WorkChoices - Significant Changes - Changing Dismissal Protection Laws For Most Employees

Changing Dismissal Protection Laws For Most Employees

Work Choices contains provisions relating to both unfair dismissal and unlawful termination, which are separate matters. The Australian Industrial Relations Commission (AIRC) retains some of its role in hearing unfair dismissal and unlawful termination cases, but increased the emphasis on mediation and conciliation. It also reduced the timeframe within which employees are able to lodge such claims; claims must be lodged within 21 days from the date of termination. Employees can apply for an extension of this timeframe, but a review of published decision shows that extensions are infrequently granted. Fees apply for applications, currently $55.70.

Both unfair dismissal and unlawful termination claims go through an initial hearing and compulsory conciliation conference at the AIRC. Only when the conciliation has been unsuccessful and a conciliation certificate issued can the claim proceed to the next step. For unfair dismissal claims, the claim proceeds to arbitration by the AIRC, where a Member of the Commission may issue a binding decision. For unlawful termination claims, the claim proceeds to a court with appropriate jurisdiction such as the Federal Court or the Industrial Division of the Federal Magistrates Court.

Prior to Work Choices, unfair dismissal protections existed in Awards or through state industrial relation commissions. The changes to dismissal laws as part of Work Choices reduced the protections of previous unfair dismissal laws, which were introduced at a Federal level by the Labour Government of Paul Keating in 1993. The arguments for these changes relate to creating jobs by removing the burden on business of dismissing unsuitable employees. Arguments against the changes include the lack of job security for employees.

Work Choices introduced several restrictions on who is able to lodge an unfair dismissal claim with the AIRC. Unfair dismissal is defined by the Workplace Relations Act 1996 (the Act) as dismissal which is "harsh, unjust or unreasonable." Employees must work for a business that has more than 100 employees, and have served a qualifying period of 6 months. Other reasons that will exclude an employee from taking unfair dismissal action include where an employee is employed on a seasonal basis or on a contract of employment for a specified period or task, employed on a probationary period that is reasonable and determined in advance, a short-term casual employee, a trainee engaged for a specific period, or an employee not employed under an Award or workplace agreement and earning more than $101,300 per year (see Section 638 of the Act for a full list of exclusions).

Significantly, the Act also excludes employees who were dismissed for "genuine operational reasons or reasons including genuine operational reasons". "Genuine operational reasons" are defined in the Act as "reasons of an economic, technological, structural or similar nature.” Interpretation of this clause by the AIRC has created precedent for a broad application of this section of the Act. In Carter v Village Cinemas, the Full Bench of the AIRC decided upon appeal that an operational reason must only be a reason for dismissal, not the sole or dominant reason for dismissal. In another significant decision, Andrew Cruickshank v Priceline Pty Ltd, Mr Cruickshank was employed at Priceline on a package of $101,150. He was terminated and Priceline subsequently hired a new employee in the same position on a package of $65,000–$75,000. Priceline claimed, successfully, that they had not breached the unfair dismissal provisions of the Act, as the dismissal saved the business money, therefore was for a reason including a genuine operational reason.

Unlawful termination encompasses several parts; notice of termination, Centrelink notification, and prohibited reasons. Under Section 661 of the Act, employees, other than excluded employees (including casual employees with less than 12 months regular ongoing service, apprentices) are required to be given a specified period of notice of termination or payment in lieu of this notice. Where this is not provided to an employee, an unlawful termination application may be lodged. In certain circumstances where a business terminates 15 or more employees, the business must give written notice to a body prescribed by the Workplace Relations Regulations 2006, currently Centrelink.

Prohibited reasons for termination include discriminatory reasons such as age, race, national extraction, political opinion, sex, sexual preference, religion, marital status, disability, pregnancy and family responsibilities; refusal to sign an Australian Workplace Agreement (AWA)(however it is not prohibited to deny employment to a new employee who refuses to sign an AWA); being involved in proceedings against an employer for alleged breach of the law; membership or non-membership of a union or participation in union activities; and absence from work due to illness or injury, parental leave or emergency management activities." Unlike unfair dismissal provisions, there are no restrictions on employees who can lodge unlawful termination claims for prohibited reasons.