Commentary
CO-WRITTEN / PARTNER | Staff Reporter, Australia
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ER Strategies releases Insight report on Unfair Dismissal Claims: Lessons for Franchisees

By Steve Champion, Managing Director, ER Strategies

ER Strategies released an Insight Report on unfair dismissals that unearths the reasons behind the reasons that employers settle unfair dismissal claims and the implications for their businesses. Over 2500 senior HR professionals were surveyed, including from the QSR sector, and the response was extensive. The Report explores the challenges, solutions and prevention of claims. The report is available free for immediate download for those interested in seeking a solution to this growing problem.

“As it is a concerning issue for all employers, we wanted to conduct our own research to learn more and give back to businesses and our clients, many of whom are in the QSR sector” said Steve Champion, ERS Managing Director. “By speaking directly with those at the coalface, we uncovered their most pressing issues regarding settling of claims as well as the solutions to address them.”

The Fair Work Commission states that 80% of claims are being settled at conciliation, with the majority involving a pay-out. The survey showed that 53% of respondents think that companies settled early to reduce further costs and 33% to mitigate long-term damage such as to workplace culture.

Respondents’ views on the solution were not uniform. There was a clear debate between implementing a short-term solution versus tackling the issue from the root cause, which was adhering to standard business processes and procedures relating to disciplinary matters.

“We are often called upon to defend client employers in unfair dismissal cases. Many are franchisees who simply don’t have an extensive business background and can fall foul of Australia’s unfair dismissal laws. And employees today know their rights and aren’t afraid to pursue them”, said Champion.

“We much prefer talking to our clients before they take action where that is possible, or coach them through what to do when dealing with urgent issues that simply can’t wait. We are able to be dispassionate when the franchisee is under a lot of emotional pressure”.

“Paradoxically, the main learning from the report is that whilst on the one hand companies settle claims because of concerns about the cost of defending them or the reputational damage, the fact they settle them rather than stick to following the correct process, leads to more claims and hence more costs and presumably more reputational damage than they would otherwise have had” says Champion.

“So it is an entirely circular argument.”

The contrary approach was best summarised by an HR director from NSW -

“Alternatives for settling that have been effective: companies being proactive instead of reactive, i.e. implementing performance management policies & frameworks.”

The Unfair Dismissal Insight Report provides quotes from the respondents supporting their opinions. The report is easy to read and informative for both employees and employers and the wide variety of responses makes it more relatable to any business. The Insight Report can be downloaded from the ER Strategies Website.

“Nice work, I enjoyed reading the report, interesting and insightful. Often knowing you're not alone in your opinions and recognition of similar issues and resolutions is all the encouragement one needs [to continue down the path], thanks for sending it through.” National Solutions & Training Manager
 

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by QSR Media. The author was not remunerated for this article.

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