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The federal government has recently announced that new unfair dismissal and bargaining laws will now commence from 1 July 2009, six months earlier than previously stated. This bulletin concentrates on the unfair dismissal changes for small businesses. Under existing laws, dismissed employees cannot commence an unfair dismissal application if: - the employer has 100 employees or less (including casuals, part time and full time employees); or
- the employee has worked for the employer for less than six months.
Under the new system, the prohibition will only apply to employers with 15 employees or less and only during the first 12 months of employment. Employees who are genuinely redundant will still be excluded from the unfair dismissal jurisdiction as will short term casuals, seasonal and fixed term/task employees. The time limit for lodgment of an unfair dismissal claim will be reduced from 21 days to 7 days. Small employers will 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:/div> - 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
- 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. There will also be significant changes to the way in which these claims are dealt with. Claims will be made to Fair Work Australia rather than the Australian Industrial Relations Commission which will adopt a faster and less formal approach to these matters. Whilst full details are not yet available, legal representation will only be allowed in exceptional circumstances where Fair Work Australia determines that a party is unable to represent themselves. Most decisions will also be made without public hearings. The substantive legislation is to be presented to parliament later this year and it remains to be seen whether the opposition parties will seek to amend the legislation. |
Employers