Opposition claims Fair Work Ombudsman officials encourage employers to pay “go away” money in unfair dismissal cases

Fair Work Ombudsman Nicholas Wilson will investigate claims from Liberal senators that officials from the Ombudsman’s office are telling employers to pay “go away” money to former staff rather than trying to defend an unfair dismissal claim.

The claim from Liberal Senator Michaelia Cash was made at a Senate Estimates hearing last night.

Cash told SmartCompany this morning that evidence at this stage was anecdotal and said it would be difficult to ask those who have made the claims to come forward. A spokesman for the Opposition’s small business shadow minister, Bruce Billson, also confirmed they have heard similar claims about the rise of go away money.

A spokesman for the Fair Work Ombudsman said the agency had agreed to investigate the claims and would report its findings to the Senate Committee before making comment to the media.

Allegations that go away money could be on the rise are hardly surprising, given what would appear to be a big jump in the number of unfair dismissal claims being lodged with Fair Work Australia.

Officials told Senate Estimates last night that 5,208 claims were lodged in the second half of 2009, after Labor’s new laws came in on July 1.

There were 7,994 unfair dismissal claims lodged across the 12 months ended June 30, 2009, which suggests the claim rate is now much higher on a annual basis.

Figures from Fair Work reveal 2,782 of the 5,208 unfair dismissal claims were settled through conciliation.

That’s a worry for the Australian Chamber of Commerce and Industry, given that the IR systems in operation prior to Work Choices (the Howard Government system exempted SMEs with 100 or less staff from unfair dismissal claims) had a settlement rate of 75-80%.

ACCI chief executive Peter Anderson told The Australian he is concerned about early evidence about a rise in claims, go away money and unfair dismissal cases being pushed to arbitration.

Fair Work Australia officials were also quizzed last night on the issue of take-home pay orders, which can be used by Fair Work Australia to ensure a worker is not worse off under the new Modern Awards system.

Senator Cash says the officials told the hearings late last night that Fair Work Australia could only make an order where a worker applies for one. Cash says this calls into question Prime Minister Kevin Rudd’s promise that no worker will be worse off under the new system.

“What happens if the employee doesn’t actually make a take home pay application?” Cash says.