Small business owners planning any hiring or firing, changes to staff hours or rates of pay will need to tread carefully following major changes to workplace laws which came into effect in July.
The federal government has introduced new industrial relations legislation titled the Fair Work Act 2009, which has replaced the 1996 WorkChoices legislation.
One of the major immediate changes under the new legislation is to the unfair dismissal laws. Lawyers expect to see a surge in the number of unfair dismissal claims under the new Act.
Under WorkChoices, small businesses – those with 100 employees or fewer – were exempt from unfair dismissal claims.
Under the new legislation, a small business is now defined as fewer than 15 full-time employees until January 2011. This enables employees who have worked for a small company for more than 12 months to make an unfair dismissal claim.
Those who have worked for a bigger company for more than six months can also make a claim. Despite the fact that the new unfair dismissal laws apply to all federal award covered employees, workers who earn more than $108,300 a year or are not covered by an award won’t be able to make unfair dismissal claims.
Other employees who cannot lodge an unfair dismissal claim include those:
- employed for a specified task or period of time, on a casual basis or seasonal workers;
- subject to a training agreement with limited duration;
- dismissed as a “genuine redundancy”; and
- working in a small business (fewer than 15 employees) dismissed in accordance with the Small Business Fair Dismissal Code of Practice.
The distinction between small and large businesses will be in place until January 2011. After this time, the 15-employee headcount will include all employees – permanent and casual.
To assist small businesses to navigate the new rules, the government has published the Small Business Fair Dismissal Code which sets out how a business owner can legally dismiss a staff member.
An independent statutory body, Fair Work Australia (FWA), replaces the Australian Industrial Relations Commission. It has the power to facilitate collective bargaining, approve enterprise agreements and adjust minimum wage and award conditions. It will also deal with unfair dismissal claims, industrial action and settling workplace disputes.
Claims must be lodged within 14 days of the unfair dismissal notification. This can be extended under “exceptional circumstances” at FWA’s discretion.
FWA also has the discretion to allow either party to be legally represented at a conciliation conference or a hearing.
The Council of Small Business of Australia (COSBOA) has warned most of Australia’s small businesses remain unaware of their rights and responsibilities and are not ready for the changes.
“Unfortunately, most small businesses are not aware of the significant impact this legislation will have on staffing matters,” COSBOA chief executive Jaye Radisich said.
“Unlike large businesses, small firms do not have in-house lawyers or human resources departments to help them navigate major workplace relations changes. Nor can they afford to hire expensive consultants to prepare their internal business systems for change.”
Ms Radisich urged small business owners who fall under the federal workplace relations system to seek advice before taking any action on hiring of firing staff.
Other changes under the new Act include individual, non-union bargaining shifting to “enterprise level collective bargaining underpinned by simple, good faith, bargaining obligations” and unions having right of entry even if they are not a party to an applicable enterprise agreement.
Australian workplace agreements (AWAs) and individual transitional employment agreements – the temporary replacements for the abolished AWAs – can no longer be made but will continue to operate until their normal expiry date.
From January 2010 new national employment standards and modernised awards will replace the Australian Fair Pay and Conditions Standard.
For more information, see www.workplace.com.au.
