Although the review of the Fair Work Act released last week has largely been a disappointment to the business community, the amendments to dealing with unfair dismissal applications are welcome.
The review panel has recommended that Fair Work Australia be given the power to reject applications in certain circumstances. This has the potential to reduce the waste and injustice that occur at conciliation meetings.
Unfair dismissal provisions have been a contentious issue since they were first introduced, and they still are for good reason. The current unfair dismissal process particularly lends itself to abuse.
The first stage, called conciliation, is an informal hearing between the employer, employee and an officer from Fair Work Australia. This first meeting is supposed to be an opportunity for parties to resolve their differences and come to an agreement. On average, 80% of unfair dismissal claims are settled at this stage; unfortunately, this is also where the damage occurs.
The officers, who hear both sides of the story, act more like social workers than arbitrators and often fail to challenge allegations made by either party. Their aim is not to find what happened, or even to address claims, but to settle the matter and prevent it from going to trial. This means applying significant pressure on the employer to settle (pay ‘go away’ money) and avoid the hefty cost of a trial.
This is a substantial injustice to employers (particularly small businesses) who may have dismissed an employee for legitimate reasons, but still need to shell out a few thousand dollars to avoid larger court costs.
Many of these cases may have little chance of succeeding at trial; with a little interrogation from the Fair Work officer, such cases could be fairly dealt with at the conciliation stage.
These recommendations may not address all the problems with unfair dismissal laws, but they are a step in the right direction.
Alexander Philipatos is a Policy Analyst at The Centre for Independent Studies.