Unfair dismissal claims here to stay!

by Human Capital26 Jun 2012

This is the final article for the Workplace Solutions Group. We appreciate having the opportunities that we have had to share our experiences with Human Capital’s readership.

For this article, the writer is unashamedly "signing off" with an article that is in essence an opinion piece – thus the views expressed are those of the author alone, not his team or his firm.

Unfair dismissal claims by employees aggrieved by their dismissal are of course a feature of Australia’s industrial relations landscape, and have been a feature of the political debate over Australia’s employment laws for a number of years.

[Note I am talking here about unfair dismissal, not dismissals that are unlawful, such as dismissal on discriminatory grounds or which constitute "adverse action" – that’s a separate problem that there is no room to discuss here.]

However, unfair dismissal claims have only been a "political hot potato" since 1992, when the then Keating Federal Government, after ratifying International Labour Organisation Convention 158 (concerning rights of redress for employees in relation to termination of employment) had laws enacted at the Federal level to give individual employees the right to challenge alleged unfair dismissal in certain circumstances.

There are many issues in the debate, with employers frequently complaining that the ability to make claims deters employers from hiring, and requires employers to pay "go away money" to settle claims. On the other hand, the initiative by the then Howard Government in its 2006 "WorkChoices" legislation to limit unfair dismissal claims to those employers with more than 100 employees is now generally accepted to have been too harsh. It is also generally accepted that those laws contributed at least in part to the unions’ successful "Your Rights at work" Campaign, and the consequent loss by the Howard Government of the November 2007 Federal election.

We at the Workplace Solutions Group have certainly seen instances where unmeritorious claims have been made against our clients, and these can be an extremely frustrating and costly experience for employers, particularly where the employer is not large.

But with the benefit now of 20 years of "unfair dismissal" claims in the Federal and State arenas, there seems to me to be some basic "facts of life" that everyone involved in human resources and workplace relations have to accept.

Australia is a signatory to an ILO Convention that creates an expectation internationally that Australia will enact laws that provide employers with remedies against unfair dismissal – so it is too late (and too diplomatically embarrassing) for Australia to "turn back the clock" completely.

The community is very well aware of the existence of unfair dismissal rights, so seriously reducing them or removing them is politically impossible (as the Howard Government found out in the 2007 Federal election campaign).

It is just not credible for any employer, or employers’ association, to contend that "there is no unfair dismissal – employers do not ever sack people unfairly" (because, sometimes they do). The real question is finding the balance between providing redress against unfair dismissal without unduly burdening business.

What then is my advice to small business operators and those businesses that are large enough to employ Human Resources/ Workplace Relations personnel.

In the case of small business (those with 15 employees or less), it is unlikely that any Government will in future attempt to completely exempt you from unfair dismissal claims. Every such employer has to understand that such claims are part of the "cost of doing business" in Australia and that training on how to deal with disciplinary issues is as important to such businesses as training on the financial side of running the operation. They can lobby for modifications and that may be fruitful, but they already have some concessions already – ie no claim where the employee has not completed a one year "qualifying period", special consideration of the fact that no specialist HR personnel are employed and access to the "Small Business" code (although this is of limited assistance).

For larger employers with dedicated HR personnel the lessons include these:


  • Defensive strategies include clear straightforward disciplinary policies, training of line supervisors in how to use them, ensuring that they are always implemented, and ensuring staff are fully aware of them.
  • HR personnel are to be encouraged to assess disciplinary matters with an independent frame of mind, and supported by senior management when they do it, as in that way the business gets the advice it needs to avoid costly claims against it.
  • These strategies also have the positive benefit that staff become aware that the business is likely to treat them fairly, thus fostering a culture where staff will want to be involved and supportive.


About the author

 Peter Punch is a Partner, Workplace Solutions, at Carroll & O’Dea Lawyers