Kate Carnell has called for a new small business division within the Fair Work Commission

EWIN HANNAN
AUGUST 6, 2019
The Australian

Small Business Ombudsman Kate Carnell has called for a new small business division within the Fair Work Commission, but backed off a push to cut the maximum compensation paid to unfairly sacked workers.

Ms Carnell today unveiled a series of proposed changes to the Small Business Fair Dismissal Code, explicitly denying they were designed to make it easier for small employers to sack workers.

“Put simply, the Small Business Fair Dismissal Code in its current form, is not working in the way it was originally intended,” she said.

“It is ambiguous and open to interpretation, particularly by lawyers, which means too many small businesses are being pulled into unfair dismissal hearings which are costly and impact productivity.”

Ms Carnell released a review of the code which said a small business division within the commission would help make the management of claims against employers “less resource intensive, less costly and able to be navigated without having to seek out legal advice”.

After Attorney-General and Industrial Relations Minister Christian Porter announced a review of the workplace relations system in June, Ms Carnell said she would urge him to back cutting the maximum compensation granted against a small business in dismissal cases from six to three months’ pay.

“The issue with compensation is to ensure the amount is reasonable for the size of the business,” she told The Australian in June. But her review released today says the compensation cap cut should only be explored once an amended code is subject to a further review within 12 months and “if problems persist”.

The review calls for changes to the code including the removal of “qualifying language that is open to contest and interpretation”, such as where the commission needs to establish if an employer had a ‘reasonable belief’ that conduct was serious enough to warrant immediate dismissal.

Figures released by the commission show the tribunal received 3583 unfair dismissal applications in the first three months of this year. “Most were settled during mediation but for the 172 cases that were presented to the commission, 111 were dismissed because they were without merit or deemed legally invalid, meaning they should not have gone to the Commission in the first place,’’ Ms Carnell said. “By taking the ambiguous language out of the code such as ‘reasonable grounds,’ ‘valid reason,’ and ‘reasonable chance’ and improving the checklist questions, small businesses will be in a much better position to comply.”