By Elisha Radwanowski, B Com (HRM & IR)

When an employee is finishing up with the business notice, or payment in lieu of notice is important to get right. In a recent case before Fair Work the employer found out just how important a few days is. This weeks HR Highlight will explore what happened in this case and how we can learn from it.

The Facts
The facts of the case are fairly simple.

The employee was injured in 2009 and was on modified duties for 3 years, until the Workers Compensation authority notified the employer that they were deeming the employee unfit for work duties.

The employer gave the employee notice of termination on the basis of the findings, namely unfit to perform the key tasks of the role. The notice the employer gave was 4 weeks and 2 days, or a calendar month.

The employee took a claim to Fair Work on the basis that he was entitled to 5 weeks notice. The employer argued that the notification from the Workers Compensation authority legitimised the notice given to the employee

After several hearings on the matter Fair Work ruled that the requirement to give the full 5 weeks exits in the Fair Work legislation and can not be trumped or overruled by the actions or directions of the Workers Compensation authority.

The Result
The business was fined over $20,000 for the breach. While the business argued that the error was procedural and not malicious Fair Work argued that there was a need to apply a penalty that acted as a general deterrent to others in the future. The penalty that could have been applied in this case was over $50,000.

Interestingly the businesses HR Manager was also fined over $1,000. In handing down the fine Fair Work noted that the fine to the HR Manager was reduced from the possible $10,000 as they had little involvement in the breach.

What we can learn
For many it will seem that a $20,000 fine (plus the time and legal fees) is disproportionate to failing to pay an employee 4 extra days notice, but for businesses it is important to be aware of the repercussions of hasty or unresearched behaviour. It is important to flip the consideration, namely that it would not have taken much time or effort at all to confirm the amount of notice required was 5 weeks, not 4 weeks and 2 days, and that that effort should have been made.

It is important to note also that the case highlights that the approval of one authority (in this case Workers Compensation) to an action does not remove the requirement to act within other laws (in this case the Fair Work legislation).

The message
When terminating an employee for any reason it is important to check their employment instrument, the Award, the Fair Work legislation and any other laws (like Workers Compensation) that may apply when determining how much notice applies. It is important to remember that in some forms of termination there is a requirement for additional weeks notice based on the age of the employee – so there is danger in simply using a cookie cutter approach to notice periods. Just because it was right for an employee in the past does not mean that it will be right for all employees in the future. At a possible breach penalty of more than $50,000 plus the businesses time and effort and lawyers or representatives, it is worth checking notice requirements each and every time.

Here to Help
ACAPMA Employment Department is available to assist members via
HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation.

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