As outlined in its policy announcement prior to the election, Federal Labor has proposed changes to the unfair dismissal laws. We expect that the new government will commence to enshrine these changes in legislation early next year. However, things are not certain. The new government will need to secure the passage of the proposed laws through the Senate in order for the changes to take effect. It is too early to say whether the government will be able to achieve this before the Senate changes in July next year. Despite the uncertainty, the policy announcements reveal the nature of the changes favoured by the new government and we describe these in this article.
There will be thresholds for determining who can make an unfair dismissal claim. These thresholds will be different from the current laws which prevent unfair dismissal claims against employers with fewer than 100 employees. Under the system envisaged by Federal Labor, a person may bring a claim against a business with 15 or more employees if the person has served at least six months with the employer. If the person bringing the claim has been dismissed from a business with fewer than 15 employees, the relevant period of service is 12 months.
There will be a limit upon access to the system by non-award employees. To bring a claim, the annual remuneration of the non-award employee must fall under a specified amount which will be indexed each year. Unfair dismissal claims will need to be lodged within seven days of the dismissal. This is a substantial reduction on the current 21-day requirement.
For the time being, the Australian Industrial Relations Commission will continue to handle unfair dismissal claims. However, when it commences operation in January 2010, a new body known as Fair Work Australia will handle claims. Compared with the current procedures, there will be significant differences in the manner in which claims are processed. Each application will be considered in an informal conference convened by Fair Work Australia. In contrast to longstanding procedures, there will be no written submissions, no cross-examination of witnesses and no formal hearing. Parties may have a representative or support person present. Fair Work Australia will determine whether the dismissal was unfair and will be able to award reinstatement unless this is against the interests of the employer or the employee. Compensation can be awarded as an alternative to reinstatement.
A dismissal arising from a ‘genuine redundancy’ will be considered fair. A ‘genuine redundancy’ situation includes a termination of employment from a small business in order to reduce staff and costs in response to a trade downturn. Dismissal of employees due to the use of new technology will also be considered a genuine redundancy. Fair Work Australia will produce a Fair Dismissal Code. This code will provide assistance and information to small businesses. A dismissal will be considered fair if an employer has complied with the code or with advice from Fair Work Australia.
Remember, the laws have not changed yet. Detailed draft legislation has not been released and so the outcomes may differ from those described here. Australian Business Lawyers will continue to provide updates on any changes and developments as soon as they occur.
Unfair Dismissal under Federal Labor Government - To learn more about this author, visit Meredith Dorham's Website.
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