Businesses fight back against rising tide of litigation from ex-employees

Businesses are facing a sharp increase in cases of harassment and unfair dismissal brought by ex-employees under the new Fair Work industrial relations regime, a legal expert has said.

But Harmers Workplace Lawyers has says it is seeing a trend among businesses beginning to fight back against employee litigation, with companies refusing to pay large settlements during the downturn.

Shana Schreier-Joffe, partner at Harmers Workplace Lawyers, says there has been an increase over the past six months in litigation brought against employers by former employees for harassment, unfair dismissal claims and breach of contract.

“We are seeing an increase of people saying they are leaving because they are being bullied, or harassed, and I think people are more aware of the Fair Work legislation and are more willing to take litigation against former employees.”

But Schreier-Joffe says businesses are now beginning to fight back against the litigation by refusing to pay settlement claims. While companies were prepared to pay settlements in the past during prosperous times, the downturn has seen businesses tighten their belts.

“I’ve seen a hardening of attitudes, as we’re involved with a lot more litigation than we were 12 months ago. I think both employees and employers are less willing to settle.”

Schreier-Joffe says businesses are well justified in maintaining a hard stance against litigation, but they must be aware of their obligations under the law and “be prepared”.

“To be honest, the best thing these businesses can do is be prepared. Make sure your contracts are appropriate if they have notice provisions for terminations. There will need to be appropriate contracts, because legislation can arise if someone is terminated and the contracts aren’t detailed enough.”

“Additionally, make sure your staff have appropriate management skills. A lot of these employees believe they are being harassed doing performance-review related situations, so make sure your managers know how to deal with those issues. If they are not skilled, they could be seen as bullying.”

But the legal troubles are set to continue for businesses into the New Year, Schreier-Joffe said, with the Fair Work Act, National Employment Standard and Modern Awards legislation set to impact workplaces after 1 January.

In order to avoid expensive legal troubles, Schreier-Joffe says businesses must continue to keep up-to-date with new legislation.

“Employees are more likely to take litigation with the new laws, so businesses need to make sure they are keeping their obligations.”