Labor will bring back unfair dismissal… PM firm on WorkChoices… Red Rooster buyout… New penalties for brokers… Optus 3G to expand… more…

Labor will bring back unfair dismissal

Labor at last has declared its unfair dismissal plans – and they are sure to concern many employers.

Basically unfair dismissal is back. If a company has under 15 employees, then the employees with one year service can claim unfair dismissal. If there are over 15 employees, then employees with six months service can claim unfair dismissal.

Labor will also introduce a new process for unfair dismissal claims, creating an umpire who can make decisions about whether the dismissal is unfair. There will be a seven day limit for making a claim and no lawyers allowed.

Labor will also develop a Fair Dismissal Code to help employers work out what is a fair dismissal. If they comply with the code, then it is a fair dismissal and the employee looses any claim.

Industrial relations couldn’t get any hotter as an election issue. Yesterday Prime Minister John Howard ruled out any watering down of WorkChoices law before the election.

What’s your view on unfair dimissal? Join our debate at Feedback by emailing

Amanda Gome

SME confidence booms

SMEs are bursting with confidence for the June quarter of 2007, new NAB Business Confidence Index data shows.

Although businesses across all sectors report increased confidence for the months ahead, the 700 SMEs surveyed were significantly more confident than the big end of town.

NAB’s head of Australian Economics, Jeff Oughton, says SMEs in the residential construction, property services and financial services sectors reported the highest confidence. “Despite the weakness in construction in Sydney you don’t see many builders looking for work. We’ve seen real estate agents get a bit more buoyant and in financial services there are a lot of brokers that are pretty happy,” he says.

SMEs with annual sales turnover of $2–3 million are the most confident, followed by SMEs with annual sales of $5–10 million and then $3–5 million, but all are more confident than larger businesses.

Across the economy as a whole, businesses continue to report difficult attracting staff, causing wages to lift 0.9%, up from 0.75% in the previous quarter.

Business conditions, trading and profits all remained steady in the March quarter, while costs grew 0.6% in March, down from the 0.8% growth reported in previous quarters.

– Mike Preston

Private equity snaps up another franchise

Fried chicken chain Red Rooster is the latest franchise chain to attract private equity money.

Private equity firm Quadrant has done a $180 million leveraged management buyout of the Australian Fast Foods, which has 450 company-owned and franchised Red Rooster and Chicken Treat stores. Co-founder Nick Tanna has exited. But co-owner Frank Romano remains with a 15% stake, and 10% will be held by other company executives.

The $180 million – $110 in debt and $70 million equity – will be invested in expanding the store network in NSW and Victoria. Romano told the Australian Financial Review he is considering trialing a café concept in Victoria and will be investing in catering for the trend toward healthier fast food.

The deal follows the sale of a majority stake in Eagle Boys Pizza by Tom Potter to Queensland-based NBC Capital for an undisclosed sum, last month.

– Jacqui Walker

Tougher penalties hit stockbrokers

The Australian Securities Exchange is planning tougher penalties on stockbroking groups and investment banks found guilty of professional misconduct. The maximum fine could be raised from $250,000 to $2 million. The chief supervision officer, Eric Mayne, told the Australian Financial Review that the move was needed to bring the penalty regime into line with other overseas stock exchanges that have no caps on fines.

– Amanda Gome 

Key search words to cost more

Small businesses who are clever with search engine marketing are currently enjoying being able to buy key words for low prices. And fortunately for them, many marketers and advertisers yet to catch up with search marketing, which has been described as direct mail on steroids.

But for how much longer? The Audit Bureau of Verification Services reports there an 81.4% growth in search and directories in 2006 to be worth almost $400 million.

The market for key words is global and prices for key words are expected to increase as the popularity of search engine marketing grows. See our story in Growth Resources on choosing key words.

– Amanda Gome

Optus to expand 3G network

Optus will expand its 3G network to cover 96% of Australia’s population, up from its current 56%, The Australian reports today.

The project, expected to cost several hundred million dollars, will be awarded by competitive tender. Nokia and Chinese communications network company Huawei are reported to be likely bidders for the work.

Optus is yet to release details of the technology to be used in the rollout.

– Mike Preston

Economy roundup

The S&P/ASX 200 is up 0.4% to 6129.8 at 11.30am, with stocks including Westfield and the banks performing strongly off the bank of positive data from the US overnight.

As well as helping Australian stocks, a bigger than expected 0.7% March increase for retail sales in the US and Citicorp $US5 billion first quarter profit announcement also boosted sentiment in the US, pushing the Dow Jones Industrial Average up 108 points to 12,720 overnight.

The Australian dollar is down slightly from the highs of recent days, down to US83.18¢ at 11.35 am.

Important US economic data including the consumer price index, housing starts and industrial production figures will set the tone for tomorrow’s trading after they are released tonight.

– Mike Preston


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