Push to exempt small firms from unfair dismissal laws

The Federal Coalition should campaign to exempt small businesses from unfair dismissal laws, according to a Liberal Senator.



WA Liberal Senator Christopher Back, who is conducting a policy review for the party, says the Coalition should address concerns raised by small businesses about workplace relations, indicating that his review will support exemptions from unfair dismissal laws for small firms.


“The emotional cost in a small business of having to let someone go, as well as the financial cost, can be a deterrent to putting someone on,” he says.


Under Fair Work Australia rules, an employee has been unfairly dismissed if:


  • they were dismissed, and
  • the dismissal was harsh, unjust or unreasonable, and
  • the dismissal was not a case of genuine redundancy.


It’s not considered unfair dismissal if the employer is a small business employer and they follow the Small Business Fair Dismissal Code

when dismissing an employee.


A small business employer is defined as someone who has fewer than 15 employees.


However, Back says the Coalition should consider calling for a broader definition of small businesses that receive special treatment under unfair dismissal laws.


Opposition leader Tony Abbott hasn’t confirmed whether he will change the workplace relations policy from his pre-election position of not advocating any change to Labor’s laws.


Abbott told the ABC the onus is on businesses to raise any concerns, but they haven’t done so yet.


“It’s now up to business and others to come to us if they think there are problems with the operation and implementation of Labor’s laws… If people think there is a case for change, they need to make that case for change,” Abbott said.


Workplace Relations Minister Chris Evans says Abbott’s comments show the Liberal Party wants to return to its Work Choices policies.


But the Australian Retailers Association says both parties need to enter into open debate about industrial relations legislation without “the lazy rhetoric of change simply being a return to Work Choices.”


ARA executive director Russell Zimmerman says employers and unions will always support changes to industrial relations law because “no system is perfect”.


“If there is a call for change, to simply imply it is a return to the past is nonsense,” Zimmerman says.


“Employers can see that the laws are fair for employees but it is equally important to place emphasis upon productivity, growth and business sustainability.”


David Gregory, director of workplace policy at the Australian Chamber of Commerce and Industry, agrees there needs to be ongoing debate about the future of Australia’s workplace relations system.


Peter Strong, executive director of the Council of Small Business of Australia, supports Back’s call for small businesses to be exempt from unfair-dismissal laws, and wants a review of the industrial relations system.


“The sooner we treat small businesses as individuals, the sooner we solve the problem of workplace relations [law] as it applies to small business,” Strong says.


“We’d like to see a workplace relations system that reflects the humanity of everyone involved at the small business level.”


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