Calls Escalate to Reform Complex IR System.

Published August 12, 2019 (last updated July 17, 2020) -

Scott Morrison is facing growing pressure from his backbench and leading business groups to make meaningful changes to industrial relations laws amid warnings that the system is critically broken.

In the past week alone, business groups such as Small Business and Family Enterprise Ombudsman’s Kate Carnell, Small Business Association Australia’s Anne Nalder, and workplace specialist firm, Employsure’s Ed Mallett have ramped up calls for change.

Each of the groups have released reports, submissions, and recommendations with compelling arguments for the overhaul of unfair dismissal laws and the ‘simplification’ of the IR system.

Small Business and Family Enterprise Ombudsman Kate Carnell on Tuesday published a review of the Small Business Fair Dismissal Code saying it is “not delivering what was intended”. The Ombudsman’s review called for separate processes under the code for serious misconduct, conduct and redundancy, and for the establishment of a dedicated small business division of the Fair Work Commission to deal with unfair dismissal cases.

“The code in its current form is not achieving the ends it is supposed to,” Ms Carnell said. “The way it was written left too many holes for lawyers to drive through.”

Ms Carnell said the ambiguity in the code means too many small businesses are being pulled into unfair dismissal hearings which are costly and impact productivity.

On Friday, Employsure and the Small Business Association of Australia announced a new partnership to advocate two key areas of workplace reform.

Employsure, founder and managing director Ed Mallett, said, “There has been a growing need to reform the system for small businesses that find themselves caught in the web of complexity that is expensive, time-consuming, and poorly explained by regulators.”

In the submission letter, Mr Mallett put forward two key areas of reform with corresponding recommendations: “I believe that there are two specific areas where we feel the Government could take constructive (and relatively simple) action to assist small business owners. They are jurisdictional objections and Unfair Dismissal disparity.”

Mr Mallett suggested that the barriers to bringing an unfair dismissal claim are too low.

“An employee is able to file an Unfair Dismissal claim in the Fair Work Commission for a small fee of $73.20 (which is waived in cases of financial hardship). In a no costs jurisdiction, this means an employee can bring a claim that is without prospects of success and is unlikely to suffer the consequences of having to pay the other party’s legal costs,” his submission said.

The cost of bringing a claim could be increased to “deter unmeritorious claims”, the submission said.

Under the current process, every unfair dismissal claim made against an employer in the Fair Work Commission is listed for a conciliation. At this conciliation, a small business owner is required to attend and respond and, in most cases, offer a monetary amount to settle the matter. It is our experience that this offer of a monetary settlement is actively promoted at the conciliation to make the matter ‘go away’,” he wrote.

“We recommend an amendment whereby claims made by ineligible applicants can be reviewed and dismissed by the Fair Work Commission before progressing to conciliation.”

Another push for change is emerging from the backbench, to exempt small and medium businesses from unfair dismissal laws. Other targets are the enterprise bargaining system and modern awards.

Prime Minister has asked Industrial Relations Minister Christian Porter to come up with an IR policy, and business groups are awaiting action.

Queensland Liberal National party senator Amanda stoker said the application of unfair dismissal laws to small and medium sized businesses was a “block to growth.”

“Just as uncertainty about casual employment arrangements stops a business from hiring, so, too, does the threat of litigation from a staff member that’s not working out,” she said.

She also criticised the “ridiculous complexity” of the modern award system saying, “we should accept that this unreasonable complexity has to have played a part in at least some cases of staff underpayment that we see reported.”


Media Enquires.

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Notes to Editor.

  • Employsure is Australia and New Zealand’s leading workplace relations specialist, helping over 25,000 small businesses to confidently manage their staff each day. For more information visit
  • A snapshot  report of the issues facing small and medium enterprises (SMEs) across various industries can be accessed here.
  • Interviews with Ed Mallett, founder and Managing Director of Employsure are available upon request.

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