Unfair dismissal claims climb 35% under Fair Work Act; expert disputes Government claim “go away” money is back

The Government says there is no evidence that employers are being forced to pay “go away” money to settle unfair dismissal claims, despite new statistics revealing the number of unfair dismissal claims has jumped 35% under the Fair Work industrial relations regime.

But the Government’s claim has been rejected by a leading IR expert, who says most claims are being settled with employers paying up.

Parliamentary Secretary for School Education and Workplace Relations, Sentator Jacinta Collins, said in speech to the Industrial Relations Society of Victoria annual convention that “process outcomes under the new unfair dismissal provisions have been very encouraging.”

She said the number of claims in the 12 months to June 18 was 10,751, compared with 7,994 claims in 2008-09, when the Howard Government’s WorkChoices rules were still in place.

Collins says the increase was likely due to the fact employees of businesses with less than 100 staff are now able to make claims, as well as the fallout from the GFC.

She also said Fair Work Australia’s conciliation process, which is designed to solve claims before they proceed to a hearing, is working.

“In the first 11 months of the operation of the Fair Work Act, 83% of matters that were conciliated were resolved at conciliation. This compares with a settlement rate of 75% in 2008-09.”

Despite the high settlement rate, Collins says “go away” money has not made a return.

“There is no substantiated evidence that businesses are paying “go away” money to unmeritorious claims.”

But IR lawyer Peter Vitale, who has been involved in several dismissal claims in the last year, disputes that.

“I’ve been involved in a number of cases, and every one of them, with one exception, has been settled at or close to conciliation by the payment of money by the employer,” he says.

He says that if you extrapolate Collin’s statistics, 5,995 claims were settled in 2008-09, compared to 8,923 of claims settled up to June 18, 2010.

“Does she think that 3,000 more cases settled because the employee got to conciliation, shrugged their shoulders and said, ‘Okay, I accept my employment was properly terminated’. The main reason that there no substantiation of “go away money’ in the official statistics is because the terms of settlement are almost always confidential,” Vitale says.

“Commonsense and the numbers tell the story quite adequately without the spin.”

“I find it frankly incredible that the government could make that claim. If you’ve got a dramatic increase in claims and a substantial number of those claims settled before appearing the tribunal… the only logical reason they are being resolved is with go-away money.”

Vitale says that despite Labor’s claim before the 2007 Federal Election that the Fair Work regime would make unfair dismissal cases easier to resolve, employers find the prospect of going to a Fair Work hearing as unattractive a proposition as it was under previous Liberal and Labor governments, and are more likely to settle claims and get on with business.

In other IR news, new IR Minster Chris Evans has written to Fair Work Australia warning that some existing state-based awards may need to be retained after the transition to the Government’s Modern Awards system is complete.

Evans is worried some employees may not be covered by a new Modern Award, and may therefore lose out on pay and conditions.