Observation (CEACR) - adopted 2011, published 101st ILC session (2012)

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

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.]