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Lawyer explains what constitutes 'operational reasons' in new industrial relations legislation; minister says that courts will decide whether an employer is justified in dismissing an employee for 'operational reasons'



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This transcript has been prepared by a source external to the Department of the Parliamentary Library.

 

It may not have been checked against the broadcast or in any other way. Freedom from error, omissions or misunderstandings cannot be guaranteed.

 

For the purposes of quoting verbatim from a transcript, it is advisable to verify the transcript against the broadcast.

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PM

 

Thursday 23 March 2006

Lawyer explains what constitutes 'operational reasons' in new industrial relations legislation; minister says that courts will decide whether an empl oyer is justified in dismissing an employee for 'operational reasons'

 

MARK COLVIN: The Federal Government is denying union claims that its new workplace laws effectively abolish unfair dismissal protection for all Australian workers. 

 

It was always clear
that companies with fewer than 100 employees would be exempt from unfair dismissal laws, but it's now been revealed that larger companies will be able to dismiss workers for what are called "operational reasons". 

 

Defending the change, the Workplace Relations Minister Kevin Andrews says workers will have the right to challenge their sacking in the Industrial Relations Commission. 

 

But a leading legal consultancy firm says it's a "catch all" provision, which leaves workers with far less protection that they currently have. 

 

Jean Kennedy reports. 

 

JEAN KENNEDY: In the lead up to next Monday's official start to the new Federal workplace relations laws, the legal workplace consultancy firm Fisher Cartwright Berriman, has been briefing businesses on what they mean. 

 

It told an audience of several hundred business leaders at a breakfast briefing in Sydney that one provision under the laws allows employees to be dismissed for "operational reasons", describing it as a catch all which had slipped under the radar. 

 

While companies with fewer than 100 employees are already exempt from unfair dismissal laws, the loophole for getting rid of workers at big corporations is news to most. 

 

Campbell Fisher is the Managing Partner of Fisher Cartwright Berriman and says the firm stands by its assessment of the contentious provision. 

 

CAMPBELL FISHER: When you have a look at the definition in the legislation, I think its breath will give rise to quite a number of circumstances where employees will be dismissed from employment, and unable to challenge it through an unfair dismissal, unless they can establish that it wasn't a bona fide operational reason. 

 

JEAN KENNEDY: What would constitute a bona fide operational reason? 

 

CAMPBELL FISHER: A bona fide operational reason is going to go to reasons that relate to economic, technological or structural issues, associated with an employer's undertaking or business. And we probably won't have great clarity on exactly what those words mean until the courts ultimately interpret them. 

 

JEAN KENNEDY: Well, that sounds like a catch all doesn't it? That's pretty broad. 

 

CAMPBELL FISHER: It's certainly broad. I think most people when they first heard about it thought that, the kinds of circumstances would be predominately redundancy circumstances, but the legislation doesn't actually talk in terms of redundancy and so we can only assume that the issues which are designed to fall within that definition, are broader than redundancy.  

 

JEAN KENNEDY: While Mr Fisher's firm usually represents businesses in court, it occasionally represents workers and he believes the overall changes to the system, and certainly this provision, will leave workers worse off. 

 

CAMPBELL FISHER: There will certainly be a range of employees who will be capable of being dismissed, who today would have a right to challenge that dismissal by accessing unfair dismissal laws, and under the new laws will be denied the right to challenge it through the unfair dismissal laws, and that is certainly a lower social protection.  

 

JEAN KENNEDY: The National Secretary of the ACTU, Greg Combet, claims the Government is using the clause to achieve its goal of getting rid of unfair dismissal laws across the board. 

 

GREG COMBET: Well John Howard said he was only going to abolish unfair dismissal protection for the three and half million people employed in businesses with less than a hundred staff.  

 

And as if that's not bad enough, in fact, in true John Howard fashion, the detail of the laws shows that he has in fact abolished unfair dismissal protection for every Australian worker, because in larger businesses with over 100 staff, all that the employer needs to do is say "look, your sacked and I'm sacking you for operational reasons", and that's it, and you'll have no comeback and no right of appeal. 

 

JEAN KENNEDY: But the Federal Minister for Employment and Workplace Relations, Kevin Andrews, says workers who've been dismissed for operational reasons, do have the right to appeal through the Industrial Relations Commission. 

 

KEVIN ANDREWS: And the court will determine whether or not there was an appropriate reason. If, for example, it's a job that no longer exists, but the work that the person was employed to do has finished, well then that would be possibly an operational reason. But it's not a catch all that just allows employers to dismiss anyone.  

 

JEAN KENNEDY: Unions say that it's highly unfair that workers have to go through the trauma and stress of fighting for their jobs, but Kevin Andrews argues that in the past the commission has mostly ruled in favour of the employee. 

 

KEVIN ANDREWS: This is a balance, and the way in which we've sought to resolve the balance is to say yes, in some circumstance there may not be an ongoing job. But, by the same token, the onus of proof falls on the employer to show that that's the case, and we think that's a fair balance. 

 

MARK COLVIN: The Workplace Relations Minister Kevin Andrews ending Jean Kennedy's report.