Your policies aren't just guidelines — they're commitments

There's a growing trend in Fair Work Commission decisions that every employer needs to pay attention to: the Commission is placing significantly more weight on whether employers follow their own policies when making termination decisions.

This isn't new in principle — procedural fairness has always been a factor in unfair dismissal cases. But the emphasis has shifted. In recent decisions, the Commission has been explicit: if you have a policy, you're expected to follow it. If you don't follow it, the termination is more likely to be found unfair — even if there was a valid reason for the dismissal.

What the Commission is looking at

When an unfair dismissal application is lodged, the Commission considers whether the dismissal was harsh, unjust, or unreasonable. As part of that assessment, they look at the process the employer followed. And increasingly, that means looking at whether the employer's own policies were applied.

For example, if your disciplinary policy says that a verbal warning is the first step for minor misconduct, followed by a written warning, followed by a final warning — and you skip straight to termination — the Commission is likely to find the dismissal was procedurally unfair. Even if the employee's conduct warranted action.

Similarly, if your performance management policy requires a formal improvement plan with a defined review period, and you terminate an employee without following that process, you've undermined your own position.

The policy trap

Here's where it gets particularly risky for employers. Many businesses have policies that were written years ago — often templated — and haven't been reviewed since. The policies may contain commitments or steps that the business doesn't actually follow in practice. When a dispute arises, the employee (or their lawyer) pulls out the policy and points to every step that was skipped.

This creates a situation where your own policy is used as evidence against you. The Commission's view is straightforward: if you have a policy, it sets the standard. If you deviate from that standard without good reason, the process was unfair.

What needs updating

Review every policy that touches on how you manage, discipline, or terminate employees. The key ones are your code of conduct, disciplinary and misconduct policy, performance management policy, grievance and complaints procedure, and redundancy and organisational change policy.

For each one, ask three questions. Does this policy reflect what we actually do in practice? Is the policy realistic and operationally achievable? Does the policy align with current legislative requirements?

If the answer to any of these is no, the policy needs to be rewritten — not just tweaked.

Policies you should never operate without

At a minimum, every employer should have documented policies covering anti-discrimination, bullying and harassment, work health and safety (including psychosocial hazards), code of conduct and expected behaviour, disciplinary procedures, performance management, flexible work and leave, and social media and technology use.

These should be provided to every employee at induction, acknowledged in writing, and accessible at all times. If they exist only in a filing cabinet or a shared drive nobody looks at, they're not serving their purpose.

The fix is straightforward

Conduct a full policy audit. Compare what's written to what actually happens. Strip out anything you can't or won't follow. Add anything that's missing. Make sure the language is clear, the steps are realistic, and the policies are consistent with each other and with the relevant Award or Enterprise Agreement.

Then — and this is the part many employers skip — train your managers. A policy is only as good as its implementation. If your managers don't know the policy exists, or don't understand how to apply it, it won't protect you when it matters.

If you haven't reviewed your policies in the last 12 months, now is the time. The Commission is making it clear that employers will be held to the standards they set for themselves. Make sure those standards are current, realistic, and followed.

Industrial HR provides practical, precise HR and industrial relations support for Australian businesses. For more information, visit industrialhr.com.au.