by David Bates

I remember very well the reassuring words the former federal government gave to employers when the Fair Work laws were ushered in back in 2009. They said no employer should be unduly concerned about the new unfair dismissal laws because they contain a number of protections for employers, such as:

  • Employees needing to complete a ‘minimum employment period’ (of either 6 or 12 months) before being protected from unfair dismissal
  • High income employees having no protection unless their position is also covered by an Award
  • Applications needing to be lodged within strict timeframes, and
  • Employees needing to have been actually ‘dismissed’, as opposed to having resigned.

Unfortunately, while all those limitations and restrictions do sound reassuring, the bad news for employers is that they really mean very little in practice.

Let’s take ‘Bob’ as an example. Bob is an investment banker being paid $250,000 per year and he’s worked for you for one day. Bob decides he doesn’t like your business very much so he resigns on his way out and wishes you luck with your business. So far so good. Three months then passes by and, out of the blue, a letter arrives from the Fair Work Commission advising that Bob has lodged an unfair dismissal claim against you. The letter also contains a ‘Notice of Listing’ requesting that you take part in a ‘conciliation conference’ as a first step prior to full-blown arbitration in the Commission.

You then think through what happened with Bob and realise there’s no way this guy can bring a claim against you. He earned too much, resigned after just one day, and lodged his application way too late.  But, and here’s the really bad news, none of that matters to the Commission at this stage. You see, there’s no-one responsible for checking that applicants are, in fact, eligible to lodge their claim. Instead, the Commission just goes ahead and automatically lists the matter for conciliation.

Now keep in mind that around 80 per cent of unfair dismissal claims are settled at the conciliation stage because the employer agrees to make a payment of ‘go-away’ money to the aggrieved ex-employee.

You may now have already guessed the awful truth: many employers end up making settlement payments to employees who were never even entitled to lodge their unfair dismissal claim in the first place. If they don’t, they end up having to ask a Commissioner to throw out the application when they finally have their day at the tribunal.

Feeling angry about those false reassurances now? You should be.