8 Tips to Prevent Employment Disputes 

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Table of Contents

• 1. Have a Robust Employment Contract 
• 2. Introduce Employment Policies and Procedures
• 3. Implement Conflict Resolution Mechanisms 
• 4. Create Training Programs 
• 5. Provide Effective Feedback and Communication
• 6. Conduct Performance Reviews
• 7. Comply With Entitlements and Legal Requirements
• 8. Create Paper Trails
• Key Takeaways

As a business owner, it is your responsibility to avoid employment disputes where possible. While you can resolve some disputes informally during daily work, serious or unresolved matters may require a more formal approach. Addressing workplace conflicts and employment disputes promptly and adopting formal procedures when necessary creates a healthier and more productive work environment. This article will go through eight tips to prevent employment disputes as an employer.

1. Have a Robust Employment Contract 

It is important to set up effective employment management procedures when you are employing people. Though you should aim to have a detailed employment agreement, a basic contract should outline the role, working hours and pay rates. Having a clear position description can help set expectations and reduce job dissatisfaction and performance issues. 

Employment contracts should:

• be clear, comprehensive and legally sound; and
• clearly state job responsibilities, expectations, compensation, benefits and termination procedures. 

2. Introduce Employment Policies and Procedures

Operational issues within your business are effectively addressed through policies rather than terms in the employment contract. You must ensure that employees are aware of and understand these policies for them to be enforceable. To achieve this, develop an induction session for your employees to complete when they commence and provide them with up-to-date policy documents. 

Having a fair employment policy is also crucial. Make sure your rules are clear, consistent, and communicated well to all employees. You should keep things fair by regularly reviewing and updating policies to match any changes in the workplace or laws. Additionally, you should ensure employees sign a record indicating they have read and understood the policies. This approach is essential when you need to rely on and apply these policies throughout the course of employment. 

3. Implement Conflict Resolution Mechanisms 

Implement effective conflict resolution mechanisms that encourage employees to resolve conflicts before they escalate. As an employer, encouraging straightforward, fair, confidential and transparent dispute resolution procedures can foster positive relationships with your employees. 

Embracing this approach helps employees find common ground and brings various benefits to any workplace, including:

• enhanced employee productivity due to increased job satisfaction;
• improved staff retention;
• reduced stress for both managers and employees; and
• stronger relationships with the workforce

Additionally, adopting these best practices reduces external dispute resolution costs, such as legal fees associated with employee claims against you.

4. Create Training Programs 

Implementing training videos and regular internal sessions for employees is essential to establishing a clear framework for employment expectations. By providing accessible training materials and encouraging ongoing discussions, you can ensure that expectations are clear and well-understood. This enhances employee skills and knowledge whilst contributing to a positive work environment. There is also a risk mitigation benefit, reducing the potential risk of misunderstandings and promoting a culture of continuous learning within the business. 

For example, you may be running a cafe and employing baristas, servers, dishwashers, and hosts. To effectively manage all these positions, you would conduct regular training sessions that encourage discussion about how to improve the workplace. This could involve not only improving customer service by building communication between your staff but also any employment policy they wish to see updated. These training sessions can refresh employees’ skills and expectations as well as allow them to feel more heard and well-equipped for the job. 

5. Provide Effective Feedback and Communication

A straightforward way to prevent employment disputes is to foster open communication. Employees should feel at ease discussing concerns with employers. Maintaining ‘open doors’ enables early issue identification and resolution. Offering constructive feedback can help your employees fulfil their roles and grow professionally. If you do not promptly address concerns and delay positive feedback, your employees may feel undervalued, and unresolved issues can escalate. It is important you clearly define channels for grievances, encouraging open and respectful communication. Managers should be equipped to prepare, listen, and collaboratively find solutions during such conversations.

For example, dealing with complaints can be time-consuming and frustrating, but you can better protect your business from risk by resolving the issue quickly. Complaints can be an opportunity for you to listen, respond efficiently, and implement procedures to avoid further disputes. 

6. Conduct Performance Reviews

Communication breakdowns often lead to employment relationship issues. Implementing performance reviews may seem daunting, but they could limit negative behaviour from employees and prevent employment disputes. Formal performance reviews could include:

• highlighting strengths;
• addressing weaknesses;
• suggesting improvements; and
• seeing how the employee is feeling within the workplace. 

It can be up to your discretion how often these reviews are held but maintaining regular communication about performance can be positive for your business. 

For example, setting up a monthly meeting with an employee to identify the positives and negatives of the previous month, as well as goals for the next month, can help them feel valued and willing to improve. 

7. Comply With Entitlements and Legal Requirements

As an employer, you must familiarise yourself with the relevant legal regulations before an employee starts working with you. This can include guidelines such as awards, enterprise agreements and various legislation. You must confirm legislative entitlements such as personal and compassionate leave. If your employee is covered by an applicable award or enterprise agreement, it is essential to ensure you comply with its specifics, like lunch breaks and overtime pay. Mistakes in payment can lead to disgruntled former employees filing complaints with government bodies such as the Fair Work Ombudsman for alleged underpayment. It is crucial to maintain accurate payment systems to prevent such issues and seek legal advice if you have further concerns or require assistance.

8. Create Paper Trails

It is important for an employer to keep a written record of an employee’s performance and actions you take to address issues in their file. Documenting all meetings and using formal letters when necessary ensures there is no ambiguity. If an employment dispute escalates, this can help protect you and your business against claims of unfair treatment or dismissal. 

A paper trail can be essential in:

• ensuring clarity and objectivity;
• helping to aid memory; 
• maintaining consistency;
• tracking employee feedback and development;
• maintaining communication;
• guiding future decision-making; and 
• mitigating and preventing possible disputes. 

For example, if you have a discussion with an employee regarding a grievance or issue within the workplace, you may send an email to the employee setting out what was discussed and the plan of action to resolve the issue. Taking detailed notes, especially regarding performance or conduct concerns, can prevent employment disputes later on.  

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Key Takeaways

Taking timely and informed actions helps navigate employment challenges effectively and mitigates potential legal risks. It is important to address disputes and conflicts early and encourage clear communication while maintaining a healthy work environment. Important considerations to achieve these aims and limit employment disputes are:

• terms in an employment contract;
• employment policies and protocol;
• available conflict resolution mechanisms;
• training programs;
• effective feedback and communication;
• performance reviews;
• entitlements and legal requirements; and
• paper trail usage. 

If you would like assistance regarding employment dispute prevention, contact our experienced dispute resolution lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.