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It could get more expensive for you to lodge an unfair dismissal claim

Fired unfairly? Two small business groups want to make it more expensive to lodge an unfair dismissal claim. (Source: Getty)
Fired unfairly? Two small business groups want to make it more expensive to lodge an unfair dismissal claim. (Source: Getty)

What do you do when your boss wrongfully fires you? You lodge an unfair dismissal claim to the Fair Work Commission.

But two small business groups have banded together to lobby politicians to make it more difficult for these claims to be heard and to raise the price of lodging such claims.

It is currently too easy and cheap for employees to file an unfair dismissal claim against employers, Employsure and the Small Business Association of Australia (SBAA) are claiming in a joint letter to government ministers.


Currently, employees who file an unfair dismissal claim to the Fair Work Commission are required to pay $73.20, a fee that is waived in instances of financial hardship.

But Employsure managing director Ed Mallett argued that the current workplace system is “imbalanced” and “unfair” to small- and medium-sized businesses.

“In a no costs jurisdiction, this means an employee can bring a claim that is without prospects of success and is unlikely to suffer the consequences of having to pay the other party’s legal costs,” Mallett said.

As a result, Mallett argued the small business is likely to settle, as it is a cheaper option than proceeding to arbitration or a hearing.

Describing this practice as “unfair”, he said it had created a “cottage industry” of no-win, no-fee lawyers that “prey” on recently dismissed workers “at the expense of business owners”.

Fair Work Commission should do more heavy lifting: Employsure, SBAA

Employsure and SBAA are calling for an amendment where the Fair Work Commission (FWC) would flag weaknesses in an applicant’s case that might discourage the applicant to pursue their claim.

“Further, the cost of bringing a claim could be increased in an effort to deter unmeritorious claims,” Mallett said.

The two small business associations would also like to see the FWC take a more active role by reviewing and dismissing cases by “ineligible applicants”.

According to the current process, each unfair dismissal claim is listed for conciliation, which requires a small business owner to attend and respond.

But Mallet said, in most cases, businesses would offer a sum just to settle the case.

“It is our experience that this offer of a monetary settlement is actively promoted at the conciliation to make the matter ‘go away’,” Mallett argued.

But an amendment where the FWC would review and dismiss claims would save business owners “time and unnecessary expense”.

Government must ‘immediately rule it out’: ACTU

Speaking to Yahoo Finance, the Australian Council of Trade Unions secretary Sally McManus said the proposed changes would “take away justice from people who have been unfairly sacked and give the green light to bad employers to sack more people unfairly”.

Calling for the Coalition to rule the proposal out, she added: “This threatens the job security of all workers.

“If it is easier to just sack workers for no good reason, more people will lose their jobs for no good reason.

“The Morrison Government must immediately rule it out.”

‘Small Business Fair Dismissal Code does not work’

Earlier this week, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell handed down a report recommending several recommendations to overhaul the current unfair dismissal code.

Too many small businesses were “being pulled into unfair dismissal hearings” that were “costly and impact[ed] productivity,” she said.

“The vast majority of small business operators are hard-working Australians with good intention.

“We know that small businesses do not make the decision to end a worker’s employment lightly,” Carnell said.

“Small businesses can’t afford to engage in costly and stressful legal action. They don’t have the support of a HR department when faced with the difficult decision to end a staff member’s employment.”

Fair Work Commission figures show that 3,583 unfair dismissal applications were lodged within the first three months of this year.

While most were settled, 65 per cent of the cases presented to the Commission ended up being dismissed for being without merit or invalid

“They should not have gone to the Commission in the first place,” she said.

The ABSFEO’s report makes 15 recommendations to overhaul the Small Business Fair Dismissal Code.

Yahoo Finance has contacted SBAA, the Australian Council of Trade Unions, United Voice, and the FWC for comment.

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