The Federal Government got into a constitutional hole with its unfair dismissal legislation and the result has been costly for employers. The Australian Chamber of Commerce published a survey last week showing that employers were s concerned about the costs of the legislation that they were reluctant to hire full-time employees, preferring to hire part-timers and casuals.
In earlier times, a worker’s remedy for unfair dismissal largely depended on whether he or she was in a union. If so, industrial muscle could be used to get a reinstatement. If not, the worker was largely at the boss’s mercy. Thoughts by various state governments to apply a uniform law irrespective of union membership, until recently, fell on barren ground because it was thought such laws would play into the hands of already-too-strong unions. Several states have some unfair-dismissal provisions. Others do not.
The Federal Government thought it should fill the gap. Unfortunately, the Constitution would not let it pass an ideal law, even if it wanted to. It had to hang the law on the foreign affairs power because it has no power over employment contracts outside the industrial relations field. It therefore had to follow international treaty provisions which were perhaps unduly favourable to employees. Further, the Constitution requires a court to decide matters of damages in civil actions, so it could not give unfair-dismissal cases to an informal administrative tribunal as in the states.
The upshot has been a costly system too favourable to employees. It has resulted in dismissed employees filing cases almost as ritual, according to the chamber. Employers find it cheaper to settle the cases, however, undeserving many might be.
There is a clear need for unfair-dismissal legislation. The common-law is woefully inadequate and unfair to employees. It treats them like fodder _ expendable on two weeks’ pay. Further, without legislation, employees will seek their remedy through the union and industrial action. This is likely to give redress on whether the employee is a popular mate rather than the merits of the case.
However, if the legislation is too generous to employees or so costly to run cases that the costs can be used as blackmail, it will have the effect of discouraging employers from taking on people full-time, preferring casuals. Thus the federal law is reducing security in employment _ exactly the opposite effect as intended. The law should be revisited.