Unfair dismissal laws unfair to small business says Ombudsman

- August 7, 2019 2 MIN READ

Australian Small Business and Family Enterprise Ombusdman, Kate Carnell, has suggested Fair Work’s existing unfair dismissal laws are unfair to small business owners. The Ombudsman has called for sweeping reforms including a new small business division within the Fair Work Commission to allow for fairer conditions to both employees and employers.

In Canberra to announce the release of a review of the Small Business Dismissal Code, Carnell said the existing laws were “not working”, were “ambiguous” and “open to interpretation”.

Carnell said the ambiguity of the existing code meant too many small businesses were being  pulled into court arbitration which was costing them time and money.

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

The Ombudsman suggested a new small business division within Fair Work would improve the process so that dealing with an employee accusation of unfair dismissal was less resource-intensive.

“The vast majority of small business operators are hard-working Australians with good intentions,” Carnell said. “The recommendations in this review aim to give small business operators clear guidelines to deliver certainty around complying with the code.

“Importantly – the recommended amendments and checklists are designed to guide a small business employer through a fair dismissal process, not to make the dismissal process easier.”

Carnell said research by the Fair Work Commission showed small businesses were often reluctant to dismiss staff.

“We know that small businesses do not make the decision to end a worker’s employment lightly. Research by the Fair Work Commission found one of the key challenges for small business operators was attracting and retaining good staff and that good employees were highly valued.

“That’s why it’s critical for the code to drive fairness, and set out clear expectations for small business employers.

“We want the Code to work, so that small businesses are doing the right thing and there’s less need to engage lawyers,” Carnell said.

The review contains recommendations in the following areas:     

Amendments to ensure the code meets its intended functions and objectives and provides certainty on what is required of small business employers to ensure a dismissal is fair.

Improving small business education and awareness in relation to the Code and checklists to help them meet their obligations.

Clarifying the unfair dismissal claims process for small business employers and employees.


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