Medium Businesses Series: Employee Disputes

The larger your business becomes, the more employees you will have, and subsequently, the more legal issues that may arise. Problems with employees are one of the most common issues to arise for medium businesses. As far as possible, think ahead to prevent potential employee disputes.

Expansion → Relocation?

Your business may now have reached the stage where you have started opening new stores in other suburbs, or perhaps new headquarters in another state. In such cases, businesses may often wish to transfer employees over to the new location in order to facilitate training or to ensure there is an experienced worker to ease the initial running of the business.

The first thing to consider is whether or not the existing employment contract has stipulated a place where the work is to be performed. Where a contract expressly states the location of the employment to be the original business premises, it is unlikely that you will be able to force an employee to relocate, particularly if a change in location was never discussed or anticipated by the parties.

If the contract is silent on the subject, courts will look at whether the requested relocation is reasonable, taking into account the circumstances of the case including the new location’s ease of access, any additional travel time, disruption to the employee’s personal life and amount of notice given. If deemed unreasonable, you will not be able to enforce a relocation and may even result in a repudiation of the contract. If you expect to continue expanding, it is recommended that a term be inserted into your typical employment contract that allows for an employee’s flexible relocation.

Avoiding Employee Disputes

Employee disputes are common, and this will only grow as your number of employees increase. To minimise your chances of having an employee dispute turn ugly and possibly ending up in court, ensure that you have considered the following:

• The Fair Work Act – this Act governs all employment law and all businesses are required to comply with it. It is crucial you understand the terms under this Act and that breaches are avoided. This includes reviewing your salary so you are not paying below the award and giving appropriate notice in the case of termination;
• Make sure you provide all benefits you owe under the law – including salary, super, annual and sick leave.

Overall, be reasonable and treat your employees fairly. If differences arise, compromise and negotiate with your employee – going to court is costly as well as time consuming.

Employee Handbook

As your business grows, mistakes will happen that you will learn from and as a result, practices or policies may change. One mistake businesses often make is that they neglect to update their employee handbook so that new employees will start with the right practices and develop correct habits.

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Employee issues are one of the most common legal problems that medium businesses face, so it is important you understand where you stand as the employer. If you need any assistance, get in touch with our employment lawyers.