Just how fair is the Fair Work Act?

28 August, 2015 by
Patrick Crosswell

The process for settling workplace relations disputes needs to be addressed so business operators don't have to bear the costs of baseless and damaging claims. Restaurant & Catering Australia reports. 

The Fair Work Act 2009 is intended to provide a fair and balanced industrial relations framework, allowing for reasonable protections for both employees and employers. The Fair Work Act 2009 was intended on adjusting the legislative framework to offer more protection to employees, and subsequently creating a "balanced framework for cooperative and productive workplace relations…" However, in practice the problem with the Act is that the balance is all wrong. 

Advertisement

In an attempt to allow employees who have been unfairly or unlawfully dismissed, the Fair Work Act 2009 was developed in such a way as to allow easy access to employees. Making a claim has never been so simple, and apart from a $68.60 application fee, there are no real hurdles which may prevent an employee from taking on their former employer. This can be good and bad.  

Those significantly disadvantaged by loss of employment, or through circumstances outside of their control should have easy access to a system that can and will administer just outcomes. However, far too regularly claims made through the Fair Work Commission are being used as a post-employment tactic, with the intention of getting a larger final pay out. Business owners, particularly small business owners are if anything, time-poor. Many small business owners are also financially deprived with cash flow. The inclination therefore, when presented with a claim of any sort, irrespective of its merits, is to settle the matter outside of a formal hearing. Settlement may cost business the equivalent of weeks in wages, but when weighed up against legal costs and time it is a far more attractive solution.  

Advertisement

It has become almost routine for some employees to file an unfair dismissal claim within the stipulated 21 day time frame. If the employee is willing to fill out the necessary form, and attend the mandatory conciliation hearing, then employers have little choice to participate. Regardless of the legitimacy of the claim, employers are forced to participate in a process that is not binding. Failure to come to an agreement during these conciliations escalates the matter to a hearing or conference. It is at this point where costs can be significant and so often it is the fear of escalation to this phase that forces employers to the negation table. 

The Fair Work Commission does have the power to award costs if an applicant is found to be making a vexatious claim, however this prohibitive function is predicated on the parties making it to a hearing. The problem actually lies at an earlier stage. Like a committal hearing in a criminal matter, the Commission ought to have a function that is able to assess the merits of claim before it is even listed for conciliation. Alternatively, the conciliation process should be varied to include a function able to prevent hearings being held on the simply unwinnable. It is important to note, that unlike criminal proceedings, the burden of proof is on the balance of probabilities. This means that many cases should at least be heard. Nonetheless, the purely vindictive, puerile and unwinnable cases should not be given the same weight as others. 

Advertisement

The system is not being used for its intended purpose, and when doing a cost benefit analysis, small business operators should not have to consider the cost of proving genuine fairness. 

This article was written by Patrick Crosswell, senior workplace relations advisor at Restaurant & Catering Australia.