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ALP hypocritical on unfair dismissal.

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Chair of the Senate Standing Committee on

Employment, Workplace Relations, Small Business and Education


16 February 1999




In the Senate today, Chair of the Senate Legislation Co mmittee on Employment, Workplace Relations, Small Business and Education, Senator John Tierney called the ALP hypocritical for moving to disallow the Government’s Workplace Relations Amendment Regulations (Nos 2 and 3).


Senator Tierney said, “the Keating Government used its regulation powers to exclude categories of employees from unfair dismissal laws on some five occasions between 1994 and 1996, now they have the hide to take issue with us introducing unfair dismissal regulations.


“During the Committee inquiry on unfair dismissal we heard a lot of evidence about why this regulation shouldn’t be disallowed — one of the main ones being that it will create jobs.


“The Australian Chamber of Commerce and Industry (ACCI) survey shows that 53.9% of businesses who employ between one and 19 people have employed less people because of unfair dismissal.


“The ACCI told the Committee that this suggests up to 200,000 jobs would be created under the Government legislation.


“The Opposition has tried to discredit these survey findings but this is just one of many surveys that have found small businesses are scared to hire because of the current unfair dismissal laws.


“Jobs would be created by allowing these regulations to stand and yet the Opposition and Democrats want to vote it down. The ALP and Democrats are denying unemployed people jobs.


“ACCI also rejected a constant claim by Democrat Industrial Relations Spokesperson, Senator Andrew Murray that a fall in the number of unfair dismissal applications means that unfair dismissal legislation no longer effects job creation. ACCI chief executive, Mark Paterson said in yesterday’s Herald Sun, “the number of applications is an inappropriate means of estimating the effect of the legislation. These results show employers are unwilling to hire to avoid even the possibility of such an application being filed.


“The Committee heard time and time again during its inquiry that small business would not take the risk of hiring until the unfair dismissal laws are changed.


“The current laws are heavily biased against small business. Australian Business, a witness before the Committee, told us that a large number of small business employers would pay a claim, regardless of its merits, in order to avoid the legal and other costs of running an unfair dismissal claim defence. These costs could be enough to make that year unprofitable or even destroy a small business”.


An Australian Business witness said, “I’d estimate that at least three quarters are settled without regard to questions of merit, of relative strength. They were settled on the basis that — and it’s good commercial, pragmatic advice, - it’s going to cost you X dollars and you can get out of it for a figure somewhat less than X if you settle. Colloquially it’s known as ‘Piss Off money.


“You get an awful lot of applicants who will try it on in the sure and certain knowledge that they will obtain something and that’s a reflection of the system which is distortionary”.


Senator Tiemey said, “they explained that 0.25% of successful employers obtain costs against unsuccessful applicants. So even if small business operators win, they lose.


“It seems sensible then for small businesses to consider settling rather than going through arbitration — even if they are in the right. Small business operators other option is to not employ at all and take the risk of facing an unfair dismissal claim.


“We know small business is the engine room of employment growth — but in the Senate today the Democrats and ALP opposed a regulation that will create up to 200,000 small business jobs.”


For further information or interview contact Kristen Connell, media and research officer at Parliament House Canberra (02) 62773345