Here’s how to expose yourself to an expensive claim in the Fair Work Commission or a court.
Setting up a medical practice, employing practice staff, maybe taking on some other doctors as well? What could possibly go wrong?
Here are five of the most common human resource management fails in medical practices that come across our desks.
1. Not taking a proactive approach to resolve issues early or sitting on complaints for too long
A good way to turn a workplace issue molehill into a mountain is to do nothing and hope it goes away.
When issues such as punctuality, efficiency, honesty, courteous behaviour to patients and other staff or relationships arise, it may be tempting to hope they resolve themselves. Formal performance management – periodic formal reviews, counselling about below-par performance, or even issuing formal warnings if necessary – is uncomfortable, especially in a small practice.
However, failure to intervene until a problem has become acute and serious exposes a medical practice to the risk of a claim in the Fair Work Commission or a court, or to a Workcover claim.
2. Reacting too quickly and not making proper inquiries
Moving too quickly when an issue arises can sometimes be as bad as not moving quickly enough. Denial of procedural fairness can also be an excellent way to end up in court or a tribunal.
When a complaint is made, make careful enquiries. What actually happened? What is the context? Is the employee given a proper opportunity to tell their side of the story?
Acting too quickly, and making a fast decision, can result from sitting on complaints for too long. For example, there may have been grumbling about a staff member’s behaviour for a long time, but it has been too difficult to do anything about it. Then you get a moderately serious complaint that you can use as opportunity to get rid of them, so you take it. Denial of natural justice greatly increases the risk you will lose if a claim is brought against you.
3. Failing to understand industrial awards
Practice support staff and nurses are covered by awards under Commonwealth legislation. Awards are the law. They set out minimum terms and conditions that employees are legally entitled to.
A common and simple failure is not understanding what your legal obligations are as an employer. Another failure is attempting to avoid managing complex entitlements by paying an “over-award” rate, intended to compensate for all award entitlements.
The consequences can be costly. If the relationship sours, the unhappy employee leaves (or is dismissed), and seeks legal advice about their situation, where a competent lawyer can often find they have been underpaid. Underpayment claims routinely range between $50,000 and $150,000. Unpaid overtime is often a major component of the claim.
4. Contract issues
Doctors engaged in private practices are not covered by awards. Whether they are employees or independent contractors, the precise legal obligations of the parties will be largely determined by their contract. If a dispute arises, the answer will in most cases be found in the contract.
Not having a written contract does not mean that there is no contract. If the contact is not in writing it will be oral, or implied. Disputes can become protracted, and very costly, if contracts are not in writing, or if the terms of the written contract are not clear or are badly drafted.
5. Over-reliance on pro-forma contracts, policies and letters
Documentation of employment relationships and policies can be crucial in any business. If not done properly, employment disputes, occupational health and safety issues and workers compensation issues can arise.
Pro-forma template contracts, policies or letters are rarely adequate, especially if they are not properly adapted to the specific needs of your business. You might not notice the importance of these documents when a problem has not yet arisen – the only time you really need them is when there is a problem.
Taking a template document and amending it yourself can also have unintended legal consequences, ranging from the amendments being legally ineffective, to changing the fundamental nature of a relationship. Australian employment laws are among the most complex in the world, so DIY-lawyering with documents off the internet is never recommended.
Rod Felmingham is a senior associate with global law firm Kennedys; Cara Cross is a paralegal.
This article was originally published in VicDoc, the magazine of the Australian Medical Association Victoria.
