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Employsure supports reform to Unfair Dismissal claims

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September 24 2019

By Leigh Johnston

Employsure welcomes comments from Attorney-General Christian Porter who has flagged a potential crackdown on unfair dismissal claims.

In speaking with The Australian, Mr Porter supported calls from Fair Work Deputy President Alan Colman who said that the current situation that allowed a worker to commence legal proceedings, fail to prosecute it and waste an employer’s time and money was “completely unacceptable”.

Mr Porter has suggested that the matter could form part of the mooted Workplace Relations System Review.

“Failure to properly pursue a matter once commenced and without formally withdrawing the claim means wasted resources, funded by the taxpayer — plus an unfair burden on the small-business employer that has to spend precious time and money to defend a non-pursued claim to its conclusion,” Mr Porter said.

“Given it is the FWC itself that is raising this as an issue for consideration, it appears appropriate (for it) to be a part of the upcoming discussion paper on potential reform to the small-business fair dismissal code.”

In a recent submission to the Small Business Association of Australia, Employsure’s Managing Director Ed Mallett outlined current flaws in the unfair dismissal system and the burden it can place on small business owners.

“As it stands, 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 what is essentially 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.

“This encourages employers to settle, as it is often the cheaper option than proceeding to arbitration or a hearing. Not only is this unfair, it has created a cottage industry of no win, no fee lawyers who prey on recently dismissed employees at the expense of small business owners, knowing that they are likely to receive “go away” money, even where prospects of success are low.

“This could be resolved through the Fair Work Commission taking on a more active role in pointing out clear weaknesses of an applicant’s case which may encourage such applicants to discontinue speculative claims. Further, the cost of bringing a claim could be increased in an effort to deter unmeritorious claims.

“The Federal Government’s announcement that it would review workplace relations is a welcome step towards creating a fairer and more efficient system for small business owners,” Mr Mallett said. “It will come down to action, and settling on a program that drives reform.”