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Workplace Relations Amendment (Termination of Employment) Bill 2001

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2000

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

WORKPLACE RELATIONS AMENDMENT (TERMINATION

OF EMPLOYMENT) BILL 2000

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Employment, Workplace Relations and Small Business, the Honourable Peter Reith MP)

 



WORKPLACE RELATIONS AMENDMENT (TERMINATION

OF EMPLOYMENT) BILL 2000

 

OUTLINE

 

This Act will amend the Workplace Relations Act 1996 (the WR Act) to:

 

·          prevent forum-shopping by employees who are entitled to a remedy under the WR Act in respect of harsh, unjust or unreasonable termination;

 

·          make clear that persons engaged pursuant to a contract for services are not entitled to apply for a remedy in respect of termination of employment;

 

·          preclude an employee who has been demoted in his or her employment from seeking relief in respect of termination of employment where the demotion does not result in a significant reduction in remuneration and the employee continues in employment with the employer who effected the demotion;  

 

·          identify the matters to which the Australian Industrial Relations Commission (the Commission) and the Federal Court are to have regard in exercising their discretion to grant extensions of time for lodgement of applications in respect of both ‘harsh, unjust and unreasonable’ (unfair) termination and ‘unlawful’ termination;

 

·          provide that, in certain circumstances, a respondent to an application in respect of termination of employment can seek to have a motion for dismissal of the application for want of jurisdiction dealt with at any time;

 

·          confer power on the Commission to prevent an applicant for a remedy in respect of harsh, unjust or unreasonable termination proceeding to arbitration where the Commission forms the view that the application has a substantial prospect of being unsuccessful at arbitration;

 

·          require the Commission to have regard to the degree to which the size of the employer’s undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination, in considering whether a termination is harsh, unjust or unreasonable;

 

·          limit the Commission’s jurisdiction to find that a termination of employment is harsh, unjust or unreasonable where the employer can establish that the termination was effected because of the operational requirements of the employer’s undertaking, establishment or service;

 

·          preclude the Commission and the Federal Court of Australia from including in an amount to be paid to an employee in lieu of reinstatement a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused by the manner of terminating the employee’s employment;

 

·          confer power on the Commission to require a representative who has been retained pursuant to a contingency fee agreement or costs arrangement to disclose that fact to the Commission;

 

·          confer express power on the Commission to dismiss an application in respect of a termination of employment if the applicant fails to attend a proceeding;

 

·          widen access to costs orders and clarify that costs can be awarded in jurisdictional, costs and appeal proceedings;

 

·          confer power on the Commission to require an applicant to lodge an amount as security for any costs that might be awarded against him or her;

 

·          prevent an applicant from making two applications in relation to the same termination of employment; and

 

·          introduce a new Subdivision G in Division 3 of Part VIA, containing a prohibition on advisers from encouraging applicants to institute or continue speculative or unmeritorious proceedings in respect of harsh, unjust or unreasonable termination.

 

The Act will also make other minor or technical amendments. 

 

FINANCIAL IMPACT STATEMENT

 

The measures in this Act will have no significant impact on Commonwealth expenditure.

 



 
NOTES ON CLAUSES

 

Clause 1 - Short title

 

1.           This is a formal provision specifying the short title of the Act.

 

Clause 2 - Commencement

 

2.           This clause specifies when the various provisions of the Act are proposed to commence.

 

3.           Subclause 2(1) provides that clauses 1, 2 and 3 commence on the day on which the Act receives the Royal Assent. 

 

4.           Subclause 2(2) provides that, subject to subclauses (3) and (4), the remaining provisions of this Act commence on a day or days to be fixed by Proclamation.

 

5.           Subclause 2(3) has the effect that if a provision of this Act does not commence under subsection (2) within 6 months of the day on which the Act receives the Royal Assent, it will commence on the day following the end of that six month period.  Subclause 2(3) operates subject to subclause 2(4).

 

6.           Subclause 2(4) provides that if the Workplace Relations Amendment (Australian Workplace Agreements Procedures) Act 2000 or the Workplace Relations Amendment (Secret Ballots for Protected Action) Act 2000 commences prior to item 3 of Schedule 1 to this Act, then that item does not commence. 

 

Clause 3 - Schedules

 

7.           Clause 3 provides that an Act specified in a Schedule to this Act is amended or repealed as set out in the Schedule, and that any other item in a Schedule operates according to its terms. 



SCHEDULE 1 - TERMINATION OF EMPLOYMENT

 

Part 1 - Amendment of the Workplace Relations Act 1996

 

Workplace Relations Act 1996

 

Item 1 - Subsection 4(1)

 

1.           Item 1 proposes to insert a definition of ‘contingency fee agreement’ in subsection 4(1) of the Act. 

 

Item 2 - Subsection 4(1)

 

2.           Item 2 proposes to insert a definition of ‘legal practitioner’ in subsection 4(1) of the Act.

 

Item 3 - Subsection 4(1)

 

3.           Item 3 proposes to amend subsection 4(1) to insert a definition of ‘old IR agreement’.  ‘Old IR agreement’ means an agreement certified or approved under various now repealed provisions of the Act, and includes enterprise flexibility agreements approved under Part VIB of the Industrial Relations Act 1988 , as in force immediately before the commencement of item 1 of Schedule 9 to the Workplace Relations and Other Legislation Amendment Act 1996 .

 

Item 4 - At the end of subsection 48(1)

 

4.           Item 4 permits the President of the Australian Industrial Relations Commission (the Commission) to make rules in relation to the furnishing of security for the payment of costs by a person bringing an application in respect of termination of employment.  Item 34 would insert new section 170CJA, which would confer power on the Commission to order an applicant to lodge an amount as security for costs that might be incurred in respect of his or her claim.

 

Item 5 - Subsection 152(1A)

 

5.           Item 5 proposes the repeal of subsection 152 (1A) of the Act, as it has become redundant.  At present, subsection 152(1A) operates as an exception to subsection 152(1) of the Act.  Subsection 152(1) confirms that the provisions of a federal award prevail over a State law or State award to the extent of any inconsistency, and that the latter provision, to the extent of the inconsistency, is invalid.

 

6.           Subsection 152(1A) was included in the Act by the Workplace Relations and Other Legislation Amendment Act 1996 , and was subsequently amended by the Workplace Relations and Other Legislation Amendment Act 1997 .  The provision was included to ensure that a federal award employee falling outside the scope of subsection 170CB(1) of the Act (and therefore unable to apply under the Act for a remedy in respect of harsh, unjust or unreasonable termination) would not be prevented from applying for remedy in respect of harsh, unjust or unreasonable termination (however described) under State law merely because his or her federal award contained a clause concerning termination of employment - in particular, a clause pertaining to termination, change and redundancy.

 

7.           As a consequence of the limitations placed on the Commission’s arbitral jurisdiction by section 89A of the Act, the only relevant clauses that the Commission can include in awards are clauses concerning notice of termination, and redundancy pay.  Accordingly, federal awards can no longer be said to ‘cover the field’ in respect of harsh, unjust or unreasonable termination of employment.  Accordingly, the exception in subsection 152(1A) is now redundant.

 

Item 6 - After section 170CC

 

New Section 170CCA - Division to cover the field in certain cases

 

8.           Item 6 proposes to insert section 170CCA, which is a ‘covering the field’ provision.  It applies to the categories of employees mentioned in subsection 170CB(1), that is:

 

·          Commonwealth public sector employees;

·          Territory employees;

·          employees employed by a constitutional corporation; or

·          employees engaged by certain employers engaged in interstate and overseas trade and commerce

 

9.           Proposed section 170CCA is intended to preclude the above categories of employees (all of whom are eligible to apply for a remedy under the Act in respect of harsh, unjust or unreasonable termination) from applying for similar remedies under State law.            

 

10.         Proposed subsection 170CCA(3) makes clear that a reference to each of the categories of employee covered by subsection 170CB(1) includes a reference to an employee who is excluded by the Act, or by the Workplace Relations Regulations 1996 from a remedy or remedies under Division 3 of Part VIA of the Act.

 

Item 7 - Subsection 170CD(1) (definition of Federal award employee)

 

11.         Item 7 proposes to amend the definition of ‘Federal award employee’ in subsection 170CD(1) of the Act to insert a reference to ‘old IR agreement’.  (A definition of ‘old IR agreement’ is to be inserted by item 3.)  The amendment proposed by item 7 would make clear that employees whose terms and conditions of employment are governed by certified agreements and enterprise flexibility agreements made under the former provisions of the Industrial Relations Act 1988 are ‘Federal award employees’, and therefore eligible to seek a remedy in respect of harsh, unjust or unreasonable termination under Subdivision B of Division 3 of Part VIA of the Act.

 

Item 8 - After subsection 170CD(1)

 

12.         Item 8 proposes to insert new subsection 170CD(1A), which will make clear that persons engaged under a contract for services (ie independent contractors) are not entitled to apply for a remedy under the Act in respect of termination of employment. 

 

 

Item 9 - After subsection 170CD(1A)

 

13.         Item 9 proposes to insert new subsection 170CD(1B), which will provide that, for the purposes of the termination of employment provisions of the Act  (Division 3 of Part VIA), the expressions ‘termination’, or ‘termination of employment’, do not include a demotion in employment if the demotion does not involve a significant reduction in the remuneration of the demoted employee, and the demoted employee remains employed with the employer who effected the demotion. 

 

Item 10 - At the end of subsection 170CE(1 )

 

14.         Item 10 proposes to insert a legislative note, drawing attention to new subsection 170CG(4), which will provide that if it is established that a termination was effected because of the operational requirements of the employer’s undertaking, establishment or service, the termination cannot be found to be harsh, unjust or unreasonable, unless the circumstances are exceptional.  Subsection 170CG(4) would be inserted by item 27.

 

Item 11 - Subsection 170CE(8)

 

15.         Item 11 proposes the repeal of the existing subsection 170CE(8), and the insertion of new subsections 170CE(8) and (8A).

 

16.         Proposed subsection 170CE(8) would change the current test for accepting applications lodged out of time from requiring an assessment of whether ‘it would be unfair not to do so’ to whether ‘it would be equitable to accept the application’.

 

17.         Proposed subsection 170CE(8A) requires the Commission, in determining whether it would be equitable to accept an out-of-time application, to have regard only to the matters contained in the provision.

 

18.         The proposed legislative note makes clear that the criteria in proposed subsection 170CE(8A) are derived from principles employed by the Industrial Relations Court of Australia in Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298.

 

Item 12 - After section 170CE

 

New section 170CEA - Motions for dismissal of application for want of jurisdiction

 

19.         Item 12 proposes the insertion of a new section 170CEA. New subsection 170CEA(1) would allow an employer respondent to an application in respect of termination of employment to move for the dismissal of an application under section 170CE on the grounds that the Commission does not have jurisdiction to deal with the application.  The respondent would be able to move for the dismissal of an application at any stage of the proceedings, including before the Commission has begun dealing with the application.

 

20.         Where the respondent moves for the dismissal of an application on jurisdictional grounds prior to the matter being referred for conciliation by the Commission, and the respondent has not made a previous jurisdictional objection, new subsection 170CEA(2) would require the Commission to deal with the motion for dismissal before taking any other action in relation to the application, unless the respondent employer indicates that the jurisdictional objection may be dealt with at a later time. 

 

21.         Where the respondent moves for the dismissal of an application on jurisdictional grounds, and has done so previously, the Commission must deal with the motion, but new subsection 170CEA(3) would provide that the Commission may do so at any time it considers appropriate. 

 

Item 13 - Paragraph 170CF(2)(b)

 

22.         Item 13, in conjunction with items 14 - 22, proposes to introduce a new process in relation to progress to arbitration by the Commission of an application for a remedy in respect of harsh, unjust or unreasonable termination of employment. 

 

23.         New paragraph 170CF(2)(aa) would apply where an applicant’s claim in respect of termination of employment is on the ground, or includes the ground that, the termination was harsh, unjust or unreasonable.  In that circumstance, the Commission must indicate to the parties whether or not the Commission considers, on the balance of probabilities whether the applicant’s claim in respect of harsh, unjust or unreasonable termination is likely to succeed.

 

24.         New paragraph 170CF(2)(b) would require the Commission, in respect of grounds other than that of harsh, unjust or unreasonable termination, to indicate to the parties its assessment of the merits of the application insofar as it relates to that other ground or grounds. 

 

25.         Existing paragraph 170CF(2)(c), which permits the Commission to recommend that an applicant elect not to pursue a ground or grounds of the application, will be retained.

 

Item 14 - At the end of section 170CF

 

26.         Item 14 proposes to insert new subsections 170CF(3), (4) and (5), which will apply where the Commission has indicated, pursuant to paragraph 170CF(2)(aa), that, on the balance of probabilities, an application in respect of harsh, unjust or unreasonable termination is unlikely to succeed.   New subsection 170CF(3) will require the Commission to invite the applicant to provide further information in support of that ground within the period specified by the Commission. 

 

27.         If the applicant does not provide further information, or, after consideration of that additional material, the Commission concludes that the applicant has a substantial prospect of being unsuccessful at arbitration, it must issue a certificate to that effect.

 

28.         New subsection 170CF(5) will provide that the application in respect of the ground of harsh, unjust or unreasonable termination is dismissed, with effect from the date of issue of the certificate under new subsection 170CF(4).

 

Item 15 - Subsection 170CFA(1)

 

29.         Item 15 proposes to repeal existing subsection 170CFA(1) and replace it with a new subsection 170CFA(1). 

 

30.         Proposed subsection 170CFA(1) would apply where the Commission indicates that, on the balance of probabilities, the applicant is likely to succeed in arbitration on the ground referred to in paragraph 170CE(1)(a) (ie that the dismissal was harsh, unjust or unreasonable).  In that circumstance, the applicant could elect to proceed to arbitration to determine whether the dismissal was harsh, unjust or unreasonable, or to discontinue the application.

 

Item 16 - Subsection 170CFA(2)

 

31.         Item 16 proposes to amend existing subsection 170CFA(2). Subsection 170CFA(2), as amended, would apply where the Commission finds, on the balance of probabilities, that the applicant’s claim in respect of the ground of harsh, unjust or unreasonable termination is likely to succeed, and the Commission’s certificate also identifies the ground of an alleged contravention of section 170CM (ie failure to provide the requisite period of notice of termination, or payment of compensation in lieu of notice) as grounds in respect of which conciliation is, or is likely to be, unsuccessful.

 

32.         In this circumstance, the applicant could elect to:

 

·          proceed to arbitration to determine whether the dismissal was harsh, unjust or unreasonable; and/or

 

·          begin proceedings in a court of competent jurisdiction in respect of the alleged contravention of section 170CM; or

 

·          not pursue either ground of the application.

 

Item 17 - After subsection 170CFA(2)

 

33.         Item 17 proposes the insertion of a new subsection 170CFA(2A). This provision would apply where the conciliation certificate identifies the grounds mentioned in subsection 170CFA(2) as grounds where conciliation is likely to be unsuccessful and where the Commission subsequently concludes in a certificate given under new subsection 170CF(4) that the applicant’s claim in respect of the ground of harsh, unjust or unreasonable termination has a substantial prospect of being unsuccessful at arbitration.

 

34.         In this circumstance, the applicant can elect to commence proceedings in a court of competent jurisdiction in respect of the breach of section 170CM, or not to pursue this ground of the application.  [New subsection 170CF(5) provides that the application in respect of the ground of harsh, unjust or unreasonable termination is taken to be dismissed as at the date of issue of the certificate under new subsection 170CF(4)].

 

Item 18 - Subsection 170CFA(3)

 

35.         Item 18 proposes the amendment of existing subsection 170CFA(3).  Where the Commission’s certificate identifies the ground of alleged contravention of paragraph 170CE(1)(a) (ie harsh, unjust or unreasonable termination), and one or more of the grounds alleged contravention of one or more of the following provisions:

 

·          section 170CK - termination of employment on prohibited grounds;

 

·          section 170CL - employer’s failure to notify the competent authority in the case where the employer is proposing to terminate the employment of 15 or more employees for reasons of an economic, technological or structural or similar nature;

 

·          section 170CN - termination of employment in contravention of an order made by the Commission under section 170FA of the Act

 

as grounds where the conciliation has failed, or is unlikely to succeed, and the Commission also indicates that, on the balance of probabilities, the applicant is likely to succeed in arbitration on the ground of harsh, unjust or unreasonable termination, the applicant can elect to proceed to arbitration to determine whether the dismissal was harsh, unjust or unreasonable, or begin proceedings in the Federal Court of Australia in respect of the alleged contraventions of one or more of sections 170CK, 170CL or 170CN.  Alternatively, the applicant can elect not to pursue either aspect of the application.

 

Item 19 - After subsection 170CFA(3)

 

36.         Item 19 proposes the insertion of new section 170CFA(3A).  This provision would apply where the conciliation certificate identifies the same grounds as those mentioned in subsection 170CFA(3) as grounds where conciliation is likely to be unsuccessful, and where the Commission subsequently concludes in a certificate given under new subsection 170CF(4) that the applicant’s claim in respect of 170CE(1)(a) has a substantial prospect of being unsuccessful at arbitration.

 

37.         In this circumstance, the applicant could elect to commence proceedings in the Federal Court of Australia in respect of a contravention of sections 170CK, 170CL and 170CN (or a combination of these where more than one breach has been alleged), or not to pursue this ground of the application.  [The application in respect of the ground of 170CE(1)(a) (ie that the dismissal was harsh, unjust or unreasonable), is taken to be dismissed as at the date of issue of the subsequent certificate under new subsection 170CF(4).]

 

Item 20 - Subsection 170CFA(5)

 

38.         Item 20 proposes the amendment of existing subsection 170CFA(5).  Where the conciliation certificate identifies the grounds of: harsh, unjust or unreasonable termination, an alleged breach of the notice requirements in section 170CM, and an alleged contravention of one or more of sections 170CK, 170CL or 170CN as grounds where conciliation has failed, or is unlikely to succeed, and also indicates that, on the balance of probabilities, the applicant is likely to succeed in arbitration on the ground of harsh, unjust or unreasonable termination, the applicant would be able to:

 

·          elect to have the harsh, unjust or unreasonable termination ground of the application arbitrated by the Commission and do nothing else; or

 

·          elect to have the harsh, unjust or unreasonable termination ground of the claim arbitrated by the Commission, and apply to a court of competent jurisdiction for an order in respect of the alleged contravention of the requirement to provide notice of termination or compensation in lieu (section 170CM); or

 

·          apply to the Federal Court of Australia for a remedy in respect of the alleged contravention of one or more of sections 170CK, 170CL or 170CN, as well as a remedy in respect of the alleged contravention of section 170CM; or

 

·          do none of the above.

 

Item 21 - After subsection 170CFA(5)

 

39.         Item 21 proposes the insertion of a new subsection 170CFA(5A).  This provision would apply where the conciliation certificate identifies the same grounds as those mentioned in subsection 170CFA(5) as grounds where conciliation is likely to be unsuccessful and where the Commission subsequently concludes in a certificate given under new subsection 170CF(4) that the applicant’s claim in respect of the ground of harsh, unjust or unreasonable termination has a substantial prospect of being unsuccessful at arbitration.

 

40.         An applicant in this position would be able to elect do one, both or neither of the following:

 

·          apply to the Federal court for a remedy in respect of the alleged contravention of one or more of sections 170CK, 170CL or 170CN;

 

·          apply to a court of competent jurisdiction for a remedy in respect of the alleged contravention of section 170CM.

 

41.         The applicant would not be entitled to proceed to arbitration to determine whether his or her termination was harsh, unjust or unreasonable, as this aspect of the application is taken to have been dismissed from the date of issue of the subsection 170CF(4) certificate.

 

Item 22 - Subsections 170CFA(6) and (7)

 

42.         Item 22 proposes the inclusion of references to the new subsections proposed by items 17, 19 and 21 in subsections 170CFA(6) and (7).

 

Item 23 - Subsection 170CFA(7)

 

43.         Item 23 proposes to omit the reference to subsection 170CFA(8), which would be repealed by item 24.

 

Item 24 - Subsection 170CFA(8)

 

44.         Item 24 proposes to repeal subsection 170CFA(8).

 

45.         The effect of this amendment would be to remove an applicant’s ability to apply for an extension of time to lodge an election to proceed to arbitration of his or her claim in respect of harsh, unjust or unreasonable termination of employment, or pursue a remedy in the Federal Court of Australia in respect of an unlawful termination or a failure to provide notice of termination.

 

Item 25 - Paragraph 170CG(3)(a)

 

46.         Item 25 proposes the removal of the reference to a valid reason for termination based on the operational requirements of the employer’s undertaking, establishment or service.  This is consequential upon the amendment proposed by item 27.

 

Item 26 - After paragraph 170CG(3)(d)

 

47.         Item 26 proposes to add to the matters to which the Commission must have regard in determining whether a termination was harsh, unjust or unreasonable.  In addition to the other matters listed in subsection 170CG(3), the Commission would also be required to have regard to the degree to which the size of the employer’s undertaking, establishment or service would be likely to have on the procedures followed in effecting the termination.

 

48.         For example, where a respondent employer is a business which is too small to have a separate human resources function, the Commission would be required to take that fact into account when considering the extent (if any) to which the procedures followed in effecting the termination have a bearing on the issue of whether the employee’s termination was harsh, unjust or unreasonable.

 

Item 27 - At the end of section 170CG

 

49.         Item 27 proposes the insertion of new subsection 170CG(4).  This amendment would preclude the Commission from making a finding that the termination of an employee or group of employees was harsh, unjust or unreasonable where the respondent employer establishes that the employment was terminated on the ground of the operational requirements of the employer’s undertaking, establishment or service, unless the circumstances are exceptional.

 

50.         An employee who claims that his or her selection for redundancy was for a prohibited reason [ie in contravention of a ground or grounds in subsection 170CK(2)] would not be prevented from seeking relief in the Federal Court of Australia for a remedy in respect of unlawful termination.

 

Item 28 - Subsection 170CH(7)

 

51.         Item 28 proposes an amendment to subsection 170CH(7); this amendment is consequential upon the inclusion of new subsection 170CH(7A) by item 29.

 

Item 29 - After subsection 170CH(7)

 

52.         Item 29 proposes to insert new subsection 170CH(7) into the Act.  This provision would preclude the Commission from including in an amount to be paid to an employee in lieu of reinstatement a component by way of compensation for shock, humiliation, distress or other analogous hurt, caused by the manner of terminating the employee’s employment.

 

Item 30 - After section 170CI

 

New Section 170CIA - Representatives to disclose contingency fee arrangements

 

53.         Item 30 proposes the insertion of new section 170CIA.  New subsections 170CIA(1) and (2) would empower the Commission to ask a person appearing on behalf of a party to an unfair dismissal proceeding whether he or she is engaged pursuant to a ‘costs arrangement’ or, in the case of a legal practitioner, a ‘contingency fee agreement’.

 

54.         Subsection 170CIA(3) would require a representative or legal practitioner to inform the Commission where they have been retained under a costs arrangement or contingency fee agreement.

 

55.         Definitions of various terms are contained in proposed subsection 170CIA(5).  The proposed definition of ‘costs arrangement’ would not require a representative’s payment to depend on his or her client being successful, only to be related to the outcome of proceedings.  (The same applies to the definition of ‘contingency fee agreement’ in item 1.)

 

New Section 170CIB - Commission may dismiss application if applicant fails to attend

 

56.         Item 30 also proposes the insertion of new section 170CIB.  This would confer an express power on the Commission to dismiss an application under section 170CE in respect of termination of employment where the employee fails to attend a proceeding in relation to the application.

 

57.         Prior to dismissing the application, the Commission would be required to give the applicant a reasonable opportunity to be heard.

 

Item 31 - Subsections 170CJ(2),(3),(4) and (5)

 

58.         Item 31 proposes substantial amendments to the provisions relating to costs orders under the termination of employment provisions.

 

59.         The new provisions would broaden the scope for costs orders to be made in various ways.  Firstly, additional tests in relation to liability for costs would be inserted into section 170CJ so that more types of behaviour that will give rise to liability.

 

60.         Secondly, the requirements for existing tests would be simplified to enable greater access to costs.

 

61.         Thirdly, the amendments to subsections 170CJ(2), (3) and (4) would include express references to applications other than the initial application under section 170CE.

 

New subsection 170CJ(2)

 

62.         This amendment proposes to introduce a new test to assess whether costs should be awarded against applicants to proceedings.

 

63.         The applicant or party instituting proceedings would be liable for costs where the Commission decides that it should have been reasonably apparent to the applicant or the party instituting proceedings that the application or proceedings did not have a substantial prospect of success.

 

64.         The test in proposed subsection 170CJ(2) relates to the merits of the application, but would not require the likelihood of success to be as low as the ‘vexatious or without reasonable cause’ criteria in subsection 170CJ(1).  Where a party knew, or ought to have known, that it was likely the application or proceeding would fail, then the Commission would have the discretion to award costs, which is less than the level of certainty required under subsection 170CJ(1).

 

New subsection 170CJ(3)

 

65.         Proposed subsection 170CJ(3) restates the test for costs contained in existing subsection 170CJ(2) (ie prior to its proposed amendment) but with a slight alteration.

 

66.         The requirement that the Commission must have begun arbitrating an application under section 170CE before costs may be awarded would be removed.

 

New subsection 170CJ(4)

 

67.         Proposed subsection 170CJ(4) would allow costs to be awarded against a party where the Commission is satisfied that an unreasonable act or omission by that party in connection with the conduct of the proceeding resulted in the other party to the proceeding incurring costs.  An example is where one party incurs costs in preparing a response to the other party’s unwarranted procedural objection.

 

New subsection 170CJ(5)

 

68.         It is proposed that subsection 170CJ(5) be amended to provide that an application for an order for costs must be made within 14 days after either an application or a proceeding in relation to an application under section 170CE has finished, irrespective of how the application or proceeding was resolved.

 

New subsection 170CJ(5A)

 

69.         New subsection 170CJ(5A) would provide that the regulations may prescribe a schedule of costs in relation to applications before the Commission, and to proceedings in relation to an application under section 170CE.

 

Item 32 - Subsection 170CJ(7)

 

70.         Item 32 proposes a consequential amendment to subsection 170CJ(7) to amend the reference to the subsection dealing with schedule of costs.

 

Item 33 - At the end of section 170CJ

 

71.         Item 33 proposes the insertion of new subsection 170CJ(8), which would contain a definition of ‘proceedings relating to an application under section 170CE’ for the purposes of section 170CJ of the Act.  The new provision would list the types of proceedings that can result from an application under section 170CE and which therefore could be the subject of costs applications.  The provision also makes clear that the list is not exhaustive.

 

Item 34 - After section 170CJ

 

New section 170CJA - Security

 

72.         Item 34 proposes the insertion of a new section 170CJA, which would confer power on the Commission to order a person bringing an application under section 170CE to provide security in the event that the costs are awarded against that person.

 

73.         The Commission may only make such an order in exceptional circumstances. 

 

74.         Proposed subsections 170CJA(3) and 170CJA(4) would give the Commission wide discretion to set and vary the amount of security respectively.

 

75.         New subsection 170CJA(5) would permit the Commission to dismiss an application if security is not provided in accordance with an order.

 

Item 35 - Subsection 170CL(2)

 

76.         Section 170CL of the Act applies in the case where an employer proposes to terminate the employment of 15 or more employees for reasons of an economic, technological, structural or similar nature, or for reasons including such reasons.  At present, subsection 170CL(2) provides that the employer must give written notification of the proposed terminations to the Commonwealth Employment Service.

 

77.         Item 35 proposes to amend subsection 170CL(2) to remove the reference to the Commonwealth Employment Service, and provide that the notice must be given to a body prescribed by the regulations, or, failing prescription of such a body, to the Secretary of the Department administering the Act.  It is intended to prescribe Centrelink in the regulations, to reflect the fact that it currently receives the notices pursuant to a service arrangement between the Chief Executive Officer of Centrelink and the Secretary of the Department of Employment, Workplace Relations and Small Business.

 

Item 36 - Subsection 170CP(7)

 

78.         Item 36 proposes to amend the existing provisions pertaining to the discretion of the Federal Court to grant an extension of time to an applicant to lodge an application for a remedy in respect of unlawful termination.

 

79.         The proposed new test (which is that the Court must be satisfied that it would be ‘equitable’ to accept the application), and the criteria to which the Federal Court is to have regard, are similar to those proposed by item 11.  The legislative note to be inserted at the end of subsection 170CP(8) is the same as that proposed to be inserted by item 11 at the end of subsection 170CE(8A). 

 

Item 37 - Paragraph 170CR(1)(c)

 

80.         Item 37 proposes an amendment to paragraph 170CR(1)(c) of the Act; this amendment is consequential upon the proposed insertion of new subsection 170CR(1A) by item 38.

 

Item 38 - After subsection 170CR(1)

 

81.         Item 38 proposes to insert new subsection 170CR(1A), which would provide that any amount of compensation ordered by the Federal Court to be paid to an employee in lieu of reinstatement is not to include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused by the manner of terminating the employee’s employment.

 

Item 39- After section 170HB

 

New section - No second applications under section 170CE concerning same termination to be made .

 

82.         Item 39 proposes the insertion of new section 170HBA, which would expressly provide that an application in respect of a termination of employment of an employee cannot be made under section 170CE where a previous application was lodged under section 170CE in respect of the same termination of employment.

 

Item 40 - At the end of Division 3 of Part VIA

 

New Subdivision G - Unmeritorious or speculative proceedings

 

83.         Item 40 proposes the insertion of new Subdivision G of Division 3 of Part VIA, which would introduce an avenue of redress against advisers who encourage applicants to institute or pursue unmeritorious or speculative claims or proceedings.

 

New Section 170HD - Definitions

 

84.         New section 170HD sets out the relevant definitions for the purposes of proposed Subdivision G.

 

85.         In the proposed subdivision, ‘adviser’ means a person or body engaged for a fee or reward or a person who is an employee, official or agent of a registered organisation of employees, who represents an applicant in an unfair termination claim in that capacity.

 

86.         The definition of ‘encourage’ has been framed so as to exclude a right to seek a remedy where an applicant instituted or pursued an application and the adviser attempted to persuade the applicant not to do so.

 

87.         ‘Unfair termination application’ refers to an application alleging harsh, unjust or unreasonable termination of employment as the ground, or one of the grounds.

 

New section 170HE - Advisers not to encourage applicants to make, or to pursue, certain applications

 

88.         New section 170HE would establish a prohibition on an adviser encouraging an employee to make or pursue an application for unfair termination if, on the facts that have been disclosed or ought reasonably to have been apparent to the adviser, the adviser should have been, or should have become, aware that the application had no reasonable prospect of success.

 

New section 170HF - Applications to the Court

 

89.         New section 170HF would allow an application to be made to the Federal Court of Australia for an order imposing a penalty on an adviser for contravention of section 170HE.  Such an application could be made by an applicant to an unfair termination application, a respondent to an unfair termination application, or the Minister.

 

90.         An application to the Court would only be able to be made after the relevant unfair termination application had been determined, dismissed or discontinued.  This is to prevent the use of Subdivision G for tactical purposes by a party to an unfair termination application.

 

91.         Proposed subsection 170HF(4) expressly provides that the law relating to legal professional privilege is not to be affected by the requirements of this proposed Subdivision.

 

New section 170HG - Burden of proof

 

92.         New section 170HG proposes to create a reverse onus of proof in relation to proving whether the adviser contravened the prohibition in proposed section 170HE.  When an applicant for an order establishes a prima facie case of a contravention of section 170HE, the adviser would be taken to have contravened the section unless the adviser can establish the contrary on the balance of probabilities.

 

93.         The amendment recognises the fact that the evidence which would be required to prove that an adviser encouraged an unmeritorious or speculative claim might be difficult to obtain, particularly where an applicant for a penalty is seeking a penalty against the adviser of the other party to the unfair termination claim.  In that circumstance, there may be evidence of encouragement that is peculiarly within the knowledge of the adviser, and which, without a shift in the onus of proof, might not otherwise be revealed.

 

New section 170HH - Evidentiary matters

 

94.         New section 170HH would set out criteria that the Court must consider when deciding whether the relevant unfair termination application had ‘no reasonable prospect of success’.

 

95.         Before deciding this issue, the Court would be required to have regard to the outcome of the application before the Commission, and, where relevant, the contents of any certificate issued by the Commission under subsection 170CF(2) and subsection 170CF(4).

 

New section 170HI - Order that the Court may make

 

96.         New section 170HI would allow the Court, where it considers it appropriate to do so, to impose a penalty on an advisor who has been found to contravene section 170HE.  The Court would be able to impose monetary penalties, up to a maximum of $10,000 for a body corporate, and $2,000 for an individual.

 

 

Part 2 - Application and saving provisions

 

97.       Part 2 makes provision for the operation of the amendments made by this Schedule.

 

Item 41 - Application of items 1, 2 and 30

 

98.       Item 41 would provide that the proposed amendments in relation to the newly defined terms in section 4 of the Act, the obligation to disclose costs arrangements and contingency fee agreements, and the Commission’s express power to dismiss applications would apply in relation to those applications made under section 170CE of the Act on or after the commencement of those items.

 

Item 42 - Application of items 4 and 34

 

99.       Item 42 proposes that the amendments in relation to security for costs would apply in relation to applications made under section 170CE of the Act on or after the commencement of those items.

 

Item 43 - Application of item 11

 

100.     Item 43 proposes that the amendment in relation to the granting of extensions of time to lodge applications under section 170CE in respect of termination of employment would apply in relation to applications made under section 170CE of the Act on or after the commencement of this item.

 
Item 44 - Saving provision concerning certain motions for dismissal

 

101.     Item 44 deals with jurisdictional proceedings in relation to an application under section 170CE of the Act instituted prior to the commencement of item 12 but not yet determined at the commencement of that item.  Such a proceeding would be treated as if it were a motion for dismissal of an application under new section 170CEA, and that provision would apply. 

 

Item 45 - Application provision concerning certain certificates given under subsection 170CF(2)

 

102.     Item 45 proposes that the amendments pertaining to the content of conciliation certificates, and the requirement of the Commission to determine whether, on the balance of probabilities, an application in respect of harsh, unjust or unreasonable termination is likely to succeed, would apply in relation to applications made under section 170CE on or after the date on which item 13 commences.

 

Item 46 - Application of items 25 and 27

 

103.     Item 46 proposes that the amendments to proposed paragraph 170CG(3)(a) and proposed subsection 170CG(4) would apply in relation to applications made under section 170CE of the Act made on or after the date on which those items commence. 

 

Item 47 - Application of item 26

 

104.     Item 47 proposes that the amendment requiring the Commission to have regard to the size of the respondent employer in determining whether a termination is harsh, unjust or unreasonable would apply in relation to applications made under section 170CE of the Act on or after the date on which the item commences. 

 

Item 48 - Application of items 31, 32 and 33

 

105.     Item 48 proposes that the amendments to section 170CJ concerning the circumstances in which the Commission may make orders for costs would apply only in relation to a proceeding relating to an application under section 170CE of the Act made on or after the date on which those items commence. 

 

Item 49 - Application of item 36

 

106.     Item 49 proposes that the amendments pertaining to the test for the granting of extensions of time to lodge an application in the Federal Court of Australia for a remedy in respect of unlawful termination of employment would apply in respect of applications under section 170CP of the Act made on or after the day on which the item commences.

 

Item 50 - Application provision concerning unmeritorious or speculative proceedings

 

107.     Item 50 proposes that applications for orders under new Subdivision G of Part VIA, Division 3, would only be able to be made in relation to applications under section 170CE of the Act made on or after the day on which item 40 commences.