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Labour shortages, inflation, recession looming and workplace disputes

By Alan J. McDonald


Post COVID-19, there is a shortage of employees and record low unemployment levels. How do employers manage this difficult labour market?

It will be challenging for employers over the next couple of years.

Wages will be pushed to new heights as employers pay more to attract the right people. Employees will expect higher wages to deal with higher prices and higher interest rates. Is paying employees more the only answer? Can businesses afford to do so, when all its other costs, including power bills, are rising rapidly?

Paying people more is not the only answer to building a better employee workforce.

So, what can an employer do to keep a business profitable, while walking on eggshells around some employees who are retained because finding new employees is too difficult?

Some employees seeking to stand on their rights will exploit the employer. Those legal rights have been significantly enhanced over the last decade. The Liberal Government kept in place most of the reforms introduced by Julia Gillard in the Fair Work Act 2009 (Cth).

First, employers should be quick to improve their own knowledge of workers’ rights. This will prevent them from accidently breaching laws of which they are unaware. The Fair Work Act 2009 (Cth) encourages people to complain, even if ‘the lady doth protest too much methinks’[1] In the recent case of Ryan v Rugg, Ms Rugg is suing independent MP Monique Ryan for instructing her to work unreasonable hours, and engaging in ‘hostile conduct in the workplace.  This potentially landmark case may demonstrate further the potential risks to employers if they do not respond appropriately to complaints raised by employees, and the risks associated with a lack of knowledge regarding workplace laws.

Dismissing people who complain too much can be unlawful, as making complaints is now a workplace right in many instances. Employers need to find cost effective ways to deal with complaints without harming their business or being taken to the Fair Work Commission for months.

Employers will be better equipped to mitigate the risk of employees seeking to enforce their legal rights if they have clear and concise company policies and procedures to which to refer. These should be made readily available to all employees. Small employers will not have a dedicated HR professional so unfortunately, may need to revert to lawyers where they have a business to run which cannot be interrupted by a disgruntled employee. The role of human resources or legal practitioners is simplified if reference can be made to a breach of a policy or procedure by the troublesome employee.

The breach can be properly categorised into disciplinary action or dismissal without the risk of a successful claim against the business.

The policies and the procedures will give day to day certainty to the employees about their conduct and their workmate’s conduct. This renders it less likely for them to raise complaints or concerns about the conduct of others. Where there are disputes, the policies and procedures will give a good framework for a quick and early resolution without much disruption to the business. Happy employees will be less likely to resign.

Restructuring roles can overcome labour shortages where a role cannot be filled. It allows for better use of the available talent and is a practical way to deal with a labour shortage. The restructure can also include an element of outsourcing of certain roles, where those roles cannot be met internally.

What many employers do not understand is that they need to avoid springing a surprise, like redundancy, or, a surprise change of role, onto an employee without adequate consultation.

Sometimes employers can unwittingly create a right to a redundancy by an employee. Employers can then be sued for the redundancy payment. This can occur where an employee’s role is significantly changed or where the enterprises work is divided differently than in the past.

For example, a salesperson might need to prepare an invoice for work, where ordinarily an invoice would have otherwise been prepared by an Accounts Receivable Clerk. The salesperson might resist preparing invoices as reducing sales time and opportunity for business development. Another method of changing business to meet labour shortages is, in some retailing areas, removing cash as a method of payment in favour of EFTPOS transactions only. This enhances the ability to keep track of sales and saves the time and effort in taking cash to a bank where there are fewer branches and ATMs to accept cash deposit.

[1] William Shakespeare, Act 3, Scene 2, Hamlet.