Termination of Employment Convention, 1982 (No. 158) - Australia (RATIFICATION: 1993)

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Article 4 of the Convention. Valid reasons for dismissal. In its observations, the Australian Confederation of Trade Unions (ACTU) once again expresses its concern that the Fair Work Act (FWA) does not require the Fair Work Commission (FWC) to be satisfied that individuals selected for redundancy were fairly chosen. The Government indicates in its report that the requirements for determining whether a redundancy is genuine remain unchanged. The Committee notes the information provided by the Government concerning judicial decisions that illustrate the manner in which the FWC takes into account the requirements for genuine redundancy in the Commonwealth. The Committee requests the Government to continue providing information concerning application of this Article of the Convention in all states and territories and for all categories of workers, including examples of court rulings taking into account the requirements for genuine redundancy.

Article 7. Procedure prior to or at the time of termination. The Government indicates that in the case of dismissals, other than cases of summary dismissal, the Small Business Fair Dismissal Code requires an employer to provide the employee with a warning that his or her conduct or capacity to perform the job is such that the employee risks being dismissed. Furthermore, an employee must be provided with the opportunity to respond to the warning and rectify the problem. The Government indicates that there has been no change to the Code or its application, noting that, in the Commonwealth, the FWC customarily finds that the failure to provide an employee with sufficient warning of dismissal constitutes a failure to comply with the Code on the part of the employer. The Committee notes the judicial decisions referenced by the Government exemplifying this rule. The Committee requests the Government to continue providing information on the application of the Small Business Fair Dismissal Code and other legislation applicable in all states and territories and to all categories of workers, concerning workers’ opportunity to defend themselves against the allegations made prior to termination.

Articles 8 and 9. Appeals procedure. In its observations, the ACTU notes the amendments to the FWA, which align the time limits for lodging unfair dismissal and unlawful termination claims at 21 days. The ACTU welcomes the increase in the time limits for lodging unfair dismissal applications from 14 to 21 days; however, it still considers that 21 days is too short. While the ACTU acknowledges that the FWC may grant employees an extension of the time limit, it considers that such extensions are available only for exceptional circumstances and are often denied. The Government indicates that extensions are available in extenuating circumstances, such as where an employee has experienced serious health problems, or where the employee only became aware of the dismissal after the termination had taken place. The ACTU once again expresses its concern that there are different rules applicable to small business employees. In addition, the ACTU considers that workers do not enjoy adequate protection in case of genuine redundancy and once again expresses its view that the FWA contains insufficient redundancy safeguards against precarious forms of employment aimed at avoiding the protection resulting from the Convention. The Committee notes the Government’s reference to the jurisprudence of the FWC in reply to the ACTU’s previous and current observations. The Government provides examples of decisions in which the FWC found that there were extenuating circumstances justifying extensions of time, such as where the employee had experienced significant health problems, as well as situations where the employee became aware of the dismissal only after the termination had taken place. The Committee requests the Government to continue to provide examples of FWC decisions involving requests for extensions of time in the context of unfair dismissal and unlawful termination claims.

Article 11. Serious misconduct. The Committee notes the ACTU’s continued concern that the Small Business Fair Dismissal Code does not guarantee fair treatment for employees of small businesses, making it possible to dismiss such employees without notice or warning if the employer holds a reasonable belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. The Government refers to several FWC decisions clarifying what may constitute reasonable grounds for summary dismissal and expresses the view that summary dismissal will generally be deemed to be in accordance with the Small Business Fair Dismissal Code where the employer had a reasonable belief that there were appropriate grounds for dismissing the employee. The ACTU considers that the standard of proof to be exercised by the FWC under the Small Business Fair Dismissal Code is too broad, as the FWC is not required to base its decision on evidence showing that the employee’s misconduct occurred, nor is it required to satisfy itself that the employer had a reasonable belief that the conduct of the employee was serious enough to warrant immediate dismissal. Employees of small business are thus deprived of an effective remedy as evidenced in Harley v. Rosecrest Asset Pty Ltd T/A Can Do International [2011] FWC 3922, where an employer had erroneously accused the employee of theft. However, as the employee did not dispute the employer’s belief when confronted, the FWC held that the employer had reasonable grounds for holding that belief and found the employee’s dismissal to be consistent with the Small Business Fair Dismissal Code. The appellate court reached similar conclusions in Pinawin v. Domingo [2012] 219 IR 128 and Steri-Flow Filtration (Aust) Pty Ltd v. Erskine [2013] FWCFB 1943. The ACTU is of the view that the Small Business Fair Dismissal Code should be abolished and that all employees, regardless of the size of business in which they work, should be entitled to protection against unfair dismissal. The Committee requests the Government to continue providing information, including examples of FWC decisions, on the manner in which the Small Business Fair Dismissal Code ensures fair treatment of employees in the event of dismissals based on alleged misconduct.

Application of the Convention in practice. The Committee notes with interest the detailed information provided, including statistics and examples of decisions issued by courts and tribunals in all parts of the country concerning questions of principle relating to the application of the Convention. The Committee requests the Government to continue providing updated information on the application of the Convention in practice, including examples of court rulings concerning questions of principle relating to the application of the Convention and available statistics on the activities of the bodies of appeal (such as the number of appeals against unjustified termination, the outcome of such appeals, the nature of the remedy awarded and the average time taken for an appeal to be decided) and on the number of terminations for economic or similar reasons.

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The Committee notes the observations of the Australian Council of Trade Unions (ACTU) received on 31 August 2016.

Article 2(2)(b) of the Convention. Exclusion of workers serving a qualifying period of employment. The ACTU continues to express concerns regarding the time limits for lodging claims for unfair dismissal and unlawful termination. It also considers that the Small Business Fair Dismissal Code provides less protection from unfair dismissal for small business employees – those employed in businesses employing less than 15 workers – from unfair dismissal in comparison with the Fair Work Act, 2009 (FWA), as small business employees are required to complete a 12-month qualifying period of employment while other employees are subject only to a six-month qualifying period before becoming eligible for protection against unfair dismissal. The ACTU also reiterates its view that the FWA provides insufficient safeguards against redundancy and precarious forms of employment. In reply to the Committee’s previous request and the ACTU’s observations concerning the continuing existence of different rules for small business employees, the Government indicates that the Fair Work Commission (FWC) has continued to apply the FWA to extend protection against unfair dismissal to temporary, probationary and casual employees in a number of cases alleging unfair dismissal. The Committee notes the FWC rulings provided by the Government, in which casual employees employed on a regular and systematic basis were deemed to have satisfied the minimum period of employment and were recognized as protected persons within the meaning of the FWA. Responding to the ACTU’s observations regarding the 12-month qualifying period for small business employees, the Government indicates that the Productivity Commission’s report of the public inquiry undertaken in 2014 was released in 2015. The report evaluated the performance of the workplace relations framework – including the FWA – and made recommendations for improvement. The Government indicates that retaining the requirement of a 12-month qualifying period before small business employees may be protected under the unfair dismissal laws is necessary to balance the needs of small business employees for protection from unfair dismissal against the resourcing difficulties faced by small businesses, which require them to screen and verify the performance of new employees over a longer period of time. It adds that, as small enterprises frequently employ workers at the margins of the labour market – who may be particularly vulnerable to stricter employment protection – the extension of the probationary period for such businesses constitutes a “regulatory tiering” through which compliance burdens may be reduced without substantively reducing compliance. In contrast, the ACTU considers that this lengthier qualifying period has the effect of excluding a substantial number of employees from unfair dismissal protection. It points out that, of the 11.98 million employees employed by small businesses in May 2016, 2.3 million had been with their current employer for less than 12 months, of which a significant percentage were low-skilled laborers and persons from other vulnerable groups, such as young workers (aged 15–34). The Committee requests the Government to provide detailed information regarding the measures taken or envisaged to implement the recommendations of the Productivity Commission relevant to the application of the Convention. It also requests the Government to communicate data disaggregated by economic sector, on the number of small business employees dismissed after completing six and 12 months of employment, respectively, as well as the number of large business employees dismissed after completing six and 12 months of employment.

Article 2(3). Adequate safeguards against recourse to contracts of employment for a specified period of time. The Committee notes the Government’s reply to its previous request in which it addressed the ACTU’s concerns about recourse to precarious forms of employment as a means of avoiding the protection resulting from the Convention. The Government indicates where an employment contract is for a specified period of time, a specified task or for the duration of a specified season, and the employment has terminated at the end of the specific period, task or season, unfair dismissal protections do not apply. It adds that if the termination occurs before the end of the period, task or season specified, the employee may still access remedies against unfair dismissal, provided they have satisfied the relevant requirements, such as completing the minimum qualifying employment period (six months for employees of larger enterprises and 12 months for small businesses). The Government indicates that, moreover, section 123(2) of the FWA provides that exclusions will not be applied to employees who are ostensibly engaged on a fixed-term contract if a substantial reason for engaging them on such a contract or series of contracts is to avoid notice of termination and redundancy entitlements. In such circumstances, employees will be deemed to fall within the scope of the unfair dismissal legislation (citing Hope v Rail Corporation New South Wales [2014] FWC 42 (3 January 2014)). In addition, the Government indicates that the FWA provides safeguards against “sham contracting arrangements” (understood as the misrepresentation of a person in an employment relationship as an independent contractor), prohibiting an employer from dismissing or threatening to dismiss an employee in order to hire him or her as an independent contractor to perform the same or substantially the same work. The Committee requests the Government to indicate the measures taken or envisaged in all states and territories to ensure the provision of adequate safeguards against recourse to contracts of employment for a specified period of time in order to avoid the protections provided under the Convention. It further requests the Government to continue to provide examples of decisions issued by the FWC or other relevant bodies with regard to contracts of employment for a specified period of time.

The Committee is raising other matters in a request addressed directly to the Government.

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Article 4. Valid reasons for dismissal. In its previous comments, the Committee noted the concerns expressed by the Australian Council of Trade Unions (ACTU) over the fact that the Fair Work Act does not require Fair Work Australia (now renamed the Fair Work Commission), the tribunal for the determination of unfair dismissal claims under the Fair Work Act, to be satisfied that individuals selected for redundancy were fairly chosen. The Government provides in its report an example of a recent Fair Work Commission ruling taking into account the requirements for genuine redundancy, in which it was noted that it would constitute adverse action if a person was chosen for redundancy for an unlawful or discriminatory reason. The Committee invites the Government to continue to provide information concerning this provision of the Convention, including examples of court rulings taking into account the requirements for genuine redundancy.

Article 7. Procedure prior to or at the time of termination. The Government indicates that, in the case of dismissals, other than cases of summary dismissal, the Small Business Fair Dismissal Code specifies that the employee must be provided with a warning that his or her conduct or capacity to do the job is such that he or she risks being dismissed if there is no improvement. The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem. In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. The Committee notes in this regard information regarding a case in which a dismissal was found to be not compliant with the Small Business Fair Dismissal Code with respect to providing the employee with an opportunity to respond to the reasons for his dismissal relating to work performance (Mr Friend v. Bennett Carroll Holdings Pty Ltd T/A Bennett Carroll Solicitors [2014] FWC 1916). The Committee invites the Government to continue to provide information on the application of the Small Business Fair Dismissal Code with regard to workers’ opportunity to defend themselves against the allegations made prior to termination.

Application of the Convention in practice. The Committee invites the Government to continue providing updated information on the application of the Convention in practice, including examples of court rulings concerning questions of principle relating to the application of the Convention.

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Observations from the International Organisation of Employers (IOE). The Committee notes the communication of August 2014 whereby the International Organisation of Employers (IOE) included Australia in its observations concerning the application of the Convention.

Article 2(2)(b) of the Convention. Workers serving a qualifying period of employment. In its observations received in September 2014, the Australian Council of Trade Unions (ACTU) reiterates that it has serious concerns about the continuing existence of different rules for small business employees. For instance, the 12-month qualifying period for employees in businesses with less than 15 employees to make an unfair dismissal claim excludes a substantial number of employees from unfair dismissal protection. The Government indicates in its report that the unfair dismissal laws under the Fair Work Act, including the minimum qualifying period, are intended to balance the rights of employees to be protected from unfair dismissal with the need for employers, in particular small business, to fairly and efficiently manage their workforce. Moreover, the provisions in the Fair Work Act concerning the transfer of business provide protections for employees in the event of a transfer of business between two entities. Only in the circumstance where the two businesses are not associated entities, the Fair Work Act provides that the second business may elect not to recognise service with the previous employer for determining the qualifying period for unfair dismissal protections. For the purposes of the unfair dismissal qualifying period, the new employer must give notice in writing that previous service will not be recognized, prior to the employee starting work with the new employer. All employees retain access to the general protections provisions. The Committee invites the Government to provide updated information on the issue raised by the ACTU, including available data on the effect of the qualifying period on small businesses and their workers.

Article 2(3). Adequate safeguards. The ACTU indicates that it is gravely concerned about the use of precarious forms of employment in Australia as a means of avoiding the protection resulting from the Convention. While the Fair Work Act prohibits “sham contracting” (understood as the misrepresentation of a person in an employment relationship as an independent contractor), the absence of a clear legislative test for determining the existence of an employment relationship enables businesses to use independent contracting to mask genuine employment relationships. The ACTU adds that the absence of any general limitations on the circumstances in which short-term contracts are used in Australia enables employers to rely on a series of rolling contracts in lieu of permanent employment arrangements in order to minimise the operation of unfair dismissal laws. The Committee invites the Government to provide information on the safeguards against abusive recourse to contracts of employment for a specified period of time, the aim of which is to avoid the protection resulting from this Convention (see in this connection Paragraph 3 of the Termination of Employment Recommendation, 1982 (No. 166)).

Articles 8 and 9. Procedure of appeal against termination. The Committee previously noted the ACTU’s observations indicating that the usual limitation period for civil claims is six years. The ACTU believed that the 60-day limit under the Fair Work Act was too short, as many workers may not be aware of the motive for the dismissal until well after the event. The Committee notes that the Fair Work Amendment Act of 2012 increased the time period for lodgement of unfair dismissal claims from 14 days to 21 days and reduced the time period for lodgement of general protections claims from 60 days to 21 days. The Amendment Act of 2013 reduced the time period for lodgement of unlawful termination applications from 60 days to 21 days. These amendments align the time period for all applications relating to termination of employment. The Government indicates that extensions of time are available in extenuating circumstances, such as in situations in which employees are not aware of the motive for the dismissal until well after the event. In its observations received in September 2014, the ACTU welcomes the increase in the timeframe for lodging unfair dismissal applications from 14 to 21 days but maintains that 21 days is too short. The ACTU adds that extensions of time are only available in exceptional circumstances and the decision to grant an extension is a discretionary one. The ACTU observes that there have been a significant number of cases in which applicants that have failed to lodge an application in time for legitimate reasons (such as ill health or stress related to the dismissal) have been unable to obtain an extension. For these reasons the ACTU believes that the time limit should be abolished, or at least should run from the date on which the worker became aware that he/she might have a valid claim. The Committee invites the Government to provide its comments in this respect, including information on cases in which extensions of time have been requested and on their results.

Article 11. Serious misconduct. The Committee previously noted that the ACTU expressed concern that the Small Business Fair Dismissal Code does not guarantee that employees in small businesses are treated fairly. For example, the Code suggests that an employer may summarily dismiss an employee if he or she believes that the employee has engaged in a single act of theft, fraud or violence. The Government explains that the Fair Work Commission customarily finds that the absence of an investigation leads to a conclusion that a dismissal was not made on reasonable grounds. The ACTU indicates that the Fair Work Commission does not have to make a finding, on the evidence, whether the conduct occurred. Nor does the Commission need to be satisfied the employer had a reasonable belief that the conduct of the employee was serious enough to warrant summary dismissal. The ACTU believes that the Small Business Fair Dismissal Code should be abolished. It adds that all employees should be entitled to protection against unfair dismissal, regardless of the size of the business in which they work. Employees of small businesses ought not to have inferior rights to procedural and substantive fairness or access to a process to remedy such as unfairness, merely because they are employed in a small business. The Committee invites the Government to continue providing information on the issue raised by the ACTU, by including examples of Fair Work Commission rulings applying the Small Business Fair Dismissal Code in cases where summary dismissal was granted or not.

The Committee is raising other matters in a request addressed directly to the Government.

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The Committee notes the Government’s detailed report received in September 2011 which includes replies to the matters raised in the 2009 observation. The Committee also notes the comments received from the Australian Council of Trade Unions (ACTU). The Government indicates that from 1 January 2010, all States other than Western Australia referred their industrial relations powers to the Commonwealth, essentially creating a new national industrial relations system for the private sector (known as the “national system”). The number of applications by national system employees for remedy for unfair dismissal in 2009–10 was 11,116. At the end of first quarter of 2011, the number of applications for 2010–11 was 9,498. Information provided by Fair Work Australia indicates that there have been a total of 258 applications finalized at arbitration in the first nine months of 2010–11, of which a total of 20 orders were made for reinstatement. The Government indicates that it is not possible to make a direct comparison between the number of applications under the general protections and the previous legislation because the Fair Work Act general protections consolidated the freedom of association protections, unlawful termination and other miscellaneous protections that applied under the previous legislation. The conciliation settlement rate for 2009–10, which includes all termination matters, was 81 per cent. Under the former legislation, the conciliation settlement rate was 75 per cent in 2008–09. Telephone conciliation remains the predominant conciliation method (96 per cent of conciliations in the first quarter of 2011 and 97 per cent in the last quarter of 2010). The Government indicates that research conducted by TMS Social Research for Fair Work Australia and released in November 2010 shows that 88 per cent of employers reported that having the conciliation over the telephone was convenient and cost effective and 82 per cent of employers were satisfied or extremely satisfied with the cost effectiveness and efficiency of the conciliation process. The Committee invites the Government to continue providing updated information on the application of the Convention in practice and examples of court rulings concerning questions of principle relating to the Convention.

Article 2(2)(b) of the Convention. Workers serving a qualifying period of employment. The Government indicates that the Fair Work Act provides for a longer qualifying period of 12 months for employees in businesses with less than 15 employees to make an unfair dismissal claim. The Government supplied information indicating that, out of the 9,498 unfair dismissal applications made to Fair Work Australia in 2010–11, 1,876 related to small business employers. The ACTU welcomed the Fair Work Act’s restoration of unfair dismissal rights to most workers in the federal system. However, the ACTU has serious concerns about the continuing existence of different rules for small businesses. The ACTU notes that this 12-month qualifying period for workers in small businesses effectively excludes 22 per cent of small business employees from claiming unfair dismissal: 41 per cent of all hospitality sector workers and 64 per cent of young people between the ages of 20 and 24. Furthermore, in a transfer of business situation, the Fair Work Act allows a new employer to require a transferring employee to re-serve a qualifying period for accessing unfair dismissal remedies. Keeping in mind the concerns raised by the ACTU, the Committee invites the Government to continue providing information on this issue.

Article 4. Valid reasons for dismissal. The ACTU expresses concern that the Fair Work Act does not require Fair Work Australia to be satisfied that individuals selected for redundancy are fairly chosen. The ACTU adds that there is a risk that employers will be able to unfairly select individuals for redundancy. It believes that the Act should clearly specify that a redundancy is only genuine if the workers retrenched were fairly chosen. The Government indicates that there were 22 unfair dismissal claims dismissed in 2009–10 and 21 unfair dismissal claims dismissed in the first three quarters of 2010–11, arising from redundancy. The Committee invites the Government to continue to provide information concerning this provision of the Convention, including examples of court rulings taking into account the requirements for genuine redundancy.

Article 7. Procedure prior to or at the time of termination. The Committee refers to its 2009 observation and invites the Government to include in its next report information on the application of the Small Business Fair Dismissal Code with regard to workers’ opportunity to defend themselves against the allegations made prior to termination.

Articles 8 and 9. Procedure of appeal against termination. The Committee notes the ACTU’s comments indicating that the usual limitation period for civil claims is six years. The ACTU believes that the 60-day limit under the Fair Work Act is too short, as many workers may not be aware of the motive for the dismissal until well after the event. The Committee invites the Government to provide information on the effect given to these provisions of the Convention.

Article 11. Serious misconduct. The ACTU is concerned that the Small Business Fair Dismissal Code does not ensure that employees in small businesses are treated fairly. For example, the Code suggests that an employer may summarily dismiss an employee if he/she believes that the employee has engaged in a single act of theft, fraud or violence. The ACTU indicates that it is unclear whether Fair Work Australia will be able to inquire into the reasonableness of the employer’s belief in these cases. The Government indicates that for Fair Work Australia to determine that the Small Business Fair Dismissal Code has been complied with, employers must be able to show that they had reasonable grounds for the summary dismissal, which may include reporting the alleged theft, fraud or violence to the police. Employers who make false reports to the police may be liable for charges under other legislation. The Government indicates in its report that a number of Fair Work Australia decisions demonstrate that the tribunal will examine whether an employer had reasonable grounds for believing that an employee is guilty of serious misconduct. Keeping in mind the concerns raised by the ACTU, the Committee invites the Government to continue providing information on this issue.

[The Government is asked to reply in detail to the present comments in 2014.]

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The Committee notes the Government’s detailed report received in September 2009, including information provided by the states and territories, and their replies to the matters raised in its previous observation. The Committee also notes the comments received from the Australian Council of Trade Unions (ACTU) and the Government’s response to these comments. In its report, the Government indicates that the Fair Work Act which came into force on 1 July 2009, and which repeals and replaces the Workplace Relations Act, contains provisions relevant to the application of the Convention. The Committee also notes the creation of Fair Work Australia, the national workplace relations tribunal.

The Committee recalls its 2007 observation noting that the Workplace Relations Amendment (Work Choices) Act 2005, exempted businesses employing 100 or less employees from the remedies for unfair dismissal and was therefore inconsistent with the Convention. The Committee notes with interest that the 100 employee exemption has been removed under the Fair Work Act. The Committee also notes that the ACTU has welcomed the Fair Work Act’s restoration of unfair dismissal rights to most workers in the federal system. Furthermore, the Government indicates that, due to the relatively short time since the coming into force of the Fair Work Act, it is not yet possible to provide an accurate assessment of law and practice associated with it. The Committee notes with satisfaction the information provided by the Government and invites the Government to provide updated information on the application of the Convention in practice and examples of court rulings concerning questions of principle relating to the Convention.

Article 2, paragraph 2(b), of the Convention. Workers serving a qualifying period of employment. The Government indicates that in order to lodge an unfair dismissal application under the Fair Work Act, employees must have served a minimum period of employment. In businesses with 15 or more employees, the minimum employment period required is six months, whereas in small businesses, defined in the Act as employing fewer than 15 employees, the minimum employment period is 12 months. The ACTU indicates that this 12‑month qualifying period for workers in small businesses will exclude some small business employees from claiming unfair dismissal and will mostly affect young persons. In response to the concerns raised by the ACTU, the Government indicates that the Fair Work Act provisions balance the need for strong protections against unfair dismissals, while recognizing the special circumstances of small businesses. The Government further indicates that while employees in small businesses are subject to a longer qualifying period, they are nevertheless covered by the unfair dismissal protections from the Fair Work Act. The Committee invites the Government to provide information concerning the effects of these legislative changes on small businesses with regard to unfair dismissal claims.

Article 4. Valid reasons for dismissal. The Committee recalls that under the Workplace Relations Act, a claim could be made by an employee of a business with more than 100 employees. However, if the dismissal took place due to “genuine operational reasons”, the dismissal was not deemed to be unfair. Under the Fair Work Act, “genuine operational reasons” is no longer a defence from an unfair dismissal claim. Nevertheless, section 385(d) of the Fair Work Act provides that employers can dismiss employees in cases of genuine redundancy. The Government indicates that, in order to satisfy the requirements of genuine redundancy, the Fair Work Act obliges employers to attempt to redeploy an employee and comply with any relevant consultation obligations under an industrial instrument. The ACTU indicates that the Fair Work Act does not require Fair Work Australia to be satisfied that the individuals selected for redundancy are fairly chosen. The ACTU also indicates that there is a risk that employers will be able to unfairly select individuals for redundancy. In response to the concerns raised by the ACTU, the Government indicates that employees who are genuinely made redundant may not make an unfair dismissal claim but a general protections claim in case the reason for which they were considered as being redundant contravenes the general protections. These reasons include prohibited reasons for termination, including the choice to join or not join a union, or to participate in industrial actions. The Committee asks the Government to provide information concerning this provision of the Convention, including information on current cases of terminations of employment which satisfy the requirements for genuine redundancy.

Article 7. Procedure prior to or at the time of termination. The Committee notes that the Small Business Fair Dismissal Code, which came into operation on 1 July 2009, is also relevant to the application of the Convention. The Code contains the basic principles that a small business employer with less than 15 full-time equivalent employees needs to follow in order to ensure that Fair Work Australia considers a dismissal to be fair. These principles include providing the employee with a warning and an opportunity to rectify their behaviour, and guidance on when summary dismissal for serious misconduct is warranted. If a small business employer can prove to Fair Work Australia that they complied with the Code, a dismissal will be found to be fair. The ACTU is concerned that the Code does not ensure that employees in small businesses are treated fairly. For example, the Code suggests that an employer may summarily dismiss an employee if they believe that the employee has engaged in a single act of theft, fraud, or violence. The Government indicates that the Small Business Fair Dismissal Code does not take away unfair dismissal protection – its purpose is to facilitate a fair dismissal process. The Committee invites the Government to provide information on the application of the Small Business Fair Dismissal Code with regard to workers’ opportunity to defend themselves against the allegations made prior to termination.

Articles 8 and 9. Procedure of appeal against termination. Under the Fair Work Act, if a dismissed employee believes the dismissal was harsh, unjust or unreasonable, they may submit an unfair dismissal application for remedy to Fair Work Australia. With regard to summary dismissals in small businesses, the ACTU indicates that it is unclear whether Fair Work Australia will be able to inquire into the reasonableness of the employer’s opinion in cases concerning possible theft, fraud, or violence. In response to these concerns, the Government indicates that when an employee in a small business submits an unfair dismissal claim, Fair Work Australia will first determine compliance with the Code. The Code requires that in cases of summary dismissal for serious misconduct, it is sufficient that the employer has reported the misconduct to the police. However, the Code requires that the employer must have reasonable grounds for reporting the misconduct to the police. The Committee asks the Government to provide information on the effect given to these provisions of the Convention, more specifically, with regard to workers in small businesses.

[The Government is asked to reply in detail to the present comments in 2011.]

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1. The Committee notes the Government’s detailed report received in November 2006, and particularly the relevant provisions of the Workplace Relations Amendment (Work Choices) Act, 2005, which amends the Workplace Relations Act, 1996. The 1996 Act provided remedies for unfair dismissals and unlawful dismissals. Those remedies give effect respectively to Articles 4 and 5 of the Convention.

2. The Work Choices Act exempts employers who employ 100 employees or less from the provisions of the unfair dismissal provisions in the 1996 Act. The Act also removes the unfair dismissal remedy for genuine operational reasons such as those based on economic, technological, structural or similar matters relating to the employer’s business. The Government identified in its report two main justifications for the Act: (a) to remove constraints on demand for labour and to allow businesses to respond to changes in market conditions; and (b) the cost of defending an unfair dismissal claim, even one without merit, can be substantial and impacts more significantly on the hiring decisions of smaller and medium businesses.

3. Article 2, paragraphs 4–6, of the Convention. Categories of workers excluded from the scope of the Convention. The Government indicates in its report that the exclusion of employers with 100 employees or less is consistent with Article 2, paragraph 5, of the Convention, because “special problems of a substantial nature” arise depending on the size of the employer’s undertaking. The Committee recalls that the exclusion permitted by Article 2, paragraph 5, only applies if the Government lists the exclusion in the Government’s first report. It notes that the Government did not list the exclusion of employers with 100 employees or less in its first report received in September 1995.

4. Valid reasons. Remedies. The Committee notes that the Convention applies to all employees (Article 2, paragraph 1). It further notes that Article 4 states that the employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service. Article 8 states that workers who considered that their employment is unjustifiably terminated shall be entitled to appeal that termination to an impartial body. The Committee observes that the exclusion of employers with 100 employees or less from the remedies for unfair dismissal in the Workplace Relations Act, 1996 is therefore inconsistent with the Convention as well as the removal of the remedy to appeal against a termination which purports to be based on operational reasons. It thus requests the Government to amend the Workplace Relations Act so as to give full effect to the provisions of this Convention and to advise on developments in this regard.

5. The Committee further notes a communication of 3 December 2007 sent by the Government recording its commitment to making substantial amendments to Australia’s workplace relations legislative framework. It requests the Government to report on any amendments that touch upon the application of Convention No. 158.

[The Government is asked to reply in detail to the present comments in 2009.]

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The Committee has noted with interest the detailed information supplied by the Government in its first report, which covers the period ending June 1995. The Committee hopes the Government's next report will also provide full details on the implementation of the Convention in the following period, including the particulars of further legislation, judicial decisions and any practical difficulties as requested in Parts I, IV and V of the report form adopted by the Governing Body.