Latest stats reveal ‘go away’ payments still rife

by Stephanie Zillman04 Apr 2013

Figures released by the Fair Work Commission (FWC) back up claims that all too often employers are left with no choice but to pay ‘go-away’ money to sacked workers, rather than endure the expense of arbitration, even if they believe the dismissal was justified.

The statistics revealed by FWC show ‘go away’ money and claim numbers are still on the rise. Employment groups have said the statistics provide clear evidence that legislative reform is urgently required in order to protect businesses from costly, resource-draining claims. The Victorian Chamber of Commerce and Industry (VECCI), said the stats support its view that the current framework for unfair dismissal cases forces employers to pay ‘go away' money. “Many employers make a commercial decision to shell out a few thousand dollars so they can simply get back to running their business, rather than defending a claim. This occurs regardless of how unmeritorious a claim may be,” VECCI commented on its website.

The FWC data reveals that during the seven months from July 1 last year, 81% of the 6,077 claims lodged were settled in conciliation. Of these settlements, 75% involved a payment being made. The data also shows 80% of these monetary payments made at conciliation were for $8,000 or less, but some claims resulted in settlements of upwards of $40,000.

Of the 369 claims that did go to a hearing, 76% were dismissed by FWC. Upon the release of similar findings last year, Australian Chamber of Commerce and Industry chief executive Peter Anderson commented that there's no doubt that 'go away money' has returned and businesses are settling unfair dismissal claims even though they strongly believe a dismissal was for a valid reason.

To Anderson, the figures are proof that the system of unfair dismissal claims is being manipulated by "no-win, no-fee" lawyers pursuing speculative claims.

Notably, Workplace Relations Minister Bill Shorten announced late last year the long-awaited changes to the Fair Work Act which now sees a new 21-day time limit for lodging unfair dismissal claims. The changes will also empower FWC to dismiss some claims from the outset. The Government made the announcement in response to the Fair Work Act review panel’s recommendations, and Shorten commented that the changes will crack down on ‘vexatious’ claims  made against small business operators.

“Whilst we accept that the system is working very well, we accept the proposition that we need to provide absolute certainty for small and medium-sized enterprises so that claims which are without merit, if they continue to be pursued, can either be dismissed or alternatively the person making the claim...that they should carry the risk of paying the costs,” Shorten said in October upon the announcement.


  • by R Pollock 4/04/2013 5:17:37 PM

    Absolutely spot on but more so since the advent of 'Adverse Action' as an option for employees. Even when you think you have an airtight case, have all your paperwork in order and no way you can lose, unfortunately decisions go to the employee. No wonder employers take initiative and 'pay them to go'

  • by Ross Jackson 4/04/2013 5:31:03 PM

    Go away money is equally prevalent in adverse action claims, where it has got to the point that employers are afraid to performance mange anyone for fear of such claims (with their reverse onus of proof) and/or the usual cry of bullying and harassment.The effect on morale and productivity of seeing underperforming colleagues who are apparently untouchable or else paid large sums of money to go away is obvious. And there will be very few claims that the FWC can be fairly expected to "dismiss from the outset" without hearing evidence. Whilst proceeding further may be discouraged, it is another thing to actually dismiss the claim completely.

  • by Richard Frazer 5/04/2013 11:25:13 AM

    In my experience I can generally still identify poor management practice as the root of problems with employees that receive go away money. There are exceptions of course but if managers provided more role clarity and managed outcomes with a higher level of accountability and emotional intelligence from an earlier stage then I do think we would spend less time at Fair Work.

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