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Unfair dismissal laws cost $1.3 billion each year: new research.

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Media Release


Unfair Dismissal Laws Cost $1.3 Billion Each Year: New Research

Research released today by the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne has quantified for the first time the significant costs imposed on small to medium business by unfair dismissal laws.

The research, commissioned by the Department of Employment and Workplace Relations, shows that State and Federal unfair dismissal laws cost small and medium businesses $1.3 billion each year.

The research also shows that dismissal laws have had a significant impact on jobs. These laws have contributed to the loss of about 77 000 jobs from businesses which used to employ staff and now no longer employ anyone (about 60,000 of these from small businesses with less than 20 employees).

The figures do not take into account jobs that have been lost by businesses which have reduced their workforce due to the laws, but still have employees. Nor do they include jobs which would have been created if there were no unfair dismissal laws.

The survey also shows that businesses are now less inclined to hire young people, the long-term unemployed, and those with lower levels of education because of these laws. Businesses now rely more on casuals and others on fixed term contracts or longer probationary periods.

The research further highlights the need to exempt small businesses from the unfair dismissal laws.

The Coalition has attempted to pass a small business exemption into law since it first came into office. The ALP has consistently refused to acknowledge the need for these laws, voting against unfair dismissal reforms 22 times. This research clearly shows that both small businesses, and marginalised workers, have suffered as a result.

The research analyses specific questions on unfair dismissal laws included in the July 2002 Yellow Pages Business Index Survey. The survey asks attitudinal questions of about 1800 small to medium businesses.

A copy of the full report is available at


For further information contact:

Simone Holzapfel  0417 656 668 29/10/2002