Fair Work Australia statistics cast doubt on whether small business checklist will help SMEs in unfair dismissal cases

Statistics from Fair Work Australia show the industrial umpire dismissed just nine unfair dismissal cases in which the employer had correctly followed the Labor government’s much-vaunted Small Business Dismissal Checklist, which was designed to help protect SMEs from unfair dismissal cases.

The stats, contained in Fair Work Australia’s annual report, tabled in Parliament yesterday, confirmed that applications around termination of employment issues soared by over 63% to 13,054 in 2009-10, of which almost 10,000 were unfair dismissal cases (the others were adverse action and unlawful termination claims).

The report shows 81% of these were settled at the conciliation stage. About 75% of these settlements involved the employer paying a financial settlement of under $4000.

However, the annual report shows 196 unfair dismissal claims proceeded to a hearing, with 15 resulting in reinstatement, 35 resulting in a payment in lieu of reinstatement and 144 being dismissed.

However, it seem very few small employers were relying on the Government’s Small Business Dismissal Checklist for protection – just nine cases were dismissed on the grounds the employer had followed the checklist.

IR lawyer Peter Vitale says the success of the code “from a small business perspective was always going to be about how FWA assessed how the code had been complied with.”

Vitale says the fact that hearings have become as much about whether the employer has followed the Code as about the dismissal itself means the Code it not nearly as easy to use as advertised.

“It’s not really the point of having a simplified code.”

Indeed, the Code has been criticised on at least two occasions by senior FWA officials. In June this year, Senior Deputy President Matthew O’Callaghan labelled the Small Business Fair Dismissal Code checklist “deficient” because it does not mention that employees have the right to have a support person present in a termination discussion.

The annual report also shows a 62% rise in dispute notifications, with a particularly large jump in applications for protected ballots by unions, which rose from 328 to 981.

While there is clearly a number of reasons for this increase – including the broader scope of the Fair Work Act and a year-on-year rise in the number of agreements coming due – Vitale argues the bald statistics suggest an increase in workplace tensions.

“Good old-fashioned dispute notifications dealing with a range of things appear to be coming back into vogue,” he says.

“The reality is that under the Labor government, Fair Work Australia has been giving a substantially increased role compared to under WorkChoices. As a consequence, SMEs are going to be dealing with Fair Work much more.”