‘Go away money’ regularly paid out to workers

THIRTY-SEVEN per cent of Australian businesses regularly pay ‘go away money’ to employees, because paying them out is preferable than defending the business against speculative and vexatious unfair dismissal claims.

A recent survey of 900 companies also found that another 30 per cent claim this practice occurs occasionally.

Conducted by Australian Business Limited (ABL), the poll also found 65 per cent of companies have experienced, or know of, speculative unfair dismissal claims by workers. “The payment of ‘go away money’ by businesses to former employees is rife,” said Mark Bethwaite, Chief Executive of ABL.

“Business tends not to speak publicly about it because [they] do not want to encourage the rorters and con artists from exploiting even more businesses.”

The findings add weight to calls for changes to the current unfair dismissal regime, he said. “The fact that one in three businesses has been subjected to, or know of, a speculative claim proves that the current unfair dismissal regime is broken and needs replacement, not just fixing.”

Fifty-seven per cent of companies rated the current unfair dismissal regime a moderate or major concern when considering whether or not to employ more people. “Former employees know that it costs employers thousands of dollars to defend an unfair dismissal case. Small businesses in particular cannot afford to close their business, often for days, to defend themselves against such actions,”Bethwaite said.

Federal Opposition leader Kim Beazley recently acknowledged the scale of the issue.

“The problem that they (employers) confront, is when you get a bloke, or a person who is an employee, who’s a con artist, a rorter, who knows that if you can get the small businessman to shut his shop for a couple of days, drag him down to the IRC, put him through the mill it’ll be worth ten grand for him to send you away,” Beazley said on ABC Radio Brisbane last month.

“And you get a lawyer who’s prepared to do it for that and take three from you and you take seven and walk out the door.

“We now have bi-partisan recognition of a national problem. The system is clearly unfair and that is why business supports the Federal Government’s attempts to bring balance to unfair dismissal regime.”

Bethwaite said the prevalence of ‘go away money’ demonstrated the serious deficiencies of the current unfair dismissal regimes where employees can make speculative, no risk claims against employers.

The survey also found that 62 per cent of businesses support the Federal Government’s plans to exempt businesses with less than 100 employees from unfair dismissal laws.

To date the general approach adopted by the various commissions around Australia for determining the fairness of a dismissal has been to consider two issues. Firstly, did a valid reason exist to dismiss the employee? And secondly, was a fair procedure followed by the employer in dismissing the employee?

Seven tips to avoid a dismissal turning into an “unfair dismissal”

1. Plan the approach carefully if faced with the prospect of dismissing an employee.

2. Keep a written record of warnings that are clear and unambiguous.

3. Ensure that the reasons used to support the dismissal are supported by reliable facts; include the circumstances and reasonings leading to your action/decision.

4. Ensure the employee is given an opportunity to respond to any allegations of misconduct or poor performance.

5. Give the employee a fair and reasonable opportunity to improve – where performance-related reasons are the issue – before the decision is made to dismiss.

6. Investigate allegations to ensure there is a basis in fact for the reason before dismissing the employee.

7. Ensure that dismissal is the appropriate penalty for the employee’s transgression.

Source: www.australianbusiness.com.au