A significant element in the new industrial regime proposed by the Rudd Labor government is the restoration, to most employees, of a right of action against their employer for unfair dismissal. Available remedies are intended to include orders for reinstatement of employment and payment of monetary compensation.
By 'unfair dismissal', I mean dismissal that is harsh, unjust and unreasonable. The unreasonableness might be substantive; that is, there was no reasonable basis for the employer's decision to dismiss. It might be procedural: the employer made the dismissal decision without following a fair procedure, such as giving the employee an opportunity to know the nature of the employer's concern and to explain any allegation of misconduct.
'Unfair dismissal' is to be contrasted with a dismissal that is unlawful, because it infringes one of the special protections set out in the relevant legislation. Examples are dismissals that infringe prohibitions on racial or sexual discrimination or are based on the employee's membership of, or activities within, a trade union. Protection against unlawful dismissal was maintained under WorkChoices. However, so far as most employees were concerned, the practical effect of that legislation was the abolition of any right of action for unfair dismissal, a much commoner situation than unlawful dismissal.
The Government's Proposal
The proposal of the Rudd government is to provide a right of action for unfair dismissal to all employees, subject to a qualifying period. The right of action will not be available where the dismissal takes effect within the first six months of the person's employment; 12 months if the employer has fewer than 15 employees.
Although it is not easy to see why the extent of the qualifying period should depend upon the size of the employer's workforce, the concept of a qualifying period makes sense. The concept recognises that an employer, and perhaps also the employee, may have made a poor decision in creating the employment relationship and therefore allows it readily to be terminated, during its early days. At that early point of time, it is less likely that the employee will have made significant commitments (personal or financial) on the strength of that relationship. The employee knows, or should know, that he or she is, in effect, on probation for the duration of the qualifying period.
The Industrial Relations Court of Australia Experience
During the period April 1994 to June 1997 inclusive, the Industrial Relations Court of Australia (IRCA), of which I was then Chief Justice, heard and determined the unfair dismissal claims that were brought pursuant to rights conferred by the Keating government's 1993 amendments to the Industrial Relations Act 1988, and which had resisted earlier attempts at settlement. In relation to each unfair dismissal claim, the Act required a mediation conference to be convened by a member of the Industrial Relations Commission (the Commission). In a majority of cases, an agreement resolving the claim was reached at that conference. The only cases that were passed back to the Court were those in which the Commission's mediation failed. Notwithstanding this, each year there were several hundred such cases.
Mediation having already failed, in relation to those cases that were returned to the Court, it might have been thought a waste of effort for the Court to try it again. However, we did try and achieved a two-thirds success rate. This did not necessarily mean the Commission member had not tried hard enough. The effluxion of time often brings second thoughts.
The unsettled cases went to trial, either before a judge or a judicial registrar. Respondents (the former employers) were usually represented by lawyers; applicants (the former employees) less often. The hearing of many cases occupied less than a day; more often two or three days, occasionally more. …