candidate s questions or notes to assist the Facilitator. 2

Qualification Pathways There are always two choices. Two paths to take. One is easy. And its only reward is that it s easy. Source Unknown This unit of competency is provided to meet the requirements of BSB07 Business Services Training Package although it can be used in a range of different qualifications. The BSB07 Business Services Training Package does not state how a qualification is to be achieved. Rather, Registered Training Organisations are required to use the qualification rules to ensure the needs of the learner and business customer are met. This is to be achieved through the development of effective learning programs delivered in an order that meets the stated needs of nominated Candidates and business customers. 3

Qualification Rules You re either part of the solution or part of the problem. Eldridge Cleaver Qualification requirements include core and elective units. The unit mix is determined by specific unit of competency requirements which are stated in the qualification description. Registered Training Organisations then work with learners and business customers to select elective units relevant to the work outcome, local industry requirements and the qualification level. All vocational education qualifications must lead to a work outcome. BSB07 Business Services Training Package qualifications allow for Registered Training Organisations (RTOs) to vary programs to meet: Specific needs of a business or group of businesses. Skill needs of a locality or a particular industry application of business skills. Maximum employability of a group of students or an individual. When packaging a qualification elective units are to be selected from an equivalent level qualification unless otherwise stated. 4

Introduction Whether as an individual, or as part of a group, real progress depends on entering whole-heartedly into the process and being motivated to make you a more deeply satisfied human being. Source Unknown This unit of competency is about being able to manage separation and termination in the workplace. This manual is broken up into three distinct sections. They are: Develop Policies and Procedures for Separation/Termination of Employment Manage Separation/Termination Processes Manage Exit Interview Process At the conclusion of this training you will be asked to complete an Assessment Pack. The information contained in this resource will assist you to complete this task. On competent completion of the assessment, you will have demonstrated your ability to deal with redeployment, resignation, retirement, dismissal and redundancy, including the conduct of exit interviews. 5

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ELEMENT 1: Develop Policies and Procedures for Separation/Termination of Employment Key Points Element 1 In order to develop appropriate policies and procedures for termination you need to ensure that you: Understand best practice and legislation in relation to termination and separation Consult with managers in your organisation Develop these policies based on your research and consultation with others Ensure that the procedures allow for respect, confidentiality and compliance with legislation Are supported by others in the organisation Are communicated to those who need to see them Have been refined through the use of feedback. 7

In this manual, we will be considering the implications of managing people as they leave a workplace. There are many forms of workplace separation that can occur - but we will be concentrating on dismissal and redundancy. As with all areas of business, we will be considering policy as the first part of this manual. The Legal Implications of Separation We will begin this section by considering the legal implications of dismissal and redundancy. As of July 1, 2009, a major piece of legislation was introduced that had substantial implications with regards to the way that separation is handled. The legislation is the Fair Work Act 2009. The Fair Work Act applies to all employers that are incorporated under the Corporations Act 2001. Workers in ACT, Victoria and the Northern Territory also have additional protection under this act for Unfair Dismissal. There are specific requirements contained in the Act regarding notices of termination that apply to all employers as of January 1 2010. Dismissing Staff A dismissal is one of the most common methods that can be used to end an employee s employment. There are two primary forms of dismissal that are used by businesses, summary dismissal (on-the-spot) and dismissal with notice. Let s look at each of these methods in turn. Summary Dismissal Essentially, this form of dismissal is dismissal without any form of notice. For the most part, it is used only for the most serious forms of misconduct. A good test is to think whether it would be reasonable to require an employer to continue employing the employee through a period of notice. If it is not, then summary dismissal can be considered (although it is significantly more difficult than this in practice - as we will discuss shortly). In order to be able to use summary dismissal the employee must have acted in a way that directly breaks their employment contract. Examples of such behaviours include: fraud disobeying a lawful direction actions that threaten health and safety theft. 8

In each of these cases, there can be an argument that you can summarily dismiss the employee if their actions are of a sufficiently severe nature that continued employment may have a negative effect on the business as a whole. It should be noted that if an employer has, in the past, condoned any such behaviour, or not taken any action when the offence has been committed in the past, then summary dismissal is not an option. It is recommended to always seek advice from a legal professional before proceeding with an instant dismissal to ensure that what you are doing is legal. Dismissal with Notice If the conduct by the employee could be considered serious enough to terminate employment, but not serious enough to result in an instant dismissal, there is still the option of allowing dismissal with a notice period given. Generally speaking the length of service by the employee has a significant effect on the amount of notice that needs to be given. We will cover this later in this section. In these cases, it is important to note that you must adhere to the law in terms of the notice to terminate employment. 9

When the Dismissal is Considered Unfair Before the introduction of the Fair Work Act, only some employees were able to claim unfair dismissal. The employer had to employ more than 100 staff and there was a 6 month period before any such claim could be made. The introduction of the new legislation, however, has changed this. The legislation has created a new body Fair Work Australia. This now allows all employees to make such a claim providing they have been employed for a given period of time. Whether a dismissal is unfair can only be determined by Fair Work Australia, and their decision is based on whether: The person has actually been dismissed That the dismissal was unreasonable or unjust That the dismissal was not a genuine redundancy. We mentioned in the points above that a dismissal must not be a genuine redundancy. What exactly is redundancy? The legislation defines it to mean that it is the result of the employee s position no longer being needed to be performed by anyone (not just the incumbent) because of operational requirements and changes to these requirements. Such changes may include: downturn in business workplace restructuring general reduction in staffing levels. A genuine redundancy must also be in line with all the requirements of the specific award or contract that is in place. There also must be genuine notification and consultation in order for the redundancy to be seen as being genuine. If that employee could be redeployed to another position within the organisation and such redeployment is seen as being reasonable, then the redundancy would not be considered to be genuine. A claim of unfair dismissal can be made by any staff member who has completed the minimum period of employment before making the claim and if they are covered by an enterprise agreement or a modern award. However, if the level of income the employee earns is below the High Income Threshold, regardless of whether they are covered by an award or agreement, they may make a claim of unfair dismissal. The threshold level changes each year. As of the time of writing, it was $108,300. We mentioned above that an employee must be employed by the organisation for a certain period of time before they can make a claim of unfair dismissal. This period is dependant specifically on the size of a business. The period considered is 12 months for a small business and 6 months for all other businesses. A small business is considered to be any business with less than 15 full-time employees (this applies until 31 December 2010). This will change from 1 January 2011 to be a simple headcount - less than 15 employees is a small business, regardless whether they are full-time or not. The service must also be Continuous. This simply means that any service with the business must be unbroken. There are some types of employee who can not make a claim of unfair dismissal. Those employees unable to make such a claim include: 10

Employees of a fixed term agreement, or those brought in to complete a specific task. Seasonal employees. Employees who have been demoted without a corresponding reduction in income Trainees on a fixed term agreement. Dismissal Procedures Let s now move on from the specifics of dismissing staff and examine the adoption of procedures to ensure that all dismissals within the organisation are seen to be fair. It is highly recommended that when you terminate staff members, you carefully consider the procedure you are taking to ensure that you are working in a fair manner. We discussed unfair dismissal cases above. These can be extremely costly. A recent case saw an IT company having to pay $33,000 in an unfair dismissal case. Having procedures in place will also allow an organisation to more strongly defend their position in such a case. If procedural fairness was followed, the organisation will be able to show more strongly the fact that a dismissal was genuine and that the procedure followed was conducted in a fair manner. Some examples that an organisation may like to follow include: Ensuring that the person being terminated is able to have a support person with them at the meeting. Notifying the employee in advance of any issues that have arisen, as well as reasons why it is a problem. Allowing time for the employee to respond to any accusations that have been made against them. Warning the employee of the possibility that their actions may result in termination (where appropriate). Ensuring that support is given to overcome any problems, for example coaching. Ensuring that the employee s reason for termination directly relates back to their ability to actually perform the job at hand. We mentioned above the need for a warning system. let s look at how warnings should be produced: A warning must be in writing. A warning must clearly describe the problem and describe what changes the employer requires to occur. A warning should outline the fact that if the performance is not improved, dismissal is an option. A timeframe for improving of performance should be given, so that the employee is aware of when improved performance has to occur. 11

Unreasonable Dismissal We have discussed unfair dismissal in detail, let s now look at the processes surrounding dismissals that could be termed unreasonable, harsh or unjust. Once again, these fall under the view of Fair Work Australia. When attempting to establish whether a dismissal was either harsh, unreasonable or unjust, they will consider the following information: Whether the reason given for any dismissal was valid and related to work conduct or capacity to undertake a given job. Whether the individual concerned was made aware of the existence of a problem. Whether the individual was able to have a support person with them in the dismissal proceedings. Unlawful Termination We will now move on to Unlawful Termination. These provisions are once again contained within the Fair Work Act, and came into effect on 1 July 2009. When examining cases of Unlawful Termination, there are no specific employment periods that must be met (as there were with Unfair Termination) and any employee in Australia can make claims under the legislation. Some of the reasons for termination that are considered unlawful include: Any form of discrimination (such as race, sexual preference, sex, age or disabilities). Taking time off work on a temporary basis because of sickness or injury - so long as the absence is not longer than 3 months and that any specific requirements as to proving injury or sickness have been met. Taking time off work for maternity leave. Status with regards to Union membership. Making complaints of any kind against the employer. As an employee, if you make a claim with regards to unlawful termination of your employment, the employer must then attempt to show that the reason you gave was not the specific reason for the employment being terminated. This means that as an employer, you must be able to show that there were other mitigating reasons for the employee s employment being terminated. As an employer, this shows the importance of keeping good records, particularly in regard to warnings, as written warnings show a record of problems with performance which can help eliminate any claims of unlawful dismissal against an employer. Now that we have discussed Termination and the law that relates to it, we will move on and examine redundancy in detail. 12

Redundancy Redundancy is another form of termination. In this case, it is used by an employer when a decision has been made that there s no longer a need for an employee to hold a given position, or where the organisation can get away with having less staff performing a given role. Redundancies are often undertaken during the introduction of new technology, saving costs, closing part or all of an organisation or restructuring an organisation. Hard work spotlights the character of people; some turn up their sleeves, some turn up their noses, and some don t turn up at all. Sam Ewig 13

Redundancy Pay One of the key factors to consider when making redundancies is redundancy pay. Generally speaking, employers are required to pay redundancy pay for all employees who have worked in a given organisation for 1 year or more and if the position is terminated because the job no longer needs to be done. Specific awards may also have a specific redundancy scheme, and if this is the case, then the general provisions outlined above do not apply, under the Fair Work Act. Redundancy is not payable to any employee who has been dismissed for any reason and casual workers are also unable to claim redundancy pay for the time which they worked for an organisation. The amount of redundancy due will vary depending on any specific award that is in place. Employees who are made redundant must also have a relevant notice period given to them before the redundancy comes into effect. If an individual leaves an organisation during this redundancy period, they are still entitled to redundancy pay. Once notice for redundancy is given, an employer must give an employee up to 1 full day off work per week (without loss of pay) to enable them to look for another form of work. The time off can be taken whenever the employee finds it is needed with consultation from the employer. Now that we have looked at the legislation behind the principles of termination and dismissal, let s look at an example of a Termination Policy. This contains many of the relevant provisions that we outlined above and some further provisions that it may be useful to read through. This example policy is not exhaustive, but gives a good indication of what such a policy should contain. Example Policy 1. Overview This policy is designated by law as a Relevant Policy covering the employment of all staff in relation to all staff employed under an Australian Workplace Agreement that specifically refers to this policy. The Termination of employment may be started by any staff member resigning and giving relevant notice or by not turning up for work or by retiring from their position. Termination may be initiated by XYZ Company for unsatisfactory performance, chronic ill-health, misconduct or redundancy of a given position. Relevant notice will be given by XYZ Company in these cases (except in the case of serious levels of misconduct) or in lieu of notice, payment may also be made. 14

2. Policy 2.1 Notice of termination by the employee All employees of XYZ Company, apart from Casual Employees, are required to give written notice of intention to terminate their employment. These notice periods are as follows: Management - Not less than 4 weeks notice General Staff - Not less than 2 weeks notice If an employee does not give the required period of notice before terminating their employment, XYZ Company has the right to withhold money due to the employee equal to the ordinary rate of pay for the entire notice period. 2.2 Notice of termination by XYZ Company XYZ Company may only terminate staff due to: unsatisfactory performance serious misconduct redundancy In each case, the notice period will not be less that 1 entire pay period XYZ Company will make payment in lieu of the notice if the appropriate notice period is not provided for by the company 2.3 Serious or wilful misconduct Notice will not be required where an employee is terminated for serious or wilful misconduct. 2.4 Redundancy Any employee whose positions are made redundant by the company and who then leave the company will be entitled to the relevant redundancy payment set out in the Workplace Agreement. If the employee is transferred to a lower paid position within the organisation, the same notice period is required to be given, as if the employee was to be terminated. Any employee that leaves during the relevant notice period is entitled to any benefits and payments as if they had remained with XYZ Company. However, they will not be entitled to receive any payment in lieu of notice. 2.5 Time off during notice period During the notice period for termination, an employee will be allowed up to 1 day of time off work, with pay during each week of the notice for the purpose of attempting to find alternative employment. 15

Activity One Read the following case study and determine whether Michael could claim unfair dismissal: Michael had been working for a large company for 8 years, and was asked by his employer to climb a large ladder in order to move boxes from a high shelf in the warehouse. Michael was the only employee working and would need to climb the ladder to a height of 8 metres and carry the box which weighed 16kg down. Michael expressed concern about the safety issues. His manager said that he had to do the job or leave. Michael left and filed an unfair dismissal claim in Fair Work Australia. Facilitator s Notes for Activity One Discuss the case which the Candidates. This would be regarded as an unfair dismissal. Michael met all the criteria for being able to apply for an unfair dismissal. Because his manager said he had to perform unsafe work or be dismissed, this is regarded as being a dismissal (even though Michael resigned). 16

Element 1 - True or False Quiz True False Unfair dismissal is determined by relevant unions. It is determined by Fair Work Australia. Instant Dismissals may occur for any reason. There are a specific set of circumstances which allow for instant dismissals. The Fair Work Act came into force in 1999. It was enacted on July 1, 2009. A genuine redundancy is a redundancy that is the result of the employee s position no longer being needed to be performed by anyone. A warning must be in writing. Dismissals are more legally challenging than redundancies. They both have legal issues that need to be overcome. An employee may not be fired for not being a union member. Specific awards are not allowed to have their own redundancy clauses. They may have their own clauses. A claim of unfair dismissal can be made by any staff member that has completed the minimum period of employment before making the claim. 17