With employment law ever changing, it's no wonder that
employers are often unsure about what they can and cannot do. With
that in mind we debunk five common employment law myths.
1. An employee must be given a first, second and third warning
There is no specific requirement under employment legislation to
give employees a series of warnings before dismissal.
In a disciplinary process, what sanction (e.g. a written
warning, final written warning or summary dismissal) is appropriate
will depend on the circumstances and what a fair and reasonable
employer could do.
A series of warnings is likely to be more appropriate where the
disciplinary action relates to poor performance (e.g. not meeting
sales targets) versus situations of misconduct.
However, employers should be mindful of their employment
agreements or policies which may specify that in certain
circumstances a series of warnings will be given before dismissal
for misconduct. In that case, the terms of the employment agreement
or policy must be complied with.
2. No contract in writing means no contract
Just because there is nothing in writing does not mean that
there is not a binding arrangement. Even a verbal employment
contract is binding. Of course, where terms are agreed verbally
this could lead to significant disputes at a later date.
Employers must keep in mind that they are required by law to
provide employees with a written employment agreement containing a
number of minimum provisions, including but not limited to, the
hours of work, the duties the employee will be required to perform,
remuneration details and an employee protection provision which
relates to a restructuring situation. Where a written employment
agreement is not provided, the employer is liable to a penalty.
3. It's illegal to give a bad reference
Employer must give accurate and truthful references and not make
any comments which are misleading.
Along the same lines, employers should not make unsubstantiated
negative statements or claims.
The author of a reference may be liable if loss is caused as a
result of their inaccurate or misleading statements.
4. Serious misconduct means you can sack on the spot
Serious or gross misconduct will usually result in summary
dismissal (being dismissal without notice). However, employers must
still comply with the usual disciplinary procedures and the duty of
At a bare minimum, this means inviting the employee to a
disciplinary meeting, setting out the allegations and concerns,
giving the employee an opportunity to respond, informing the
employee of their right to be accompanied by a support person or
representative and telling the employee what the possible
Where summary dismissal may result, employers should not skimp
on proper procedure.
5. Deductions can be made from an employee's wages for
things such as lack of notice or covering business losses
Employers can only make deductions from employees' wages in
certain circumstances – for example, where the employee has
agreed to or requested the deduction in writing or the deduction is
required by law (income tax, child support, etc).
It is common for employment agreements to contain terms which
set out that the employee agrees to certain deductions being made
such as where the employee gives less than the required resignation
The employee can vary or withdraw this consent by giving notice
in writing at any time. The employer must then vary or stop the
deduction within two weeks of receiving the notice or as soon as
Unfortunately many of these myths are not uncovered until it is
too late and usually this will mean that the employer is exposed to
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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