Fair’s fair – unfair dismissal cases on the rise

Unfair dismissals are back in the news again, with the Opposition’s workplace spokesman Eric Abetz proposing that unsuccessful claimants in unfair dismissal cases be liable to pay costs.

Predictably, the ACTU Secretary Ged Kearney had described the proposal as curtailing a fundamental workplace right.

While unfair dismissals wax and wane in terms of media coverage, they have not gone away for business, particularly cash-strapped small-to-medium enterprises.

Unfair dismissal claims have continued to rise under the Fair Work Act, increasing by more than 10 per cent a year since the laws took effect in mid-2009. Almost 8000 dismissal claims were lodged with Fair Work Australia in the first six months of 2011-12, a rise of 11 per cent from a year earlier.

The number of claims lodged is now running at about twice the level of the final year of WorkChoices.

Opposition workplace relations spokesman Eric Abetz said more employers were paying ”go away” money to get rid of claims and the Coalition would seek to reduce the number of claims.

”One would want to see a reduction in the number of claims to ensure people aren’t using this simply as an opportunity to milk some more money out of an employer, just on the basis they can,” he said.

Senator Abetz said that the Opposition would seek ”practical solutions” when it released its policy. Forcing unsuccessful claimants to pay costs would address a major bugbear of small business – that there is no disincentive to pursue spurious claims.

Workplace Relations minister Bill Shorten, speaking to The Age, observed that there was only a ”small increase in the number of claims” and challenged the Coalition to release its industrial relations policy.

”The Liberals’ industrial relations policy must be in a witness protection program, because no one can find it,” he said.

The Coalition’s former WorkChoices policy, which contributed to its 2007 election defeat, exempted businesses with 100 or fewer staff from unfair dismissal laws. Labour restored dismissal rights, although in businesses with fewer than 15 staff they have more limited protections.

The high income limit for compensation for unfair dismissal rose on 1 July from $118,100 to $123,300 for those not covered by a Modern Award or Enterprise Agreement.

Under Fair Work, there has also been strong growth in general protections claims that relate to discrimination and freedom of association – these have no salary thresholds and no damages limits, and are being used as backdoor unfair dismissal claims.

iHR’s CEO, Stephen Bell, believes workplace culture is fundamental to preventing claims. “Creating an environment where employees feel they are valued and treated fairly, where policies and procedures are clearly articulated and where any issues are properly dealt with through a well-planned process will help an organisation to avoid complaints. Organisations need to look at the bigger picture; prevention is not only better than cure – it is the cure. That said, I support the notion that people and organisations should be held accountable for their actions. While the right to make claims in good faith is an essential part of natural justice, if a claim is made with the intention to be vexatious or distracting, the claimant should be held responsible.”