Just a policy? Tips for getting it right
February 2009
Workplace policies raise many interesting legal questions.
Do they bind employers legally? Can an employee sue if their employer breaches a workplace policy? How should such policies be drafted? How can they be used to promote good workplace relations? How should workplace policies be monitored and implemented?
Consider this. An employer had a written sexual harassment policy. The employer held training of staff regarding the policy. So far so good. However, when a complaint of sexual harassment arose, the procedure under the policy did not resolve the issue. The employee was not satisfied, and complained to the equal opportunity commission. The commission attempted to conciliate but this failed. The employer could not recognise that the policy itself, and its procedures for implementing the policy, left much to be desired.
The employee went on to a hearing. The tribunal found that the policy was unclear. This was because the policy did not define sexual harassment, nor did it give examples of conduct amounting to sexual harassment. The evidence showed that some employees did not understand the policy as a consequence. The man who had caused the harassment was unaware that his conduct could be regarded as harassment. The tribunal also found that the training was too infrequent. Training had not occurred for a couple of years, and some employees had not been trained at all.
The employer was fined $20,000*. This was on the basis that the employer had not taken all reasonable steps to prevent the harassment. Quite apart from the cost of the fine, and the damage to reputation, the employer incurred substantial legal costs, not to mention the incalculable cost of reduced staff morale as a result of the incident.
Let us consider another example. A teacher became stressed at work. He claimed he had not been given sufficient training and support, nor enough time, to do his job properly. He tried to resolve his complaints through the procedure in the employer's grievance policy. This failed because the employer did not follow its own procedure under the policy. It ignored the policy and was dismissive of the complaint. The teacher resigned. He claimed damages for his stress-related condition.
In this case, the grievance policy was not part of the employment agreement. It was not annexed to the letter of engagement or given to the employee. The court decided that this did not matter. The court held that every employment relationship has implied into it a mutual duty of trust and confidence. This duty require the employer to honour its own policies, and this employer had not done so. So, it was held that the employer had breached the teacher's contract. His resignation was, therefore, a constructive dismissal for which he could claim damages.
The teacher was awarded $392,850 in damages for, among other things, the failure to follow the grievance procedure**. This case breaks new legal ground in Australia, and means that employers cannot safely ignore their own workplace policies.
These scenarios arise all too often. The good news is that they can be easily avoided by employers giving careful attention to drafting their workplace policies, and implementing them effectively.
Well drafted and implemented policies will help to avoid the costs of legal disputes and assist employers to meet legal compliance obligations. More importantly, effective workplace policies can have enormous HR benefits. Well drafted policies create certainty about ground rules, and help to educate staff about their legal rights and responsibilities. They can help to weed out "bad apples" in the workplace. They also enable the employer to show leadership through a positive statement of position on questions of policy. They promote fairness and compliance in the workplace, by providing a known and even handed framework for addressing sensitive issues. In some cases, they can provide direction during any cultural change the company might be undertaking.
Overall, it is important that employers are aware of the potential effect of policies they publish in the workplace, and should regularly consider and review these policies.
For further information please contact Mark Hemery, Principal, on mhemery@talbotolivier.com.au or Claire Sharpe, Solicitor, at csharpe@talbotolivier.com.au
* Dee v Commissioner of Police & Ors (No. 2) (2004) EOC [93-346].
** McDonald v South Australia [2008] SASC 134.
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