MANAGING THE WORKPLACE – Policy, Procedure and Ending a Workplace Contract

Policies and Procedures

The employment contract covers the legal terms of your relationship, but what about after the person sits down at their desk? As your business expands you’ll likely need to have policy and procedure in place to ensure employees have a clear understanding of their rights and what is expected of them in a range of areas, including:

Behaviour of Employee

• An employee code of conduct might include provisions about:
  • Standards expected in relation to behaviours and treatment by employees and officers and relevant contractors, in relation to others in the workplace, including harassment (including sexual harassment) and bullying, health and safety obligations, discrimination, honesty and acknowledging the contributions of colleagues.
  • Standards expected by the employer, including rules about use and misuse of phone, computer (including password protection), vehicles or other equipment or property of the employer, observing health and safety rules, misappropriation of company property or money, drug and alcohol use, email and internet use, avoiding conflicts of interest, compliance with particular legislation affecting the employer’s business and confidentiality of the employer’s commercial information (including use/misuse of the employer’s intellectual property).
  • Behaviour toward clients/customers including how complaints are managed and resolved.
  • Carrying out private activities on company time and/or use of company equipment for private use.
  • Potential ramifications for breach of the code of conduct, (noting that any rights to dismiss should be clearly set out in the employment contract).
  • Use of social media platforms, both within the workplace and outside of hours and rules around material that may disparage or damage the employer.

Depending on the nature and size of the business, some or all of these might warrant their own policies and/or procedures.

Behaviour of Employer

• Workplace surveillance policy (if cameras are installed or company computers or phones are accessible by IT management while they are allocated to an employee).
• Whistleblower policy.
• Handling of the personal information of employees (if something more in depth or separate from the privacy policy that applies generally is needed).
• Flexible working arrangements or leave policies that go beyond the employee’s legislative rights (including work-from-home rights).
• Right to disconnect after hours (now legislated).
• Employee complaints and grievance policy.

Customer/Client Handling or Other Outward Facing Policies

Depending on the nature of the business and the industry, the following may be necessary or desirable:

• drug and alcohol testing of persons entering a work site (may apply to contractors as well as staff).
• Customer/client complaints handling policy including a mechanism that ends with the CEO or Board as appropriate, and also provides information on any available third party dispute resolution services relevant to the particular industry, for example an industry association, ombudsman or regulator that provides investigation, conciliation/mediation or other services to customers in the industry.

Bullying and Harassment

The concepts of bullying and harassment are wide, and depending on the context, may include:

• Aggressive behaviour toward another person
• Intimidation
• Abusive or offensive language
• Humiliating or mocking behaviour, including public criticism of a person’s work
• Initiation ceremonies or hazing
• Teasing or practical joking
• Increasing or decreasing the workload of a person unreasonably
• Directing a person to perform work that is below or above their skill level
• Providing inadequate supervision or information to perform the work required, or at the opposite end of the spectrum, unreasonably micromanaging.

Reasonable performance or other management action is not bullying. The problem is that what is “reasonable” will vary depending on the circumstances of each case, and even reasonable management actions may still be bullying if they are imposed in an unreasonable way.

Legal Developments and Employer Duties

Continuing developments in laws impacting the workplace and in the broader sense, work health and safety, anti-discrimination (sex, racial and disability) and human rights mean that employers now need to focus on actively preventing discrimination and harassment in the workplace, rather than merely responding to incidents as they occur.

Under recent changes to the Fair Work legislation, employers must now take reasonable and proportionate measures to proactively avoid discrimination and sexual harassment on the ground of sex, and also to avoid subjecting a person to a workplace environment that is hostile on the grounds of sex.

That is, the objectionable behaviour does not need to be directed at a person, it only needs to be offensive, intimidating or humiliating to a person because of their sex or a characteristic that appertains to or is imputed to a person of that sex.

Whether the company is large or small, officers should pay close attention to the culture of the organisation and ensure that relevant policy, procedure and directions are put in place in respect of current and emerging issues affecting the business, including bullying and sexual harassment in the workplace, monitoring of workers on camera while in the workplace, use of company technology, training and professional development, just to name a few employee related examples).

The Interview – Start as You Mean to Go On

The laws against discriminatory behaviour don’t begin only after a person is hired or engaged. The Fair Work Act specifically forbids “adverse action” against prospective employees as well as actual employees and independent contractors (which are not confined to individuals) “because of a person's race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin”.

This means that care needs to be taken when formulating questions to be asked at interview.

Adverse action at interview stage is essentially a refusal to employ a person, or discrimination in the terms and conditions on which the offer of employment is made (but does not include action that is necessary because of the characteristics of the particular position).

Questions asked at interview (or when engaging an independent contractor) should be strictly limited to the suitability of the applicant for the particular position or work, having regard to its capacity, skills and experience.

If there are specific characteristics of the position that may affect the ability of certain persons to do the job, for example, overnight work, shift work, heavy lifting, insecurity of workplace or inherent physical or psychological dangers in workplace, then those should be made clear, and the person can be asked if there is anything that they think would impact their ability to fulfil the job requirements.

The websites of the Fair Work Commission, the Fair Work Ombudsman and the Human Rights Commission have a wealth of information and advice available for employers to assist in compliance and managing all aspects of the workplace relations landscape.

When the Relationship Ends – Reducing or Eliminating Damage

The starting position at general law is that provisions restraining ex-employees or contractors after a relationship ends are not enforceable, because it is contrary to public policy to stop or restrict people earning a living. Restraints can take the form of:

• Restrictions on the employee working, or trading, for a certain period of time, in certain geographical locations and/or in a certain industry or trade;
• Restrictions on the ex-employee/contractor soliciting other employees or clients of your business; and/or
• Exclusive dealing clauses in independent contracts (that is, a provision in the contract that gives a party sole or exclusive rights to purchase or sell to the other party for a fixed period).

Restraining Employees from Working in Competing Businesses

A restraint of trade clause prevents an employee for working for other businesses that are in competition with yours.

If you impose a post-employment restraint in the contract or seek to enforce a non-solicitation or exclusive dealing clause, it will be up to you to demonstrate that the restraint is reasonable, if you need to take action to enforce it.

A restraint may be reasonable where it goes no further than to protect the legitimate interests of the employer, having regard to the interests of the employer, the employee, and the public interest.

The Court will consider a number of factors, including:

• whether the employer has agreed as part of the termination or expiry provisions in the contract, or will, adequately compensate the employee for the restraint;
• whether the duration is reasonable having regard to the nature of the position;
• whether the scope is reasonable having regard to the location and nature of the business.

To provide discretion at the time of termination, and avoid a restraint being held to be unenforceable, the restraint clause can be drafted to provide options (“cascading clauses”).

Non-Solicitation Clauses

A non-solicitation clause restrains the outgoing employee from engaging with, or interfering with, customers, clients, suppliers, employees or contractors with whom they had influence while employed or engaged by you.

All the same considerations apply, but non-solicitation clauses can be easier to enforce because the restrained person often held a senior or influential role.

Contracts of employment or engagement with C-Suite executives and management should contain ongoing confidentiality obligations and restrictions on future use of intellectual property.

Important Note: This article is general in nature and is not intended to be a substitute for specific legal advice regarding your workplace or industry.