Chapter 9 - The impact on job security, unfair dismissals, job prospects, the protection of employee entitlements and conditions and whether these can be improved
Job Prospects and Job Security
The nature of employment in Australia has been
transformed over the past 20 years, and especially over the past three years.
The most significant element in this transformation has been the decline of
what could be called traditional lifelong and standard-time employment and its
displacement by less secure forms of employment such as casual, part-time,
fixed term and other forms of contingent work.
Evidence to the Committee demonstrates that the
pace of this change has picked up considerably over the past ten years. More
insecure or precarious forms of employment have grown almost ten times the rate
of growth in standard employment. From August 1989 to August 1999, the number
of casual employees in Australia rose by 69 per cent and the number of other
employees by 7per cent.
Between 1996 and 1998 alone, the number of full-time casual employees rose
10.5per cent and part-time casual employees by 3.6 per cent. One in four Australians is now
in casual employment.
The extraordinary rate of growth of
casualisation in Australia can be linked to various developments such as
globalisation of the economy, corporate restructuring and development of new
technology and new forms of work organisation. It can be linked also to labour
market deregulation, which was the basic area of concern to the Committee.
Evidence to the Committee demonstrates that, under present and prospective
labour market deregulation policy, the growth in casualisation has led to an
‘explosion in precarious employment without security or the entitlements which
attach to permanent employment’.
This development has led to the concern that a
dual labour market is emerging in Australia, divided between those in standard
jobs and those in non-standard jobs.
People in the latter category tend to have jobs at what has been called the
boundary of employee and non-employee status, with unfavourable wages and
working-time arrangements. They tend not to have the same rights and
entitlements as those in standard jobs: less protection from awards, unions and
tribunals, less access to structured training and less influence over how or
how long they work. Though these jobs are not attractive to the bulk of
unemployed people who want regular, full-time work, their ‘increasing
preponderance’ draw in many of the unemployed.
‘Such workers are less likely to be productive if they have fears about job
security, if their terms and conditions of employment are under threat, and if
they do not have a right to fair treatment at work’.
The apprehension and insecurity that go with
precarious forms of employment apply with particular force to women workers and
young people. Such issues and others that confront these workers are discussed
in Chapter 7 of this report.
Labor senators strongly agree therefore with the
view of the Queensland Government that this is a significant public policy
issue that should be addressed through the industrial relations legislative
A wide range of evidence to the Committee makes it clear, however, that neither
the Act nor the Bill provides the wherewithal to address the issue. Indeed,
the indications are that the effect of both is to aggravate the social and
The proposals in this Bill take no account of this and other
changes; instead they are likely to increase the growing number of
Australians that are outside the protective capacity of agreements or awards
and denied the genuine possibility of union membership and the capacity to
The Minister has argued that the growth in
casualisation (and presumably therefore the need to deal with its consequences)
has come to an end: ‘...you’ve just heard Leigh Hubbard say as a bald fact that
casualisation has been rising. Well actually that is not true.’ Evidence to the Committee
shows that the Minister is wrong.
...this is the first time I have ever heard that claim
made...Australia now has one of the highest rates of casualisation in the OECD,
second only I believe to Spain. The rate of casualisation, according to ABS
figures, is currently running at about 26per cent and that has increased...from something
approximating 14per cent in the early 1980s....There may well be some individual
pockets of the labour market where there have been trends in the opposite
direction. But to make a broad claim that casualisation has been decreasing is
without any substantive evidentiary basis that I am aware of.
One witness has suggested that the Minister’s
comments are ‘really in defiance of the ABS figures’.
The explosion in precarious employment and the
workplace experience that goes with it confirm the logical conclusion from the
evidence that one of the effects of casualisation is mounting apprehension and
insecurity among employees. The evidence demonstrates that this apprehension
and insecurity is considerable, serious enough to engage the attention of a responsible
government that should be interested impartially in balanced workplace
relations. This is the view of the State governments that provided submissions
and evidence to the Committee’s inquiry.
The Queensland Government recognises...that workers are less
likely to be productive if they have fears about job security, if their terms
and conditions of employment are under threat, and if they do not have a right
to fair treatment at work...Industrial relations legislation needs to keep pace
with (changes in the nature of employment) and new perspectives need to be
developed. More of the same is not an option. Further labour market
deregulation does not provide the response needed to address these issues.
The need to ensure that employees are properly protected is made
greater by the growing incidence of various forms of “precarious”
employment...Casual employees are much more likely than permanent employees to be
excluded from standard benefits, receive lower rates of pay and be exposed to
employment insecurity. Against this background, the objective should be to
increase the protection available to workers, rather than diminish it further
as would occur if the...Bill were enacted.
We were therefore surprised by the Commonwealth
Government’s assertion through the evidence of the Department that, while the
precarious nature of jobs has increased and workplace regulation withdrawn,
‘perceptions of job security have continued to improve under the WR Act’. The department’s ‘range of
evidence’, once the AWIRS95 data are excluded (because they actually refer to
pre-1996 conditions), consists only of the Morgan Poll series data which show
that perceptions of job insecurity ‘have not changed dramatically’ between 1975
and November 1998.
A more recent survey conducted by the Saulwick organisation for Job Futures is
reported also to have found a majority of respondents who are ‘secure in their
Without being critical either the Morgan Poll data, gained from telephone
polling of 543 people, or the Saulwick canvass of 1,000 people, other more
comprehensive polling produces quite different results.
A survey of 6,770 respondents in more than 100
industries conducted by ACIRRT for the ACTU in 1998 is an example.
The ACTU report arising from the survey (Employment Security
and Working Hours -- A national survey of current workplace issues) found
‘a significant perception by employees of increased job insecurity over the
last 12 months...Key findings of the survey are:
- One third of respondents said that there had been a decline in
job security, with 23 per cent reporting a growth in casualisation, 23 per cent
a growth in contract employment and 19 per cent increased fixed term
employment. Fifty four per cent gave increased job security as a key workplace
- Fifty nine per cent of casuals and sixty per cent of fixed term
employees said that they wanted permanency.
Apart from the inherent insecurity associated with these
precarious employment forms, employees also miss out on a number of significant
entitlements that are normally attached to permanent employment. Examples of
- Casuals do not receive annual leave, personal/carer’s leave,
parental leave, notice of termination or redundancy pay. In many cases they do
not receive long service leave, even if they have been employed on a regular
basis for the required length of time. The casual loading, which varies from
15 to 25 per cent, does not fully compensate for the loss of these
- Independent contractors also do not receive these entitlements,
even in cases where the contract is for labour only.
- Employees of contractors lose entitlements when the principal
changes the contractor, even if their employment continues with the new
contractor, as this has not traditionally been viewed as a transmission of
business for the purposes of...the Act...
The ACIRRT survey found that the issue of
working hours was associated with the problem of precarious employment and job
insecurity. This issue was characterised by increased unpredictability and
insecurity of hours and either excessive or insufficient hours.
...only one third of employees now work a ‘standard’ working week
of 35-40 hours, while others work multiple jobs, are part-time wanting more
hours, are unemployed or working unpaid overtime...
Sixty five per cent of respondents...reported an increased amount
of work, 59 per cent reported greater stress and 56 per cent an increase in the
pace of work over the past 12 months...
The Queensland Government has also pointed out
that a number of qualitative surveys (pointed) to the increased prevalence of
job insecurity in the Australian community.
For instance, the Middle Australia project conducted in 1997
produced survey data that pointed to some of the uncertainties and anxieties
experienced in today’s labour market. The survey found that 63 percent of
people considered their income and job prospects were decreasing...
(These and the ACTU) figures suggest that regardless of economic
indicators that show signs of improvements, if people feel insecure in their
jobs then the appearance of a stronger economy has little meaning for them.
This view is confirmed by recent community-based research that ANOP conducted
for the Australian Industry group (ANOP, 1999). ANOP found that while the
benefits of low mortgage interest rates and falling unemployment are
recognised, positive comments are often qualified by fears such as job
insecurity. During focus groups, ANOP regularly heard comments like:
the economy is meant to be in good shape. Okay. But I’m still struggling.
unemployment is meant to be falling. Okay but my job isn’t safe...job security
is a thing of the past.
The move towards a more deregulated system therefore has been
associated with the growth of less secure forms of employment...The concern in recent
times is that a dual labour market is emerging that is leaving behind many of
those in non-standard, precarious employment. This is a significant public
policy issue that the Queensland Government believes can and should be
addressed through the industrial relations legislative framework.
As well as the stress created by uncertain work, this sort of
employment can limit a worker’s future options -- for buying homes, planning a
family and household budgeting -- because of financial uncertainty. Many
people become stuck in the vicious cycle of unemployment and casual, short-term
low paid jobs. There is also a strong connection and a great deal of movement
between low-skilled, insecure employment and short-term unemployment,
especially among young people. Many of these find that opportunities for
secure full-time employment are closed to them -- often casual employment does
not appear to be a stepping stone to more secure employment.
Impact on employment security of
the Workplace Relations Act 1996
This and other evidence to the Committee
demonstrates the close connection between the insecurity in the labour force
and economic change that has brought about, among other things, the
extraordinary growth in Australia of precarious employment. Labor senators do
not argue that change should be resisted. What must be said is that it is the
responsibility of good government to manage change and ameliorate its
consequences. Evidence to the Committee shows that the Government’s policy, as
it is seen in the 1996 Act and the 1999 Bill by community organisations and
others who are interested in the consequences, not only does not deal with
these consequences but also that it will in many ways aggravate them.
(The Act) has failed to address the changing nature of the
labour market today, including the increase in female employment and the growth
in casual, part-time and contract work employment...
(It) has removed the protections available to those working in
irregular, insecure forms of employment...the award simplification process...places
under threat many important safeguards and conditions of employment, ignoring
the fact that large numbers of workers, including any in low-paid, non-standard
forms of employment, continue to rely on awards for their terms and conditions
This and other
evidence to the Committee shows in other words that the Workplace Relations Act
1996, which eroded the protective capacity of the award system, reduced the
powers of the Commission and the unions and left many employees to fend for
themselves in bargaining for their wages and conditions, has had a particularly
severe effect on those in precarious forms of employment. The Government
claims that its next round of so-called ‘reform’ would create more jobs, bring
about better pay and improve productivity and competitiveness. Evidence to the
Committee shows that it would entrench the inequity and disadvantage which the
1996 legislation created and which has caused so much apprehension and
insecurity among employees.
on employment security from the proposed Bill
In his second
reading speech on the Bill, the Minister, explaining that workplace relations
do not involve only economic considerations, said that they were ‘also about
human relationships, about fair dealing between employers and employees and
about social considerations, such as getting the relationship between our work
and family life better balanced and giving the many unemployed an opportunity
to compete in the labour market’.
This next phase of reform therefore, while it would continue to maintain the
safety net for the low paid and disadvantaged, would also provide more choice,
eliminate centralisation and control and remove unjustified cost to employers.
What his Bill actually proposes is:
- to further weaken the role
and capacity of the Commission;
- to continue stripping back
the award system and its capacity to protect working conditions;
- to inhibit effective
independent scrutiny of individual agreements and discourage efforts to reach
- to put extra restraints on
employees taking protected industrial action; and
to obstruct unions from
carrying out their responsibilities to protect their members’ interests.
A great deal of
evidence came before the Committee on the implications of award simplification
on workers vulnerable to discrimination. Outworkers in particular were
highlighted as a category of workers who’s situation could be jeopardised under
the bill’s proposals.
The (TCFUA) was forced to
conduct a test case to convince the...Commission to preserve the current clauses
in the Clothing Trades Award that protects outworkers. The award
simplification case for outworkers involved a lengthy and expensive court
case...This case...achieved a successful outcome even though the Federal Government
challenged the...case and argued to reduce award protection for outworkers...
The (Bill) will mean
reviewing this lengthy process again. This will be both time and resource
intensive for all parties...
If this legislation is
passed, the union will not be able to go into workplaces and check the
records. This is a major concern. In the past, federal and state governments
had inspectors who did this work but now this is no longer done. The union is
the only organisation actively seeking to enforce award compliance in an
industry long known for its exploitative practices. Further limiting unions’
right of entry will make it easier for companies to break the law and remain
undetected. It will allow sweatshops and exploitation to continue and
It was evident to the Labor senators that the
most vulnerable sections of the workforce would be hurt most.
Any further reduction in the
number and range of allowable matters will remove entitlements from those
vulnerable sections of the workforce who do not have the bargaining strength to
The lower paid are the most
vulnerable to exploitation and it is unreasonable to expect that they could
improve their position by “disarming” the organisations that have an interest
in ensuring compliance with awards and agreements. The Bill does not provide
an adequate means to fill the gap if unions are marginalised from the system...
...there is no sustained case
based on research and evaluation of the current system to justify the changes
proposed in this Bill.
As evidence to the
Committee shows, this is not the way to ‘fair dealing’. It is not the way to
ensure ‘a fair go all round’. It is not the way to bring about security in the
...in its preoccupation with
restructuring the influence of awards and unions, this Bill fails to deal with
the most serious workplace and labour market problems facing Australia. In
particular, the serious problems I think we should be concerned about are:
firstly, casualisation and job insecurity; secondly, working hours; and,
thirdly, the proliferation of low wage employment. Indeed, the bill on my
estimation and the estimation of others, is likely to exacerbate these problems
rather than ameliorate them. While average wage outcomes...have improved...wage
inequality has increased. What we are seeing is a polarisation in the
Australian labour market...
Award stripping, the
encouragement of Australian Workplace Agreements, the limitations on the role
of the Industrial Relations Commission...will lead to increased wage dispersion
and therefore to more inequality. The growth of casual and contract work and
the decline of full-time permanent employment, with the rights, entitlements,
protections and security that implies, has also been greatly affected. This
Bill does nothing to address these problems, nothing to protect the conditions
of casual workers and nothing to enable them to seek more security or better
compensation for their insecurity or their access to career paths.
...it is difficult to understand
the further attacks on awards, the Commission and unions as anything other than
ideology. It is difficult to see the logic of what is going on out there in
the Australian labour market as justifying the Bill.
It is important however, to note that other
forms of employment which would not usually be considered precarious could be
considered problematic. An example of this is provided by the AFP Association
which drew attention in its submission to the continuing judicial indecision
over whether or not a member of a police force is an employee, and consequently
would attract protections under unfair dismissal legislation and other related
There has been much judicial division about whether or not a
member of a Police Force is an employee.
The uncertainty of the status of Police as employees is
highlighted in the decisions of Marshall J. and Moore J. in Konrad and Ward
respectively...There is, however, a clear risk that the courts may uphold the
line of authority in Perpetual Trustees and decide that Police and AFP members
are not employees for the purposes of the Workplace Relations Act generally,
with the exception of Division VIA. This requires urgent clarification and
should be considered as a matter for inclusion within any amendments to the
Workplace Relations Act.
believe that job security is important for all workers. All workers should be
covered by an industrial instrument. This includes workers not in a typical
employment relationship, such as those in precarious employment and those whose
employment may prove problematic in this area. Such workers include independent
contractors (discussed in Chapter 11), outworkers and Police.
The great majority of employers are diligent in
setting up processes to meet their liability for accrued employees'
entitlements in the event of insolvency. Over the past two years, however,
there has been a spate of cases in which companies becoming insolvent have not
put aside sufficient assets which would allow their employees to be paid their
lawful accrued leave and other entitlements.
Some of these cases have become notorious
because they have involved many employees being owed many millions of dollars,
causing great hardship to them and to their families. Moreover, the hardship
has been aggravated in some instances when company insolvency and the loss of
employees' lawful entitlements have occurred in regional and rural centres
which already suffer more than their fair share of economic and social disadvantage.
The Committee heard evidence from individuals
who were able to relate their own personal experiences of such situations. The
following is an example from Mr Anthony Dick:
I was one of 100 people working at the Parrish Meats. I had been
there for just under 10 years. I turned up for work on Monday, 16 August. I was
called to the general manager’s office by someone I did not know. I was told
that he was a liquidator appointed by the court and that Parrish Meats was
closing down. I was informed by the liquidator that it would be appropriate for
me...to leave the premises immediately...
We would come out of this closure being paid annual leave, long
service leave and superannuation. I would not get their seven per cent, which
they were supposed to be paying for me. It had not been paid for quite a while.
There was no provision for the breach of contract. I would not be getting that.
I would also not be getting my redundancy pay either, which brings to a total
the amount of over $22,000.
As of this date, I have not received anything at all...There are
more meetings to come, and I am still a bit concerned at this point whether or
not I am going to get my annual leave and long service leave as an entitlement.
I have just about written off the rest of it. I have virtually been told that
there is no money there, that I cannot get it . It has also been indicated to
the rest of the workers that, if they do not take this, they might not get
anything at all, which I think is very unsatisfactory and, as I said, I had been
there for probably a couple of weeks under 10 years.
The Government has responded to this trend by
producing a discussion paper which proposes two options for protecting
employees' entitlements in the event of company insolvency.
The Government's discussion paper identifies
options for dealing with this issue which require the use of taxpayer funds.
Both its Basic Payments Option and its Compulsory Insurance Option are
inadequate in that neither of them will protect 100 per cent of employees’
Not only is it unacceptable that the Government
has taken so long to produce the discussion paper, either end result is seen as
inadequate by some.
With regard to protection of employee entitlements, we say that
the ministerial discussion paper on this topic is an important step forward,
and we do not shrink from that, but at the same time we underline that it falls
far short of what we regard to be an equitable system. The basic approach that
we have here is the requirement that any legislative change should ensure full
payment of accrued entitlements. That is the point that we would underline.
For a smaller call on taxpayers, Labor has put
forward a third option which could offer a better, more comprehensive, less
cumbersome and less bureaucratic solution. Moreover, though it envisages 100
per cent protection of employees' entitlements as against the Government's
limited protection, it could be more affordable.
The Committee received limited evidence on the
issue of protecting employee entitlements in the case of corporate insolvency,
it appeared to be overwhelmed by the broad scope of this inquiry. The Labor
senators therefore maintain the position that the issue of protecting employee
entitlements in the case of corporate insolvency should, as a priority, be
looked at closely through a separate committee inquiry.
In this climate of precarious and contingent,
and therefore insecure, employment and in light of convincing evidence to the
Committee that has been discussed above, we say that, in both the Act and the
Bill, the law relating to unfair dismissals is harsh and unfair to employees.
The present Government came into office with a
policy to abolish altogether the previous Government’s unfair dismissal
regime. In the event, it did not go so far, putting in place instead in the
Workplace Relations Act 1996 and other legislation various changes to the
unfair dismissal provisions of the Industrial Relations Reform Act 1993.
These changes effectively narrowed opportunities for employees seeking remedy
from unfair dismissal through such provisions as:
- excluding from protection under the law numbers of employees,
- introducing new costs and charges for applicants;
- limiting access to conciliation and arbitration of applications; and
- transferring the onus of proof in determining applications from
employers to employees.
The consequences for employees is that the first
ever rights-based regime of remedy for unfair dismissal has been reduced to
what has been described to the Committee as one of only ‘minimalist
The Committee has received considerable evidence
of the consequent significant and negative impact on employees from community
and other organisations which represent disadvantaged employees and which are
not directly concerned with the clash itself of workplace interests so much as
its effects. This evidence shows that in significant respects the 1996
legislation actually denies the guiding principle in S170CA(2) of a fair go all
round, the establishment and support of which had been specifically pledged by
the Prime Minister before the election that year.
The intracacies of the process, of seeking
remedy from unfair dismissals are covered below.
The broadening of categories of employees who
are inelegible will lead to a grossly unjust and unfair system.
The broadening of classes or categories of employees who are
deemed to be ineligible...has widened the net of workers who have no statutory
rights to have their claims heard and assessed on their merits...
In particular, the extension of ineligibility relating to casual
and fixed term employees has a considerable impact...on the numbers of
employees being able to access the termination provisions...
The rationale for the exclusion of trainees on registered
training agreements is also problematic given the extensive concessions and
financial assistance provided to employers when they employ a trainee...
In the experience of Job Watch many employees who would
otherwise have strong arguments in relation to the unfairness or unlawfulness
of their dismissal are automatically denied access to the process because of
these technical and arbitrary exclusions. We highlight these 2 specific
exclusions because their impact on our client base is more apparent. However,
in our view the whole area of exclusion needs to be revisited and its rationale
In circumstances where the government regulates the operation of
the labour market by establishing a private legal right of action to individual
workers, the cost involved in enforcing this right is a major issue of
Employers can obtain costs against employees in circumstances
where the Commission has begun arbitrating a claim, and:
- the application is made vexatiously or without reasonable cause;
- the applicant acts unreasonably by failing to discontinue the
- the applicant discontinues the application
- the applicant acts unreasonably by failing to agree to terms of
settlement that could lead to the discontinuance of the matter.
In contrast, Employees can only obtain costs against employers
where the Commission has begun arbitrating, and:
- The respondent acts unreasonably by failing to agree to terms of
settlement that could lead to the discontinuance of the matter.
- The respondent acts unreasonably by failing to discontinue a
Therefore, the current cost regime clearly favours employers
and, according to the explanatory memorandum accompanying the Workplace
Relations and other Legislation Bill 1996, was motivated by a desire to
‘discourage applicants from making applications which are without reasonable
foundation.’ The current regime is unfair to employees and should be
modified. Currently, the system fails to provide applicants with adequate
opportunities to seek redress against respondents for vexatious or unreasonable
conduct in the course of proceedings. In addition, the extremely limited
amount of compensation available to arbitration for successful applicants is
further eroded by the fact that applicants must bear their own costs in
asserting their legal rights.
The introduction of a filing fee for the
application of an unfair dismissal claim aims to discourage spurious or
unmeritous claims. The major objection to such a fee is that a real cost
barrier is imposed up on those dismissed employees with genuine claims from
While it is assumed that filing fees discourage spurious
applications or those without merit these claims are often unsubstantiated, and
in fact act as a barrier to justice. Furthermore, these fees are often imposed
at a time of considerable stress and hardship. There is an important argument
for the removal of the filing fee altogether. In both the Victorian and
federal anti-discrimination jurisdictions there is no filing fee for
applications. Neither jurisdiction complains of speculative or spurious
Taken together (the filing fee and costs provisions) act as a
real barrier to a dismissed worker irrespective of the merits of the claim. A
worker who has been unfairly dismissed, who is not generating an income, is not
sure where his/her next income is coming from, who is not in a position to
engage legal counsel is clearly in a disadvantaged position under these
proposals. They are heavily weighted against employees...The imposition of a
cost barrier is in breach of the requirement that a terminated employee is
entitled to an avenue of appeal regarding the dismissal as is shifting the onus
of proof from the employer to the employee.
Time limit for applications
Under the previous Industrial Relations Act 1988 the time limit
for applications was 14 days after written notice of termination was received
by the employee. Under the Workplace Relations Act 1996 this was amended to 21
days after the termination takes effect.
The difference...is significant. The former requirement for
notice to be in writing placed an important obligation on employers to confirm
to the employee the reason why they were being dismissed. The Parliament and
the courts and Commission has consistently accepted that it (is) an element of
natural justice and due process that employees be given a reason for their
The period of the time limit itself also demands attention given
that it would have to be one of the shortest time periods for filing legal
proceedings of any jurisdiction not only in Victoria, but in Australia. Whilst
the need for applicants not to sit on their rights is understood and
appreciated, the justification for such a short time limit is not compelling.
These are significant, substantial and so far
unanswered charges as to the partial and inequitable ways in which the 1996
legislation set out to limit access by employees to fair and affordable
remedies against unfair dismissal. Accordingly, Labor senators concur with the
judgment of the Fitzroy Legal Service that the 1996 legislation had ‘severely
impacted on the balance of interests between employees and employers in the
especially as far as they concern unfair dismissals.
Nevertheless, the Government has judged the 1996
provisions to be good and fair. The Coalition declared in its policy for the
1998 election that, as the result of its unfair dismissal changes, the number
of applications against employers had fallen by 49 per cent in the federal
jurisdiction and by 18 per cent in all jurisdictions (‘More Jobs, Better Pay’,
September 1998). In the same policy document, however, it also argued that:
...unfair dismissal laws are still holding back job creation and
deterring employers from taking on new employees. The reform of unfair
dismissal laws needs to go further, if unemployed Australians and young people
are to get new job opportunities.”
In subsequent public debate, throughout the
course of two Senate inquiries and the introduction of its 1999 proposals, the
Government has neither explained this extraordinary contradiction nor provided
evidence for its position that less protection against unfair dismissal means
It was noticeable that in introducing the
Workplace Relations Legislation Amendment (More Jobs Better Pay) Bill, Mr Reith
did not take the opportunity to explain the Government’s assertion that ‘unfair
dismissal laws are still holding back job creation’. Instead, he spoke only of
the need to ease the ‘burden’ on employers, especially small and medium
businesses. In doing so, he probably revealed more of the Government’s intent
than he meant. The evidence to the Committee on the consequences of the Bill
makes it absolutely clear that the Minister’s proposals will ease the burden on
employers for the most part by unfairly increasing it for employees.
We oppose the proposals listed below. As the
following evidence shows, they are not only profoundly unfair but they will
also add complexity and impracticality to what is still basically -- despite
the 1996 changes -- a relatively uncomplicated system.
Exemption of small business
In his second reading speech, Mr Reith included
among seven major objectives for the Bill the removal of ‘red tape and
unjustified cost, especially from small and medium sized businesses, including
in the area of unfair dismissals’. At no point in the speech did he give any
reason or any information for the reason for this objective, which is not
surprising perhaps given the paucity of his argument the last time he advanced
it, during debate on the Workplace Relations Amendment (Unfair Dismissals) Bill
It is clear that the Government has two
significant problems here. One is that the reasons for exempting from the
unfair dismissal provisions is business employing 15 or fewer people are so
threadbare, as his second reading speech shows. The other is that he is
getting little concrete assistance in this regard from the small business
sector, as evidence to the Committee shows. Certainly, the evidence from
practitioners and community organisations involved in representing employees in
unfair dismissal cases shows that they are not impressed by the proposal.
The NSW Government’s submission is of the view
The proposal to include consideration of the size of a business
when determining ‘harsh, unjust or unreasonable’ should not be pursued.
Fairness should be a standard that all workers are entitled to expect. Access
to tribunals and unfair dismissal laws should apply equally to all employees,
regardless of whether their employer is large or small.
The Fitzroy Legal Service considers that the intention of the
(proposal) is to weaken the obligation on small businesses and enterprises in
regards to providing procedural fairness to employees. We are concerned that
any diminution of this obligation sends the wrong message to smaller employers
who, from our understanding are already over-represented in termination of
employment matters. If passed, this amendment would further discourage small
employers from conducting termination processes with fairness and due process.
The Minister’s second reading speech provides no
real explanation of the costs proposals in relation to unfair dismissals,
saying only in the context of his intent to ease further the ‘burdens’ on
employers that ‘access to costs will be widened’. Costs, of course, are among
the most influential of the factors involved in the question whether or not
employees are able to gain the protection of a law whose guiding principle is
‘a fair go all round’.
Evidence to the Committee makes it absolutely
plain that the Government’s costs proposals will put the law out of the reach
of employees who, though they may believe that they have been unfairly or
unlawfully dealt with, are without the means to obtain help in a jurisdiction
where legal aid is not available.
The bill proposes to incur costs against
applicants without ‘substantial prospects of a successful claim’. Only the
applicants are subject to the threatened costs, which in addition to the filing
fee serves to deter workers from accessing claims.
The threat of costs being awarded against people who are often
in hardship situations is an attack on appropriate levels of access to justice
and further complicates a process that disadvantaged applicants very often find
stressful and overwhelming. The possibility of costs being awarded in addition
to a proposal to increase the application fee will reduce the number of claims
amongst those most in need of the protection of sound unfair dismissal laws
which emphasise natural justice. 
The proposal that the Commission may order an
applicant (worker), but not a respondent (employer) to provide security for
payment of costs has been described as ‘particularly pernicious’.
This amendment places an unreasonable burden on applicants
- there is no corresponding provision for respondents to provide
security for costs, thus the provision is directly discriminatory; and
- in many cases applicants would simply not be able to afford to
comply with this requirement. Even if the amendment applied equally to
applicants and respondents, it is far more likely that an applicant would be
disadvantaged by this requirement than a respondent.
Not only would the costs proposals act to make
the system unfair: they would also act to undermine the objective (if indeed
this is the objective) that the system provide a relatively uncomplicated as
well as affordable method of settling disputes.
(The proposals) will in practice see far more respondents making
applications for costs on the basis that it will actively discourage the
applicant from pursuing their claim because of the risk of an order for
security being made by the AIRC. Administratively, this will place an
increased burden on the AIRC.
Job Watch in fact has recommended that these
proposals not be passed into law because of its concerns that they would
...result in respondents making vexatious, punitive or speculative
cost applications, simply in order to deter claims.
Slater and Gordon Solicitors is of the view
(The proposals to subject conciliation proceedings to costs)
would have a detrimental effect on the effective operation of the conciliation
process and impede the rigorous processing of claims.
The amendments provide that applications that are discontinued
prior to an election to proceed to arbitration may be subject to an application
for costs. This would have a detrimental effect on the efficiency of the
system and the practical handling of claims by applicants...(and) would
undermine the practicality, workability and fairness of the system...
(The proposal that settled claims should be subject to costs)
should not be implemented for practical and policy reasons.
In practice, settlement agreements will include a term indicating
that neither party will seek to have costs awarded against the other. If such
a term is not included, it is likely to be due to the inexperience or lack of
legal knowledge of one or the other parties.
On policy grounds, the philosophy and purpose of a settlement is
to resolve the dispute between the parties. Allowing that resolution to then
be the subject of further legal action is antipathetic to the resolution. 
New s.170CDA proposes that if an employee
resigns as a result of the conduct of the employer the employee must establish
that the employer:
- Indicated that the employee would be dismissed
if he or she did not resign
- Had engaged in conduct that the employer
intended to cause the employee to resign.
The onus of proof is thus shifted from the
employer to the employee in adducing evidence of proving the employer’s
This subverts the purpose of the unfair dismissal law, the
object of which is to provide an employee with a remedy where the termination
of the employment relationship is against the will of the employee and
The amendments cut down the scope of the law on termination at
the initiative of the employer and exclude the common law doctrine of
constructive dismissal. The objective of the unfair dismissal law is to remedy
unfairness in employment not perpetuate and reward the arbitrary exercise of
power by an employer who by its conduct deprives an employee of their employment.
The proposed amendments to the law on termination at the initiative of the
employer are misconceived and are likely to lead to injustice.
From their experience in this area, Job Watch
was able to elaborate further on constructive dismissal provisions.
Job Watch provides assistance and representation to many workers
who have been constructively dismissed. The decision by an employee to leave
their place of employment because of the untenable working
environment/situation is invariably an extremely difficult action for that
worker to take. In our experience, workers are far more likely to try and
tough out the conditions and hope the situation improves, rather than make a
spontaneous, although very understandable decision to leave. Employment is
fundamental to a worker’s economic and financial security and it (is) false to
assume such decisions are taken lightly or for vexatious reasons.
The link in the Bill between the...course of conduct, and the
employer’s intention is problematic in the many cases where employees have
ceased employment because of onerous or untenable conditions at work. Job
Watch regularly represents workers who have been forced to leave their
employment because of: workplace harassment and discrimination; workplace
violence; victimisation; and serious breaches of occupational health and
safety standards. These are, unfortunately, not isolated cases. In many
matters, the employer personally had knowledge of and/or participated in the
incidents or should have had knowledge of them especially if they had properly
monitored health and safety conditions in the workplace.
The Bill proposes to exempt relief of employers
from unfair dismissal claims on the grounds of ‘the operational requirements of
the undertaking, establishment or service’, regardless of the capacity,
conduct, skill, or experience of employees. This contravenes the right to
contest the fairness of termination by workers, and opens the way to
exploitation and injustice for employees in the following ways.
...the proposed amendment will result in injustice to employees
in the following situations:
- where employees
are, in fact, selected for redundancy for a reason which has no foundation;
- where employees
are, in fact, selected for a reason unrelated to their conduct, capacity or
- where the
selection process used by the employer, in fact, breaches workplace agreements
regulating retrenchment; and
- where the real
reason for selection involves the employee’s history of workplace activism such
as pursuing occupational health and safety issues or union rights.
...operational requirements should not be used as a threshold
issue with which to remove the legal entitlement of employees to access the
Compounding these injustices is the fact that
employees dismissed on operational grounds are not in any practical position to
check the validity of the above reasons.
Time limit for applications
Currently the Commission has a broad discretion under section
170CE(8) to allow out of time applications in circumstances where it would be
unfair not to do so...
The current Bill proposes that the acceptance of
late lodgements now satisfy ‘exceptional’ circumtances. The proposed amendments
make it more difficult for employees to access fair outcomes as should be
oversee by the unfair dismissals jurisdiction. The time limit does not consider
the difficulties faced by NESB, migrants, those applicants with disabilities,
those applicants subjected to constructive dismissal and those from remote
The 21-day time limit for lodging applications under the current
legislation has been a major disadvantage to unfairly dismissed employees...The
proposed amendment is unfair, unnecessary and would eliminate a large number of
meritorious claims on an arbitrary basis. Such a provision would certainly not
provide a “fair go all round.”
...It should be borne in mind that an employee has six years
(with the possibility of an extension of time) to file a wrongful termination
claim in the civil courts. The 21-day time limit, if anything, should be
substantially increased to ensure access to employees, particularly those with
additional barriers to accessing legal advice (for example rural employees,
migrants or employees with disabilities).
Merits review/Dismissal of claim at
The Bill proposes that:
The AIRC will be required at the conciliation stage to make a
finding as to whether or not a claim is likely to succeed, with the employee
stopped from having the claim arbitrated if the Commission says it is unlikely
Several concerns arise out of such a proposal.
It is procedurally unfair that judicial power be exercised to make an
assessment at the conciliation stage. Arbitration is not predictable and the
informality of conciliation conferences are not suitable for testing the
veracity of matters. For example, witnesses are not called. Jobwatch also points out that an
applicant would have no avenue of appeal if a conciliator assessed their case
as unlikely to succeed.
The merits review of unfair dismissal claims at
conciliation is not supported by employer and employee groups alike.
Ai Group wholeheartedly supports the objective of introducing
greater rigour into the processing of ‘unfair dismissal’ applications, however,
it believes that the mechanisms proposed...may frustrate rather than promote
Current practice is that conciliation conferences are relatively
informal proceedings, with applicants and respondents making unsworn statements
giving a summary of the facts as they know them and an indication of their
attitude toward various forms of settlement. In the great majority of cases,
such a process is not suitable for testing the veracity of the matters stated
by the parties to the extent required to support a finding on the balance of
The Bill proposes that practitioner’s disclose
whether cases are conducted on a ‘no win, no fee’ contingency basis.
The rationale for (the proposal) is not revealed in
the..Explanatory Memorandum. It appears (it) has its genesis in the Australian
Democrats’ Minority Report (on the Workplace Relations Amendment (Unfair
Dismissals) Bill 1998 which stated that) “cases being conducted on a ‘no win,
no fee contingency (sic) basis should be a matter of public record”.
While the jurisdiction is prima facie a no costs one, the
Commission does have power to award costs in some circumstances, including a
power to award costs on an indemnity basis. The terms and basis on which
contingency agreements may be entered into...are governed by legislation and/or
the ethical rules of the Bar in each state. There is no justification for the
imposition of an additional requirement that practitioners disclose the basis
on which their services are engaged...The basis on which a legal practitioner
is retained reveals nothing about the merits of the case of the party in
question, nor can it be relevant on the question of costs.
Labor senators agree with these criticisms by
practitioner and community organisations of the ways in which the proposed
amendments act to limit and obstruct access to fair and affordable remedies
against unfair and unlawful dismissal. Taken together, these proposals would:
- cut off claimants from sources of financial and legal support,
force them to represent and defend their own interests,
- make the system more complicated,
make settlement more legalistic, and
tilt the balance of influence in unfair dismissal cases squarely
and thoroughly on the side of the employer.
For these reasons, Labor senators oppose the
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