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Wednesday, 13 February 2002
Page: 47

Mr ABBOTT (Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service) (9:32 AM) —I move:

That this bill be now read a second time.

This bill proposes to amend the Workplace Relations Act 1996 to protect small businesses from the costs and administrative burden of unfair dismissal claims and thereby to increase employment opportunities in the small business sector.

This protection will be provided by exempting small businesses from the unfair dismissal provisions in the act and by requiring the Australian Industrial Relations Commission to order that an unfair dismissal application is not valid if it relates to a small business employer.

The Workplace Relations Act has made the federal workplace relations system more accessible and responsive to the needs of small business. However, further reform is needed to maximise its benefits. Dismissal laws have an important role in providing a safety net for employees but they need to be made fairer for both employers and employees and should be improved where they still prevent jobs being created.

This is certainly the case with the current unfair dismissal provisions which continue to deter many small businesses from employing more staff.

The coalition will continue its generation of strong and sustained jobs growth through sound economic policies, sound fiscal management, and workplace relations reforms to help small business. It is vital to maximize the opportunities for growth and innovation for the 1 million private sector, non-agricultural, small businesses in Australia. These businesses account for 96 per cent of all businesses, and our workplace relations system must be more responsive to their needs. This bill is an important step along that path.

What is good for Australian small businesses is good for Australian jobs. Small business is the engine room for jobs growth in the Australian economy. And the government believes that it is in the public interest to open the door to the new jobs that can be created by small business by easing the pressure that excessive workplace regulation puts on Australia's hard working small businessmen and women. If one in 20 small business employers in Australia took on an additional employee because of a changed legislative framework for unfair dismissal, then an extra 53,000 jobs would result.

Exemption from current unfair dismissal provisions

For the purposes of the small business exemption, a small business is a business with fewer than 20 employees. The proposal would not affect existing employees and would not exclude new employees from making claims for unlawful dismissal, for example, dismissal for discriminatory reasons. Trainees and apprentices would also be unaffected.

The same exemption was contained in a bill which was introduced in 2001 but not considered by parliament before the election. The coalition pledged in its election policies to exempt small businesses from unfair dismissal laws when employing new employees. The relevant section from our small business election policy stated:

A re-elected Coalition Government will pursue a full exemption from Unfair Dismissal claims for small business employers. The Coalition has introduced legislation into the Parliament to secure a full exemption for all small businesses with less than 20 employees from unfair dismissal claims when employing new staff. (Getting on with Business, p.21)

The government has an undeniable duty to pursue the mandate it received on 10 November 2001, including this explicit commitment in its small business election policy. This commitment directly addresses the views of the many small businesses who, when surveyed, have indicated that they would be more likely to recruit new employees if they were exempted from current unfair dismissal laws.

Invalid applications by excluded small business employees

The bill contains an essential complement to the proposed small business unfair dismissal exclusion in the form of a simple and appropriate means for dealing with invalid applications by excluded small business employees.

Under current arrangements, once an unfair dismissal claim is lodged, the commission has no power to reject it without holding at least one hearing which the employer or the employer's representative is required to attend.

The bill would require the commission to order that an unfair dismissal application is invalid if it is satisfied that the application is outside its jurisdiction because of the small business exemption.

The commission would have the power to make such an order without holding a hearing. If it needed more information to satisfy itself, the commission would be able to seek further particulars from an applicant or a response from the small employer in writing, rather than having the parties appear in person.

The objective is to free small business employers from the unnecessary and often costly burden of having to attend or secure representation at commission hearings to defend unfair dismissal applications which can clearly be determined, on the basis of documents provided to the commission, to be outside its jurisdiction because of the small business exemption.


In introducing this bill, the government is continuing to demonstrate its commitment to addressing the special needs and circumstances of the small business sector. The bill will assist in creating more small business jobs and in reducing workplace relations red tape for this vital sector of the Australian economy.

I commend the bill and present the explanatory memorandum.

Debate (on motion by Mr McClelland) adjourned.