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.