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Limitations On Redundancy |
Changes to rules on unfair dismissal |
The new industrial relations laws introduced in July change the thresholds and qualifying periods for unfair dismissal claims. |
The Fair Work Act has reduced the small-employer exempt threshold from 100 employees to less than 15. These include casual workers employed on a "regular and systematic" basis. As some compensation, the protection against unfair dismissal claims provided by earlier legislation has been extended for small employers to 12 months. |
The new laws increase the number of employees who can access the unfair dismissal laws from 44 per cent to 80 per cent of the workforce. Interestingly, the government has perhaps sought to limit the number of potential applications by shortening the period in which an application for unfair dismissal must be brought from 21 to seven days of termination of employment. |
Claims for unlawful dismissal can be made within 60 days. For both claims, the new authority handling claims may allow more time if it is satisfied there are exceptional circumstances. |
The capacity to lay off staff for operational reasons is now far more circumscribed. The Fair Work Act replaces the term "genuine operational reasons" with "genuine redundancy" which it defines as "the person's employer no longer required the person's job to be performed by anyone because of changes in the operational requirements and ... the employer has complied with any obligation in a modern award or enterprise agreement that applied ... to consult about the redundancy". |
It appears that employers will also have to review their associated companies to see if they can redeploy employees rather than make them redundant; the term 'redeploy' is yet to be tested and defined. |
Importantly for employers, the new regulations have not altered the meaning of the term "serious misconduct" or changed the criteria for deciding whether a dismissal was harsh, unjust or unreasonable. |
The new laws effectively continue to exclude high income earners from the right to bring an unfair dismissal claim, offering considerable protection to large employers who employ a highly remunerated workforce. The high-income threshold at 1 July 2009 was $108,000 and it is to be indexed on 1 July each year. The threshold includes not just base salary but can include the "real or notional money value" of nonmonetary benefits. |
