The Fair Work Bill received Royal Assent on 7 April 2009. The Fair Work Act 2009 (the Act), including the unfair dismissal provisions, came into operation on 1 July 2009. The provisions dealing with Modern Awards and the commencement of the National Employment Standards will come into effect on 1 January 2010.
Outlined below are the changes made by The Act to the ways in which claims for unfair dismissal will be made.
From 1 July 2009, an employee who makes a claim for unfair dismissal must do so within 14 days of the date of dismissal.
To be protected from unfair dismissal, the Act provides that the employee must:
Be employed for the minimum employment period (6 months if there are 15 or more employees and 12 months if there are less than 15 employees in his/her workplace); and
Either:
Be covered by a Modern Award;
Be covered by a Collective Agreement; or
Earn less than the high income threshold which is currently $106,300 per annum exclusive of superannuation.
There are exclusions for employees who are employed for a specified period or task; employed under a training arrangement; or demoted without significant reduction in duties or remuneration.
Fair Work Australia (FWA) will hear the applications. Until the Australian Industrial Relations Commission (AIRC) is completely phased out at the end of 2009, the AIRC and FWA will operate together. It is envisaged that any claims made before 1 July 2009 will remain with the AIRC and all claims lodged after 1 July 2009 will be heard by FWA. Appeals from AIRC decisions will be heard by FWA.
There are exemptions as follows:
The Act changes the position of small business employers. A small business is now defined as a business that employs less than 15 employees. The transitional arrangements for the Act provide that until 1 January 2011, the small business cut off will be determined as 15 full time equivalent employees. A straight head count will be used after that.
The Act does away with the distinction between probationary periods and qualifying periods. The Act provides that an employee must have been employed for at least 6 months (the minimum period of employment) to be entitled to make a claim for unfair dismissal.
The minimum period of employment is extended to 12 months for a small business employee, i.e. if employment is less than 12 months in a small business, there is no unfair dismissal claim!
The Act will require FWA to consider 4 initial matters before making a determination on the claim. They are:
Was the application brought in time;
Was the employee protected from unfair dismissal;
If the employee was a small business employee, was the dismissal consistent with the Small Business Fair Dismissal Code; and
Was the dismissal the result of a genuine redundancy.
The Act provides that a dismissal will not have been unfair if the dismissal was a case of genuine redundancy. The Act extends employer obligations in this regard when compared to the Workplace Relations Act 1996.
The decision must have been made that an employer no longer required the employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise and the employer must have complied with any consultation obligations set out in a Modern Award or Enterprise Agreement.
Further, a dismissal will not have been a case of genuine redundancy if it would have been reasonable in all the circumstances to:
Redeploy the employee within the employer’s enterprise; or
Redeploy the employee within an enterprise of an associated entity of the employer.
This is significant as employers conducting a redundancy process will now have a positive obligation to consider options for redeployment. The Act retains the notion that the primary remedy in any claim will be reinstatement and compensation will only be ordered where reinstatement is inappropriate.
A failure to comply with an order made by FWA will be a breach of the Act and a remedy can be sought under the Act’s civil remedy provision. Buy sell agreement help and advice.