Human Resources (HR) can be complex & our goal is to make HR easier for businesses. We often hear of many uncertainties or myths. In this article we cover some common misconceptions including; warnings prior to termination, employment contracts & negative references.

Employment & HR Myths – There are many myths that exist in the HR space with the most common surrounding the number of warnings an employee is required to provide before terminating an under-performing employee, that an employment contract does not exist if it is not in writing and that it is against the law to give an ex-employee a negative reference. In this article we look to address these common HR myths.

Myth One: Three strikes you’re out!

It is a common misconception that an employer is required to give three warnings before they are able to terminate an under-performing employee. When dealing with an unfair dismissal claim related to termination due to unsatisfactory performance, the Fair Work Commission has an obligation to take into consideration whether the employee had been warned about their performance prior to dismissal. Nevertheless, the Fair Work Act 2009 does not specify how many warnings an employee is obligated to be given. In cases of serious misconduct an employee may be dismissed with no warning at all. Therefore, an employer is not legally required to give three warnings before dismissal.

Sometimes providing more than three warnings might be appropriate, sometimes less. In the case of serious misconduct, it may be appropriate to dismiss an employee without any warnings.

Alternatively, a business may incorporate the number of warnings required before dismissal into its policies or employment contracts. Lawfully a failure on the part of the employer to follow these specifications could lead to an unfair dismissal claim. Employers must ensure they are familiar with all such documents before proceeding with termination.

Myth Two: If you don’t have anything nice to say don’t say anything at all.

A common misconception surrounding recruitment is the notion that providing a “bad” reference is against the law. In reality an employer has no legal obligation to provide a reference either bad or good for an employee.

While it is not illegal to provide a bad reference the law may intervene if an employer deliberately provides a dishonest or misleading reference that causes some harm to the employee.

To avoid these pitfalls an employer may elect to provide a statement of service instead of a reference that confirms the employee’s length of service and position but makes no further comments.

Myth Three: If its not on paper it doesn’t exist

An employment contract refers to a binding agreement which is used to guide and dictate the employment relationship between the employer and employee. Legally there is no requirement for an employment contract to be written, but it is considered best practice as it can be beneficial in decreasing confusion and potential disagreement surrounding terms of employment. Verbal agreements or oral contracts relating to salary or work duties can be binding by law. However, without a written contract it is common for issues to arise between employee and employer for example concerning company property, bonuses and other entitlements.

Oral contracts while valid can be difficult to prove, especially the exact terms of the agreement, which can mean that enforcement of one can be challenging and time consuming. If you prefer to oral contracts then as minimum it is advised that you should keep a detailed record of all negotiations and discussions between both parties as this will help to provide a paper trail should the matter go to court.

For clarification on any of the items discussed above or for further assistance please contact our ABILITY GROUP Human resources specialists.