The departing

Jonathon Scott, 32, had been employed as a network engineer with a major telecommunications company for two years. He was happy, working hard and planning for the future.

It was a shock when his manager called him into his office in late January and told him he was going to be made redundant. 'I couldn’t believe it,' Scott says. 'I just didn’t see it coming. But to the company’s credit, they gave me a month’s warning, told me my financial package, and offered me the opportunity to get some advice from a consultancy company that they engaged. But I declined the offer.

'I went through all the emotions of disappointment, anger, worry, but I think I remained calm because I had some warning and it gave me a chance to think about my future. When you see redundancies across the board it makes you feel better because you don’t take it so personally. It is a business decision.'

Scott has since been employed by another major telecommunications company on a higher salary package. 'Everything has worked out in the end,' he says, 'and I am happier in my new position.'

Scott is just one of many employees who will face the sack or be made redundant in business. Although it is an inevitable part of living and working in a free-enterprise economy, the manner in which businesses undertake the process from an ethical and legal consideration can differ markedly. Not all employees such as Scott are given the option of career counselling and a notice period.

For those that are let go it can be quite traumatic, and there are ways many employers can handle the situation better. 'Employers need to understand the WorkChoices legislation,' says Rick Baillie, managing director of Workplace Consultants.

'Employers who employ up to and including 100 employees are exempt from unfair dismissal laws,' Baillie explains. 'But they could still find themselves guilty of unlawful dismissal if the termination is based on discriminatory grounds.'

Discriminatory grounds can include termination based on racial issues, pregnancy, religion, marital status and other sensitive issues. Employees who believe they have a case for unfair dismissal (for the full list go to http://www.workchoices.gov.au) can make a claim to the Australian Industrial Relations Commission if they have worked for the employer for six months or more before dismissal.

Employee dismissals are often couched in stark economic-rationalist language of 'downsizing', but for those who are let go, there are more than monetary issues at stake. 'There are also emotional issues to consider when making either sackings or redundancies,' Baillie says. 'In all practicality they [employers] should consider personal circumstances, especially if long-standing employees have had personal problems. Because sometimes working conditions may have contributed to those problems. It is a very delicate issue.'

Baillie has 20 years’ experience assisting business owners with human resource management and workplace relations issues. He says it is best to get things clear from the start. 'It is important that the terms and conditions as well as expectations of employer and employee are stated very clearly at the beginning of the employment contract,' he says. 'Employers need to stipulate to employees exactly what they expect in terms of attitude, performance, dress code, and list the reasons why an employee could be fired and the processes involved. All of this should be stipulated in writing.'

Sacking an employee also has to take into consideration the effect it will have on fellow employees. 'Terminating a staff member is almost always a hard decision to make,' says Ben Thompson, managing director of Enterprise Initiatives. 'The considerations are not just limited to how the termination will affect that staff member, but how it will affect other members of the team, and impact on the business. Termination of staff can have a detrimental impact on staff morale, particularly in redundancy situations or where it involves a popular member of staff. It is for these reasons that it is important to ensure that there is a clear separation of the emotional influences from the business decision to terminate the staff member.'

Enterprise Initiatives’ core expertise is in assisting businesses to create a modern workplace. This includes making workplace agreements, building incentive structures for performance and creating effective employee communication.

Retrenchments are always a difficult situation for a company, especially when they are only confined to one part of the business. When a business undergoes a major transition in the workplace, it is essential to take into consideration the effect on all staff members and also outside suppliers. Communication is the key, and often an outside party can help in managing the evolution. 'It is good for companies to have a neutral third party involved,' says Bridget Beattie, general manager of Right Management Consultants’ Australian arm. 'It is important to help employees work out what they want to do with their career and what skills they may need to take them to where they want to go.'

Right Management Consultants provides integrated consulting solutions across the employment lifecycle, and is often involved helping companies handle mass redundancies.

'If you offer a soon-to-be ex-employee support, it leaves them not feeling bitter about the company,' Beattie says. 'And the employees left behind think that their ex-colleagues have been given some help. Companies do it because it is the right thing to do.

'There are a lot of emotional issues involved when someone leaves a company not on their own terms. There is the feeling of hurt and abandonment and questions such as, "How will I tell my family?" There are financial considerations, and people’s emotions tend to be quite conflicting.

'We help them work through this,' says Beattie, who suggested workshops for sacked employees can in some instances assist them in coping with the process. 'That helps the individual not to take the issue so personally, as he or she can see others in the same situation. Everyone is an individual – that is our motto!'

Businesses also have to take into consideration that the 1980s and 1990s credo of 'leanness is more efficient' is not always an effective working practice for today. 'Companies need to take a longer-term view of any redundancies,' says Phil Minns, principal of Mercer Human Resource Consulting, 'and ask how it will affect the organisation’s capabilities to recover and grow the business.

'Also, the employment labour market watches the employer market. The branding of a company and the reputation they earn for managing employees is very important. If you don’t handle downsizing well it will affect both current and potential employees.'

Minns, who has extensive experience in HR in both the private and public sectors, says it is important for organisations to get it right by making the communication clear when either terminating an employee or making redundancies. 'When looking at restructuring and redundancies, companies, where possible, should consider the options of moving an employee to another part of the business or provide a voice in the process through the offer of voluntary redundancy,' Minns says. 'It is important to have support services to help the employees through the process, and that is something Australian companies have done quite well in the past five to seven years.'

There is no doubt that Australia’s strong economy will eventually experience a downturn, and that our low level of unemployment will not be sustained. It is then that businesses will be turning their attention a little bit closer to WorkChoices legislation. Both emotional and legal considerations will be needed to be taken into account before the difficult decisions of implementing redundancies and/or sackings are made.

Reference: April 2007, 77:03, pp. 38–41

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