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Exemption plea likely to be dismissed

SMALL business’ hopes of gaining exemption from unfair dismissal laws in either the state or federal jurisdiction seem remote.

WA’s unfair dismissal laws are under review as part of the Government’s rewrite of its industrial laws.

The majority of WA small businesses fall under the WA’s unfair dismissal law regime because they operate under either workplace agreements or WA Awards.

Even WA employees working under Federal Awards can opt to have their case heard in the State system unless their award specifically prohibits it.

Consumer and Employment Protection Minister John Kobelke said he was against small businesses being granted any unfair dismissal exemption.

Mr Kobelke told a recent business luncheon that he wanted WA businesses to be best practice in every area, and exempting small business from unfair dismissal laws would not achieve that.

Workplace relations law experts do not expect WA’s unfair dismissal laws to change much.

Deacons senior associate Alistair Salmon said WA’s unfair dismissal laws were more favourable to employees than those in the federal system.

“From the Labor Government’s point of view there is not a lot to change,” Mr Salmon said.

Industrial relations advocate and Combined Small Businesses of WA president Oliver Moon said most of the unfair dismissal claims going to the WA Industrial Relations Commission were frivolous but still proved costly to small business owners.

“The law allows an employee to pay $5 and lodge an unfair dismissal claim,” he said.

Mr Moon said 86 per cent of unfair dismissal cases were settled at conference. The usual settlement is around $2,000.

“For $5 an employee can go in and defend themselves and walk away with $2,000,” he said.

“Besides the costs of defending unfair dismissal actions, small business owners also face the time costs of being away from the business.”

In the federal arena, Workplace Relations Minister Tony Abbott is having a second go at getting small businesses exempted from unfair dismissal laws.

A hostile Senate watered down his first attempt last month. Legal experts believe the amendments to the resulting Workplace Relations (Termination of Employment) Act made the process of dismissing an employee more confusing.

Under the Act, which came into effect last month, the Australian Industrial Relations Commission must assess how the business’ size affected the termination procedure.

Jackson McDonald partner Maria Saraceni said the Act only allowed small businesses to use their size as a defence against unfair dismissal claims.

“But if they are a member of a business organisation, such as the Chamber of Commerce and Industry, that defence becomes harder,” she said.

“The fact small business is not defined in the legislation does not help either.”

Mr Salmon said the Act could make things harder for small businesses.

“There could be a lot of litigation initially to set up precedents. We need to have guidelines on this developed by the full bench of the Commission,” he said.

The Act also made probationary periods mandatory. Probationary employees are exempted from unfair dismissal laws.

It also allows demoted employees to make a claim for unfair dismissal if they have suffered a significant loss of pay or status.

The Act also introduced measures to limit frivolous claims in the Australian Industrial Relations Commission. Legal practitioners can be fined up to $10,000 for encouraging fanciful claims.

The Government’s second attempt at exempting small business from unfair dismissal laws – the Workplace Relations (Small Business) Bill – is before Parliament.

The Bill defines small businesses as those with fewer than 20 employees.

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