Victorian Premier Ted Baillieu has called on the Fair Work Act review panel to make it easier for employers to sack under-performing workers, and the state government has backed their leader in his calls to reduce the scope for legal action by dismissed employees.
The Vic government is indeed backing business concerns about a lack of balance between employers and workers when it comes to unfair dismissal laws which can result in massive compensation payouts. “[Employers have] to pay 'go away' money to settle unmeritorious claims to avoid involvement in more lengthy and costly tribunal proceedings," the Victorian government’s submission to the panel said. “A decision to terminate employment might be considered unfair due to any failure to strictly comply with procedural requirements.”
The Australian Chamber of Commerce and Industry added that it is imperative the Fair Work Act is amended because mass ‘go-away’ payouts are acting as a disincentive to the hiring of permanent staff.
A recent survey conducted for the Baillieu Government found 53% of employers thought unfair dismissal laws were holding back productivity. In the government’s findings it was also found that unfair dismissal cases in Australia grew to about 5,000 during 2010-11, up from about 2,000 just four years earlier.
Australian Industry Group CEO Heather Ridout commented yesterday that the Fair Work Act needed to be better aligned with flexibility and productivity if Australia was to manage the competition challenges ahead. See related story
An independent panel is reviewing the act, and the report will be handed to the federal government by 31 May.
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