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Workplace Relations Amendment (Fair Dismissal Reform) Bill 2004

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(Circulated by authority of the Minister for Employment and Workplace Relations,

the Honourable Kevin Andrews MP)






The Bill would amend the Workplace Relations Act 1996 (WR Act) to protect small businesses from unfair dismissal claims. 

The Bill proposes to:

·          prevent employees of small businesses (other than apprentices and certain trainees) from applying under the WR Act for a remedy in respect of harsh, unjust or unreasonable termination of employment (‘unfair dismissal’); and

·          require the Australian Industrial Relations Commission (the Commission) to order that an unfair dismissal application made by a small business employee is invalid, if the Commission is satisfied that the application is outside the Commission’s jurisdiction because of the small business exemption. The Commission would have the power to make such an order without holding a hearing.

For the purposes of this Bill, a ‘small business’ is a business with fewer than 20 employees, including:

·          any casual employee who has been engaged by the employer on a regular and systematic basis for at least 12 months (but not other casual employees); and

·          the employee whose employment was terminated.

Financial Impact Statement

The Bill has no financial impact on the Commonwealth Budget.




Clause 1: Short title

This is a formal provision specifying the short title of the Workplace Relations Amendment (Fair Dismissal Reform) Act 2004 (the Act).

Clause 2: Commencement

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

Sections 1 to 3 will commence on Royal Assent.  Schedule 1 will commence on a day to be fixed by Proclamation. However, if it has not commenced within 6 months after Royal Assent, it commences on the first day after that period. 

Clause 3: Schedule(s)

Clause 3 provides that an Act specified in a Schedule to this Act is amended or repealed as set out in the Schedule, and that any other item in a Schedule operates according to its terms. 




Item 1: Subsection 170CE(1)

1.1     Item 1 proposes to amend subsection 170CE(1) to include a reference to proposed subsection 170CE(5C).  Section 170CE(1) sets out the grounds on which an employee may seek an order from the Commission in respect of a termination of employment.  Proposed subsection 170CE(5C) (see item 2 below) would preclude certain employees of small business from making unfair dismissal applications.  It would not prevent small business employees from making applications on other grounds set out in section 170CE.

Item 2: Before subsection 170CE(6)

1.2     Item 2 would insert new subsections 170CE(5C), (5D) and (5E) into the WR Act.  The effect of these provisions would be to prevent employees of small business (except apprentices and certain trainees) from applying for an unfair dismissal remedy.

New subsection 170CE(5C)

1.3     New subsection 170CE(5C) would provide that an unfair dismissal application (or an application including an unfair dismissal claim) may not be made under subsection 170CE(1) where, at the relevant time, the respondent employer employed fewer than 20 people.  All regular employees must be counted when calculating the number of employees employed.  This includes, but is not limited to, the employee who has been terminated (see paragraph 170CE(5C)(a)) and casual employees who have been engaged by the employer on a regular and systematic basis for at least 12 months, but does not include any other casual employee (see paragraph 170CE(5C)(b)). 

New subsection 170CE(5D)

1.4     New paragraph 170CE(5D)(a) would provide that the small business exemption in subsection 170CE(5C) does not apply where an applicant for an unfair dismissal remedy was, at the relevant time, an apprentice.  The term ‘apprentice’ retains its ordinary meaning.

1.5     New paragraph 170CE(5D)(b) would provide that the small business exemption in subsection 170CE(5C) does not apply where an applicant for an unfair dismissal remedy was, at the relevant time, a trainee under a traineeship in respect of which he or she had signed a training agreement registered with a State or Territory training authority.  This is to ensure that trainees whose employment is ongoing are able to bring an unfair dismissal claim, even if they are employed by a small business.

1.6     It should be noted that although apprentices and trainees would not be affected by the proposed small business exemption, they may be excluded from seeking an unfair dismissal remedy for other reasons. 

1.7     Apprentices may be excluded on the basis that they are engaged under a contract of employment for a specified period of time within the meaning of paragraph 170CBA(1)(a) of the WR Act.  However, this will depend on the terms of the particular contract of employment. 

1.8     Trainees whose traineeship is for a specified period, or is for any other reason, limited to the duration of a traineeship agreement are excluded from bringing unfair dismissal claims under paragraph 170CBA(1)(e) of the WR Act.  ‘Trainee’ and ‘traineeship agreement’ are defined for the purpose of this exclusion in subsection 170CD(1) of the WR Act.  

New subsection 170CE(5E)

1.9     New subsection 170CE(5E) would define the term ‘relevant time’ used in proposed subsections 170CE(5C) and (5D).  The time for calculating the number of people employed for the purpose of applying the small business exemption is either when the employer gives the notice of termination or when the employer terminates the employee’s employment, whichever happens first.

New subsection 170CE(5F)

1.10     New subsection 170CE(5F) would provide that the definition of ‘trainee’ in subsection 170CD(1) of the WR Act does not affect the meaning of the term ‘trainee’ for the purposes of proposed paragraph 170CE(5D)(b).

1.11     This is to make it clear that that the definition of ‘trainee’ found in subsection 170CD(1) of the WR Act, would not affect the operation of the proposed small business exemption provisions.  Accordingly, trainees who are ongoing employees of small businesses, as defined in paragraph 170CE(5D)(b) would be able to bring unfair dismissal claims even though non-ongoing trainees as defined in subsection 170CD(1) would not, due to the operation of the exclusion in subsection 170CBA(1)(e).

Item 3: After section 170CEA

New section 170CEB - Dismissal of applications that cannot be made because of the small business exemption

1.12     New subsection 170CEB(1) would provide that the Commission must order that an unfair dismissal application is not validly made if it is satisfied that, because of the small business exemption set out in new subsection 170CE(5C), the aggrieved employee was not entitled to make the application.

1.13     New subsection 170CEB(2) would provide a direction to the Commission to decide whether to hold a hearing prior to making an order under section 170CEB(1).  In deciding whether to hold a hearing, the Commission would be required to take into account the cost to the employer’s business resulting from the employer attending the hearing.

1.14     New subsection 170CEB(3) would give the Commission the power, before making an order under this section, to request the employer or the employee to provide further information during a specified period.  For instance, information may be required to assist the Commission in determining whether an application had been made against an employer with fewer than 20 employees. 

1.15     New subsection 170CEB(4) would require the Commission to have regard to any further information received during the specified period.  These provisions would not prevent the Commission from sending out further notices requesting more information, in light of information already received.


Item 4: After subsection 170JD(3)

1.16     Section 170JD of the WR Act provides that the Commission may vary or revoke an order under Part VIA, on application by a party (or their representative) who is covered by the order.  New subsection 170JD(3A) would clarify that a person who is covered by an order made under section 170CEB is not entitled to apply to have that order varied or revoked.

Item 5: After subsection 170JF(2)

1.17     Section 170JF of the WR Act provides that a party who is entitled to apply to vary or revoke an order under section 170JD is entitled to appeal to a Full Bench of the Commission under section 45 of the WR Act against an order under Part VIA.  New subsection 170JF(2A) would provide that there is no right to appeal to a Full Bench against an order under section 170CEB.

Item 6: Application of amendments

1.18     Item 6 would provide that the proposed amendments set out in items 1 to 5 of the Schedule apply to unfair dismissal applications made, or purported to have been made, by employees whose employment, to which the application or purported application relates, started after the commencement of the provisions.  This ensures that the provisions do not operate retrospectively.