Unfair Dismissal Laws

Many small business employers breathed a sigh of relief when the federal government introduced a 100-employee threshold for unfair dismissal applications – protecting small businesses that often lack internal HR expertise and assistance with termination processes. The threshold meant that any employer with under 100 employees could not have an unfair dismissal claims made against them from any of their employees.

The revised unfair dismissal policy proposed by the Australian Labor Party means that all employers will once again need to ensure they are vigilant when addressing performance problems with their employees in order to reduce the success of any unfair dismissal claim made against them.

Unfair Dismissal Laws for Small Businesses.
The Australian Labor Party’s policy platform provides significantly stronger unfair dismissal laws for employees, particularly those engaged in small businesses. The 100 employee threshold not longer applies and now all employees have the right to claim unfair dismissal if they believe they have had their employment terminated unfairly. The ALP policy provides that employees engaged in small businesses with 15 or fewer employees, will be exempt from unfair dismissal for up to 12 months (even permanent employees). After an employee has worked in a small business for 12 months or longer, they will be able to access unfair dismissal relief upon termination of employment.

Employers with 15 Employees or More Will No Longer Be Considered “Small Businesses”
Under the ALP policy, employers who engage 15 employees or more will no longer be considered small businesses and will have to comply with the general unfair dismissal provisions. The ALP’s policy proposes that all employees will be required to work a 6 month qualifying period (which is line with the current legislation). After an employee successfully completes their 6 month qualifying period, they will be able to access unfair dismissal relief in the event that their employment is terminated.

Reducing the Risk of Claims!
The only way of reducing the risk of claims, which is reducing the potential for an unfair dismissal claim against you to be successful, in these circumstances is to have good performance management procedures in your business. Businesses of all sizes will have to adopt formal performance management procedures to reduce the risk of a successful claim. Some features of a good performance management system are:

Having regular performance meetings with all staff.
Keeping detailed records of all performance-related discussions with employees.
Having detailed performance improvement plans in place for employees who are no performing to your acceptable standard.
A formalised counselling process for employees who have failed to improve their performance.
Having well-drafted warning letters and letters of termination.

Employment Innovations specialises in developing performance management systems for employers of all sizes. They can develop a best practice performance management system for your business. Don’t risk unfair dismissal claims– make sure you get a performance management system in place as soon as possible! Contact them to get a consultant to start building a performance management system for your business. You can call them on (02) 9334 5555.