Workplace law changes for small business: The essentials explained

Yesterday we finally got the detail of the Federal Government’s new workplace relations laws including collective bargaining, unfair dismissal and arbitration.

Yesterday we finally got the detail of the Federal Government’s new workplace relations laws including collective bargaining, unfair dismissal and arbitration.

So you don’t have to wade through 600 pages of legislation, we have compiled a quick SmartCompany Q&A with Workplace Express industrial relations specialist, Mike Preston.

What’s the timetable?

Most of the changes, including those unfair dismissal changes, once they pass through the Senate, will be operational in July 2009.

The Coalition has not confirmed however that they will accept all of these changes. They have made noises they will oppose the unfair dismissal changes.

Does this mean by the next financial year, the unfair dismissal laws are back?

That’s right, although the Coalition has not confirmed they will accept the changes.

So how will the unfair dismissal code work?

The code applies, from 1 July 2009, to small business employers with fewer than 15 employees. Each full time, part time and long term casual employee will count as one employee. A long term casual employee is one who has been employed on a regular and systematic basis for at least 12 months.

Small business employees cannot make a claim for unfair dismissal in the first 12 months following their engagement. If an employee is dismissed after this period and the employer follows the code, then the dismissal will be deemed to be fair.

Employees who have been dismissed because of a business downturn or their position is no longer needed cannot bring a claim for unfair dismissal. However, the redundancy needs to be genuine. Re-filling the position with a new employee is not a genuine redundancy.

What if the employee is violent or a thief? How do I get rid of them?

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures.

For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

How do I move on a poor performer?

The small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned, either verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer may be required to provide evidence of compliance with the code if the employee makes a claim for unfair dismissal to Fair Work Australia. Evidence may include a completed checklist (see below for download), copies of written warning(s), a statement of termination or signed witness statements.

What happens if the employee appeals?

They can appeal, but it will only go somewhere if it is deemed in the public interest. Fair Work Australia will have to determine by law what is in the public interest, but if you sack someone by the guidelines there is little chance they can appeal.

Will they come and check I have followed the guidelines?

Yes. If an employee appeals, someone will come and check and hold a conference. If it is a private hearing it will take place probably at your workplace. But it might be a public hearing.

So lawyers would be present?

You would have to have permission from Fair Work Australia.

Do you have a copy of the checklist?

Download the Small Business Fair Dismissal Code checklist here. It is in the interests of the employer to complete this checklist at the time of dismissal and to keep it in case of a future unfair dismissal claim. However, it is not a requirement of the code that the checklist be completed.

How will it change the culture in small business?

It will promote clarity for employers who will be less fearful about what’s going on and how they engage with employees. The Government is hoping it will promote a more open dialogue.

Arbitration

Another major change is to introduce arbitration for low paid workers. What does that mean?

If you are an employer of low paid workers, they can make an application to go into special collective bargaining stream. Once in there Fair Work Australia will be heavily involved with bargaining. If agreement can’t be reached, an agreement might be imposed on the employer.

Who will that affect?

If you are an employee in say the cleaning sector or security or hospitality.

How many workers fit into the low paid category?

About 20%, and there are reports that it is likely that low paid workers will get better results in that process than award rates.

Presently the employer is under no compulsion to collectively bargain or accept the agreement. But under the new rules, you can’t refuse.

Collective bargaining

Collective bargaining is back. What does it mean?

It allows employees to require employers to collectively bargain

How many employees do you have to have to typically be involved with collective bargaining?

Probably around 20 to 30 employees or more.

Can unions walk in the door under the new rules?

If a union has one member in the workplace under the new rules they have rights of entry to that workplace to engage in discussions and participate in collective bargaining.

At the moment unions only have those rights to participate in collective bargaining there is a union collective agreement being negotiated.

So unions have more rights?

They haven’t expanded the rights of entry that unions have; all they have done is expand the circumstances under which unions can exercise those rights.

Remember unions still have very limited resources, so usually they don’t have resources to cover workers in small workplaces.