366 Words of Wisdom

Records (no, not the vinyl musical ones)

Records are so important. When you employ people or engage contractors, you need to keep lots of documentation. I am not just talking about tax and payroll information. I am talking about information relating to recruiting a staff member, training them, assessing their performance, promoting them (above other staff in a competitive process) and managing their dismissal or resignation if necessary.

I have been involved in so many matters on behalf of employers in unfair dismissal and similar matters. Often the employers keep few records about the job description given to the employee, what was said at the job interview or even what hours the employee worked. Yet often evidence of these things is crucial once the matter gets before a Court or Commission.

Your business might employ 5 people. If you don’t keep records of all your dealings with employees, how will you be able to convince a Commission that your recollection is better than that of your employee? You have so many other things to consider – insurances, clients, customers, suppliers etc. Is it really possible for you to remember a conversation you had with Joe or Jasmine 18 months ago about the unpaid overtime they were doing?

In a situation where it is the employer’s word against the employee’s, Courts and Commissions will tend to side with the employee. Employees tend to keep better records, and their recollection of events and conversations is often more lucid.

Of course, that always is not the case. I have acted for community schools embroiled in unfair dismissal and unpaid wage claims. I have seen school principals meticulously keep records of all conversations with staff. Some have insisted that all communication be followed up with an e-mail or note.

On the other hand, even employers with dedicated Human Resources departments can come unstuck where lines of communication between management and HR are not working.

The moral of all this is that keeping a paper trail of your dealings with employees is absolutely crucial. It may not be enough to avoid litigation. But if legal proceedings do erupt, it may provide you with the edge needed to negotiate a commercially prudent settlement.

(Words of Wisdom is a daily addition to the Sydney Lawyers Blog and written by Irfan Yusuf, Principal Solicitor of Sydney Lawyers. The column is for information purposes only, and is not intended nor is it to be used as a substitute for independent legal advice. Not all things in life are free.)