Observation (CEACR) - adopted 2017, published 107th ILC session (2018)

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

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.