Unfair dismissal laws miss the mark

AS THE complexity of WorkChoices begins to bear down on both employers and employees, there is cause for alarm over the growing confusion surrounding new unfair dismissal laws.

The imbroglio has been highlighted by the case of the Cowra Abattoir where 29 workers were sacked and told they could apply for fewer positions at reduced rates of pay. Following an investigation by the Office of Workplace Services, the company has since withdrawn notices of termination but the incident, and others like it in recent weeks, has only served to increase anxiety over implementation of the new legislation.

Speaking on the outcome, Kevin Andrews, Minister for Employment and Workplace Relations, did little to quell fears. “All parties ought to be aware that there are a range of rights and obligations in this legislation. There are rights, which employees have, and rights which employers have. There are obligations which employers and employees have and people ought to be aware of those,” he said.

Making sense of those rights and obligations, from the 2,000 pages of WorkChoices amendments to the Workplace Relations Act 1996, is where a lot of the anxiety is coming from.

“I think that what we’ve got here is very much a charter for the employers,”said Russell Lansbury, professor of work and organisational studies at the University of Sydney.

“Now I don’t think that the employers will use the charter or want to have such a charter … [but] I think that it’s very much geared towards one side rather than the other.”

He argued, however, that employers were struggling to come to terms with the changes. “I think that employers are very uncertain about what they can do under this legislation, and although it will take some time to work itself through, I think that some are saying we wanted more of a voluntarist (sic) system – not one that is going to cause us to have to go more to the lawyers to get results,” Lansbury said.

Many stakeholders “don’t quite understand what is going on now. Both sides are … holding back on doing anything on the legal front because they’re a bit afraid to move,” he said.

“If they make a false move are they going to, on either side, incur big penalties? Or in the case of the [Cowra] Abattoir, is the Government going to come down hard on them because they want all these things to go quietly rather than in a blaze of publicity?”

It would seem that, in the case of unfair dismissal, there are two problematic clauses in the legislation.

“Previously workers had been protected by laws which prohibited sackings if one of the reasons for the dismissal was that the worker was entitled to certain pay and conditions under an industrial award or agreement,” said Greg Combet, secretary of the ACTU.

“This law stopped employers from being able to sack their employees and replace them with workers on lower terms and conditions.

“But Section 792 (4) of the Government’s new laws specifically waters down these protections and only provides protection to workers where it can be proven that the ‘sole’ or ‘dominant’ reason for a dismissal was that the worker was entitled to certain pay and conditions under an industrial award or agreement. This change has significantly watered down previous protections for workers against being sacked and replaced by cheaper labour.

“In addition, a clause of the new industrial relations laws protects big businesses from any unfair dismissal claim where a worker is sacked for so-called operational reasons. No such exemption existed under the previous industrial relations laws.”

For HR professionals caught in the middle, there are three major changes to unfair dismissal laws to be aware of. “Businesses with less than 100 employees are exempt, although the Senate amendments mean that related companies’ employees are included in the total number,” said Alan Colman, special counsel in employee relations at Freehills.

“No employee can bring an unfair dismissal until they have served a six month qualifying period – note that this only applies to employees whose employment commenced after 27 March 2006 – and terminations for genuine operational reasons are excluded.”

The grounds for operationally-based dismissals “might include a need to downsize because of a downturn in business, a plant closure, or a certain function or activity ceasing to be undertaken by the employer concerned,” Colman said. “If operational reasons are found not to be genuine – if they are used as a pretext for sacking employees on other grounds – an unfair dismissal action could be brought.”

In such instances, alternative legal actions workers might be advised to pursue include: “claims for unlawful termination or discrimination, or breach of contract. If the reason for termination is related to an employee’s union membership, or his/her entitlement to the benefit of an award, workplace agreement, or minimum terms and conditions, he/she could bring a freedom of association claim against the employer seeking penalties, compensation and injunctions.”

Meanwhile, the ACTU has continued to call on Kevin Andrews to protect workers after 70 field technicians were sacked by Optus, and asked to re-apply for jobs as independent contractors on lower wages and conditions.

“The new IR laws will help big businesses like Optus but they are already starting to hurt ordinary working families,” said ACTU president Sharan Burrow.

“The Optus sackings are also a test of the new IR laws and the ability of big businesses to sack their workforce on the basis of operational reasons,” she said.

“The new IR laws are a disaster for working families. How can you budget to buy a house or to educate your children if you have no job security and no security of income or leave entitlements?”

Lansbury noted that “people are really very fearful and eighteen months down the track [the outcome of WorkChoices] is still going to be very unclear.”