Small firms remain “shackled” by unfair dismissal laws: VECCI

Small businesses remain “shackled” by unfair dismissal laws, according to a major employer group, following yesterday’s release of a review into the Fair Work industrial relations system.

According to Mark Stone, chief executive of the Victorian Employers’ Chamber of Commerce and Industry, the recommendations of the review do not go far enough.

“VECCI is disappointed that submissions it made to the review panel… have not been fully embraced by the panel or indeed, embraced at all,” Stone says.

“In fact, some of the recommendations the panel has made will have the effect of introducing further complexity, more procedural requirements, more red tape [and] more third-party interference into the employer-employee relationship by unions and the regulators.”

Peter Strong, executive director of the Council of Small Business of Australia, has also expressed his disappointment over the review, labeling it as “useless”.

“We might as well have not written a submission. It was a waste of time,” Strong told The Australian Financial Review.

Stone made special mention of the unfair dismissal laws.

“Small business will remain shackled by unfair dismissal laws that force them to pay ‘go away’ money to resolve unmeritorious claims,” he says.

In the review, it is stated that several employer submissions raised the issue of ‘go away’ money, contending that the Fair Work Act has “led to an increase in the incidence of employers paying compensation to settle unmeritorious claims”.

“They argued that this is often a more economical option than contesting the claim to finality,” the review said.

“There was no statistical analysis to support the contention, and it is difficult to see how one could be compiled.”

The review also recommends the size of companies to which unfair dismissal applies remains the same.

Under the Fair Work Act, workers at companies with fewer than 15 employees cannot make unfair dismissal claims in their first year.

The recommendation is a blow for business groups, which have tried unsuccessfully to raise the time limit and alter the cut-off point for employees.

However, the review also recommends the time limit for lodging unfair dismissal applications be extended to 21 says.

Hall & Wilcox legal expert Karl Rozenbergs told SmartCompany the time limit for lodging a general protections claim relating to a termination of employment is now set at 21 days, as opposed to more than 40.

“So they’re taking a little bit away, but they’re also recommending less time for that,” he said.

The review also recommends that Fair Work can cancel an application in certain circumstances – including when an applicant fails to attend a proceeding, or where they fail to comply with directions or orders relating to the application.