Structuring positions in your business correctly

Often getting the basics right in your business is key to driving efficient operations and avoiding legal battles. It’s the boring mechanics of the backroom structure that can make a world of difference.

One of the key areas this idea applies to is positions. Positions can simply be described as what the employee is contracted to do. In legal terms, this often means the functions, duties, and responsibilities they have. A position includes the scope of an employee’s work – but excludes other things, like their hours.

Writing positions in contracts

One of the most important aspects of designing a position is to actually describe it in your contract. It’s crucial to give the position a title, but going beyond this and giving a detailed description can actually be a double-edged sword.

For example, giving a detailed position of the work a bartender does could mean you miss some of the work you need them to do. If you include pouring beers, but not making cocktails, does that mean the bartender has a right not to make cocktails at work?

The answer is to be less prescriptive with how you write positions into your contracts. Typically, a title implies what workers do, regardless of what their position description says anyway. You can assume a bartender is required to pour cocktails – what bartender wouldn’t?

There are also duties that are on the edge of what a position is. These are less obvious and depend on many factors – but it’s still better to have a less prescriptive description. The simpler, the better. If you still need a position description, don’t make it contractual, and make it clear that the duties aren’t exhaustive and can be changed.

Expectation Management

Position descriptions are really an exercise in expectation management with your workers. Ultimately, it’s better to deal with your expectations outside of the contract with your employee – for three key reasons:

1. Evolving business needs.

Your business needs change all the time. Having what you require in a contract would mean you can get caught out with changing needs if you don’t regularly update your contracts.

2. Employees want to develop skills.

Many employees will actually want to move up in the business, and relish the opportunity to develop new skills and potentially get a pay bump. Having a tight definition of what they do can be a block to this.

3. Some employees don’t want to exceed what’s in their contract.

Sadly, some employees will game the system and try to avoid exceeding what’s in their contract. Having a specific list of what they need to do can promote this.

Restructuring positions

If you make any major changes to positions, you should do this with the employee’s agreement. Document these changes with a separate contract – keeping in mind it can’t change the minimum standards given by modern awards & enterprise agreements.

There are other key rules to follow when restructuring too. Restructures have a significant effect on employees, and it’s crucial that you have a genuine consultation process with them. You’ll need to show that you took the employee’s feedback into account.

Termination & Redundancy

It’s important to remember that to make a position redundant, you must follow these three steps at a minimum

1. Consultation obligations
2. Show that it was unreasonable in the circumstances to redeploy the staff member
3. Redundancy payout (unless an exception applies)

Learn more

Tanda recently hosted a webinar covering the ins and outs of positions by our Head of Product Compliance, Andrew Stirling. You can watch it here.