NEW UNFAIR DISMISSAL REGIME APPLIES FROM 1 JULY 2009

Important parts of the federal government’s Fair Work Act came into force from 1 July 2009.  Readers will recall that the new regime is starting in two phases:

A.      Commencing 1 July 2009                                         

1.      Workplace Relations Act repealed                                       

2.      New unfair dismissal laws start                                 

3.      New good faith bargaining requirements start                    

4.      Fair Work Australia starts

B.      Commencing 1 January 2010

1.      National employment standards start

2.      Modern award system starts

3.      No more individual transitional employment agreements can be made

A detailed paper setting out the changes is available on our website and can be accessed from the following link: http://www.workplace-lawyers.com.au/download/Symposium-paper-pdf.

The most important thing to be aware of is the new unfair dismissal regime.  Under the now repealed laws, dismissed employees could not commence an unfair dismissal application if:

1.      the employer had 100 employees or less (including casuals, part time and full time employees); or

2.      the employee had worked for the employer for less than six months.

Under the new system, small employers are protected from unfair dismissal claims only during the first 12 months of employment.  Small employers are essentially defined as those with 15 or less employees.

Employers with more than 15 employees are protected from unfair dismissal claims only during the first 6 months of employment. 

Small employers will also have a complete defence to an unfair dismissal claim if they can demonstrate they have complied with the Fair Dismissal Code for Small Business.  The code requires that:

1.      an employee must be warned clearly that they are not doing their job properly and will have to improve or be dismissed.  There is no requirement for multiple warnings; and

2.      the employee must have had a reasonable amount of time to improve and have failed to do so. 

Compensation remains capped at 6 months wages with reinstatement the primary remedy.  An unfair dismissal application must be made to Fair Work Australia (which replaces the Australian Industrial Relations Commission) within 14 days of termination.

High income employees (earning more than $108,300 per annum) are excluded from the unfair dismissal regime.

The new good faith bargaining, right of entry, industrial action and “general protections” provisions also came into force from 1 July 2009.  We will provide separate information about these matters.