Five things you may not know about the Fair Work Act

Despite the Fair Work Act being fully enacted nearly three years ago, details of the landmark legislation appear to remain a mystery to many employers.

 

A worrying study conducted by employment law consultancy Employsure earlier this week found that a massive 90% of businesses polled don’t know their obligations under the modern pay awards regime.

 

A further 87% of business managers are frustrated at the amount of red tape they have to follow, while 89% say the Fair Work Act is getting in the way of running their business.

 

Perhaps not surprisingly, given the widespread ignorance of the Fair Work laws, one in four businesses reported being threatened with legal action by an employee.

 

With Labor’s review of the Fair Work Act expected this week, it’s worth taking a refresher on the important aspects of your workplace obligations as an employer.

 

Here are five things that you really should know about the Fair Work Act:

 

 

1. Unfair dismissal laws apply to you, even if your business is tiny

 

It’s true that a different set of rules – the Small Business Fair Dismissal Code – applies to firms with fewer than 15 employees, but that doesn’t mean that you can hire and fire on a whim without following the proper process.

 

Employees may not be dismissed in ways that are “harsh, unjust or unreasonable.” This definition will vary depending on the circumstances of each case.

 

If you have fewer than 15 staff, disgruntled employees will have to have worked for you for at least 12 months to lodge an unfair dismissal claim and if you’ve followed the code, the firing will be deemed fair.

 

However, if you dismiss someone because of their race, sex, sexual preference, age, pregnancy, disability, religion or social origin, being a small business won’t protect you. Nor, going by a recent case, if an employee tells you to “get f…ed.”

 

Furthermore, if you take what’s called “adverse action” – defined broadly as “altering the position of the employee to the employee’s prejudice” – against a worker for a prohibited reason, such as if he or she complains about their employment conditions, then you have to justify your reasons for doing so.

 

Crucially, this burden of proof has shifted from employee to employer, so be prepared to defend yourself.

 

 

2. You may have to negotiate terms and conditions

 

Union action is rare in small businesses, but it doesn’t mean that employees won’t be able to demand a collective deal for their terms and conditions, under the Fair Work Act. You are obliged to act in “good faith” in these circumstances.

 

Employment lawyer Peter Vitale says: “Unions or employees can easily establish a legal right to force employers to negotiate collectively about terms and conditions of employment.”

 

“While the law does not require employers to reach any collective agreement, employees may exercise rights to take protected industrial action while no agreement is in place.”