Nicholas Way

SmartCompany /

There’s no need to fear a return to an onerous unfair dismissal system. Labor, and small business, knows what is at stake.

Unfair dismissal: The reality

Small businesses shouldn’t fear a Rudd Labor government imposing a tough unfair dismissal regime on their enterprises. It’s not the rhetoric they will hear from their employer bodies — or Coalition politicians — but it is the reality.

No doubt any industrial relations regime Labor ushers in will be a step back from the Coalition’s decision to exempt businesses of up to 100 employees from unfair dismissal legislation. But to equate that with the re-introduction of the unfair dismissal regime that existed before the WorkChoices legislation would be nonsensical.

To begin with, the unions know this election is their last throw of the dice. If Labor loses, WorkChoices remains on the statute books for three more years, making it that much harder for unions to survive — let alone grow.

It means the union movement will give Labor a lot of room to move politically; public slanging matches with Labor are the last thing the unions want in the run-up to a poll later this year. They have too much riding on the outcome.

Also ask yourself how many employees in small businesses belong to unions; you could count them on one hand. Now the unions will say publicly that this is a matter of principle, that every employee has the right to have access to unfair dismissal legislation, but they won’t die in the ditch fighting for it. Large employers are their bread and butter.

ACTU secretary Greg Combet has acknowledged that any unfair dismissal law shouldn’t be too onerous for small business; it’s an implicit acknowledgement that, in the past, small businesses often got embroiled in lengthy — and costly — unfair dismissal cases where there was little merit. For these employers, it was just easier to pay up.

The simple fact is most small employers do the right thing by their employees; in a tight labor market they don’t have much choice.

But all employees have the right to be spared the indignity of being unfairly dismissed. No one has ever been able to explain why an employee working for a company with 99 workers shouldn’t have access to unfair dismissal legislation and an employee in a workforce of 100 should have access.

It shouldn’t be too intellectually rigorous to devise a system that ensures employees’ rights while safeguarding small business from the claims of vexatious workers.


Ken Wood writes: That’s as may be, but why risk it? I’m not ready to trust the Labor party on industrial relations just yet. Perhaps in another three years when deregulation is more “bedded in”, as you describe above.

There has been no evidence of misuse of WorkChoices in the past year; all the economic indicators seem to at least partly support its claimed benefits and anecdotally the feedback I’m hearing from fellow entrepreneurs is all good. Labor’s promise to “rip it up” guarantees they won’t get my vote, but then I was never in the target demographic in the first place …


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