Federal IR changes could rebound

News

Federal IR changes could rebound

Proposed changes to Federal IR legislation could generate unwelcome developments for the Federal Government and employers.

WantToReadMore

Get unlimited access to all of our content.

Proposed changes to Federal IR legislation could generate unwelcome developments for the Federal Government and employers. Speakers at a recent conference in Sydney noted that AWAs may rebound on employers and changes to unfair dismissal laws could drive more workers to join unions and seek other avenues to litigate their grievances.

The Industrial Relations Reform 2005 Conference in Sydney last week heard presentations from a range of speakers from business, the legal profession and government.

AWAs? Don’t be left with egg on your face 

Considering there will eventually be a change in the Federal Government, employers have to ask themselves ‘how many eggs do you want to place in the AWA basket?’, a leading industrial lawyer says. 

Change of government - an issue

Michael Harmer, Partner, Harmers Workplace Lawyers, told a Sydney IR conference that AWAs had a great liability going forward.  

‘A change of Federal Government will see massive changes,’ he said. 

‘The policy of the ALP, the Greens and the Democrats is to abolish the Office of the Employment Advocate and AWAs. We will see changes to the current IR system by July 2006 and there can be an election as early as July 2007. There only has to be a change of government to see a reversion. 

‘What if AWAs are revoked because they are bench-marked against a very small safety net?’ 

Alternatives

Harmer said an alternative was certified agreements. 

‘Do you look for long term stability, productivity and efficiency?’ he asked. ‘A lot of certified agreements facilitate individual agreements. 

‘It can also be done through contracts of employment.’ 

Employment Advocate position

Peter McIlwain, Federal  Employment Advocate, Office of Employment Advocate said small business was increasingly taking up AWAs. 

‘They can provide work/family balance through flexible hours, and accommodate an ageing workforce through flexible conditions,’ he said.

Related 

New federal Employment Advocate announced 

New faces for federal agencies  

Will unfair dismissal exemptions drive workers into unions?

Will the exemption of small employers from unfair dismissal laws encourage their employees to join unions for added protection? 

Or will it send employers treated unfairly to seek compensation in other ways, such as through anti-discrimination bodies? 

They were two of the questions raised at a panel discussion at a recent IR conference in Sydney. 

The panel consisted of John Colvin, Head of Employee Relations at Freehills, John Van Doussa, President of the Human Rights and Equal Opportunity Commission and Peter Glover, Director of Construction, Master Builders’ Association. 

Some statistics

Colvin told the conference that the exemption for small business legislation had been rejected in the Senate 41 times since 1996. 

He said that since 1997-98 the average number of applications for unfair dismissal is around 4000 per annum in NSW and 1600 in Queensland.  

‘WA is a bit more erratic, varying from 760 to 1300, and federally there is around 7,500, so with the other states the total is about 14,000 a year,’ Colvin said.  

‘Is this a lot? I think many would have expected the figures to be higher.’ 

Arguments

Colvin said the arguments in favour of the small business exemption were that it costs jobs, employees still have access to other remedies (such as anti-discrimination), and the complexity and “daunting” cost of the regulations to small business generally.  

Colvin said the estimate by the Melbourne Institute is that unfair dismissal laws costs 77,000 jobs. 

He told the conference Australian Business Ltd submission to a Senate Committee had stated that three quarters of unfair dismissal claims cost less to settle than to fight. 

‘The average cost is $3,600 and it takes up 62 hours of the employer’s time,’ Colvin said. ‘The total cost is $1.3 billion a year.’

‘It is also argued there are sufficient other remedies such as breach of award, anti-discrimination and common law.’ 

Colvin said the arguments against the exemption included the fact that there is no evidence it costs jobs.  

‘There has been criticism of the methodology of the Melbourne Institute figures,’ he said. 

‘It is also put that small business employees have the same right to protection as other employees, and that the number of employees at 20 is too big. 

‘There is concern that small business may seek artificial ways to employ less than 20 employees.’ 

Other avenues of redress

Colvin said a further concern was the 'balloon' effect, that squeezing employees of small business out from unfair dismissal laws will push them into other areas.  

‘Will it push them into other areas such as anti-discrimination, unlawful dismissal or harsh and unfair contracts?’ Colvin said.  

‘Under common law “mutual trust and confidence” is an implied term in contracts and it is still to be decided if this will be a factor in dismissal claims. There are also the “mislead or deceive” provisions of the Trade practices Act. 

‘Breach of award or agreement provisions or internal grievance procedures could also be avenues which employees can use to seek compensation.’ 

Anti-discrimination claims

HREOC’s JohnVan Doussa said employees currently had two courses available to them, unfair dismissal or unlawful dismissal.  

‘At the moment the complainant has to choose between them,’ he said. 

‘If we abolish unfair dismissal provisions then they will all go one way, but it won’t increase the overall number of claims.’

Van Doussa said that under federal law he didn’t think there would be much 'ballooning'.  

‘Complainants won’t move from the Workplace Relations Act to anti-discrimination,’ he said.

‘For unlawful dismissals and anti-discrimination cases the basis is largely the same. The grounds are the same (one the basis of sex, race etc); there is a similar legal basis. Anti-discrimination laws are not aimed at dismissal, it is aimed at conduct in the workplace.’

HREOC deals with 1200 to 1300 claims regarding discrimination each year. 64% related to employment and 9% to dismissal. 

Van Doussa said of the 1300 anti-discrimination cases HREOC gets each year 25% do not go to conciliation. Of the rest, two thirds settle and one third goes to court. 

Reason to join unions

Peter Glover of the MBA said there were 200,000 employers in the building industry, mainly small employers, and 700,000 employees. 

He asked whether the exemption from unfair dismissal laws for small business would drive their employees to join union.

‘It could be an unintended consequence,’ he said. 

Glover said the reason unions, individuals or their agents pursue unfair dismissal claims is because ‘going through the system is too expensive and protracted’. 

‘They expect an offer of money to settle it,’ he said. 

Related 

AIRC clarifies dismissal laws

EEO and Privacy 

 

Post details