There is a good argument that the Senate is being obstructionist by blocking the Government’s changes to unfair dismissal laws after they had been on the table over two elections. However, that does not mean that the Government’s proposals have any great merit.
The Government wants to exclude people employed by small businesses from access to federal unfair-dismissal laws. The proposal is bad in principle and practice. It offends the principle of equality before the law, creating two classes of employees with different rights, according to the size of their employer. If the unfair-dismissal provisions are job-destroying, expensive, cumbersome or otherwise bad, they should be scrapped or amended across the board.
This week two opposing views of the effect of the laws were put. Employer representatives say the number of claims is rising. The Council of Small Business Organisations says, “”If we can’t fire we don’t hire.” Australia Business says the latest NSW figures rose from 3337 in 2000 to 4137 in 2001, but these were in the NSW state jurisdiction and federal claims were also rising.
This shows that even if the Government were successful, many dismissed employees would just head for the state jurisdiction, so small business would remain burdened. Or worse from the business perspective, they might be more inclined to enlist the support of unions which tend to “”demand” reinstatement, or else. Or it might drive employees to even more cumbersome and uncertain common-law actions.
Employers are also alarmed at the increasing number of lawyers representing dismissed employees and the number of cases coming after the elapse of a considerable amount of time.
The Opposition has cited figures showing that only 291 cases went all the way to arbitration in the past five years, of which only 132 were upheld. It seems that the burden of unfair dismissal has been exaggerated. It may be that the number of claims is not indicative of the burden of uncontested cases where people are paid, in the words of Employment Minister Tony Abbott, “”piss-off” money. Even so, the idea put about by Mr Abbott that the laws are costing 50,000 jobs does not add up. It is based upon surveys that suggest one in 20 small business might be encouraged to employ an extra person if the laws were not there. There are a million small businesses – one in 20 makes 50,000. It is good rhetoric but poor economics. Employment decisions are based on costs. Given 3000 or so cases filed (and that includes cases from big business) at a cost estimated at the highest of $36,500, it is only $150 a business – much less given that not all cases cost the maximum. A saving of $150 is not enough to employ someone.
The Government is allowing ideology to blinker reality.
Job security and fairness in the workplace are important. Employees should be able to have redress against capricious and unreasonable dismissal.
To the extent that unfair dismissal is a burden, it can be eased by streamlining processes – particularly video, phone and written submissions to help employers avoid having to leave their businesses to attend hearings, helping educate small businesses about fairness processes, imposing stricter time limits on applications, making the low success rate of dismissed employees more widely known and more importantly, helping small-business employers with hiring and personnel-management systems so that job-seekers are matched more appropriately to jobs in the first place and new employees have a better knowledge of what is expected of them and the consequences of not meeting those expectations.