Observation (CEACR) - adopted 2014, published 104th ILC session (2015)

Termination of Employment Convention, 1982 (No. 158) - Australia (Ratification: 1993)

Observations from the International Organisation of Employers (IOE). The Committee notes the communication of August 2014 whereby the International Organisation of Employers (IOE) included Australia in its observations concerning the application of the Convention.

Article 2(2)(b) of the Convention. Workers serving a qualifying period of employment. In its observations received in September 2014, the Australian Council of Trade Unions (ACTU) reiterates that it has serious concerns about the continuing existence of different rules for small business employees. For instance, the 12-month qualifying period for employees in businesses with less than 15 employees to make an unfair dismissal claim excludes a substantial number of employees from unfair dismissal protection. The Government indicates in its report that the unfair dismissal laws under the Fair Work Act, including the minimum qualifying period, are intended to balance the rights of employees to be protected from unfair dismissal with the need for employers, in particular small business, to fairly and efficiently manage their workforce. Moreover, the provisions in the Fair Work Act concerning the transfer of business provide protections for employees in the event of a transfer of business between two entities. Only in the circumstance where the two businesses are not associated entities, the Fair Work Act provides that the second business may elect not to recognise service with the previous employer for determining the qualifying period for unfair dismissal protections. For the purposes of the unfair dismissal qualifying period, the new employer must give notice in writing that previous service will not be recognized, prior to the employee starting work with the new employer. All employees retain access to the general protections provisions. The Committee invites the Government to provide updated information on the issue raised by the ACTU, including available data on the effect of the qualifying period on small businesses and their workers.

Article 2(3). Adequate safeguards. The ACTU indicates that it is gravely concerned about the use of precarious forms of employment in Australia as a means of avoiding the protection resulting from the Convention. While the Fair Work Act prohibits “sham contracting” (understood as the misrepresentation of a person in an employment relationship as an independent contractor), the absence of a clear legislative test for determining the existence of an employment relationship enables businesses to use independent contracting to mask genuine employment relationships. The ACTU adds that the absence of any general limitations on the circumstances in which short-term contracts are used in Australia enables employers to rely on a series of rolling contracts in lieu of permanent employment arrangements in order to minimise the operation of unfair dismissal laws. The Committee invites the Government to provide information on the safeguards against abusive recourse to contracts of employment for a specified period of time, the aim of which is to avoid the protection resulting from this Convention (see in this connection Paragraph 3 of the Termination of Employment Recommendation, 1982 (No. 166)).

Articles 8 and 9. Procedure of appeal against termination. The Committee previously noted the ACTU’s observations indicating that the usual limitation period for civil claims is six years. The ACTU believed that the 60-day limit under the Fair Work Act was too short, as many workers may not be aware of the motive for the dismissal until well after the event. The Committee notes that the Fair Work Amendment Act of 2012 increased the time period for lodgement of unfair dismissal claims from 14 days to 21 days and reduced the time period for lodgement of general protections claims from 60 days to 21 days. The Amendment Act of 2013 reduced the time period for lodgement of unlawful termination applications from 60 days to 21 days. These amendments align the time period for all applications relating to termination of employment. The Government indicates that extensions of time are available in extenuating circumstances, such as in situations in which employees are not aware of the motive for the dismissal until well after the event. In its observations received in September 2014, the ACTU welcomes the increase in the timeframe for lodging unfair dismissal applications from 14 to 21 days but maintains that 21 days is too short. The ACTU adds that extensions of time are only available in exceptional circumstances and the decision to grant an extension is a discretionary one. The ACTU observes that there have been a significant number of cases in which applicants that have failed to lodge an application in time for legitimate reasons (such as ill health or stress related to the dismissal) have been unable to obtain an extension. For these reasons the ACTU believes that the time limit should be abolished, or at least should run from the date on which the worker became aware that he/she might have a valid claim. The Committee invites the Government to provide its comments in this respect, including information on cases in which extensions of time have been requested and on their results.

Article 11. Serious misconduct. The Committee previously noted that the ACTU expressed concern that the Small Business Fair Dismissal Code does not guarantee that employees in small businesses are treated fairly. For example, the Code suggests that an employer may summarily dismiss an employee if he or she believes that the employee has engaged in a single act of theft, fraud or violence. The Government explains that the Fair Work Commission customarily finds that the absence of an investigation leads to a conclusion that a dismissal was not made on reasonable grounds. The ACTU indicates that the Fair Work Commission does not have to make a finding, on the evidence, whether the conduct occurred. Nor does the Commission need to be satisfied the employer had a reasonable belief that the conduct of the employee was serious enough to warrant summary dismissal. The ACTU believes that the Small Business Fair Dismissal Code should be abolished. It adds that all employees should be entitled to protection against unfair dismissal, regardless of the size of the business in which they work. Employees of small businesses ought not to have inferior rights to procedural and substantive fairness or access to a process to remedy such as unfairness, merely because they are employed in a small business. The Committee invites the Government to continue providing information on the issue raised by the ACTU, by including examples of Fair Work Commission rulings applying the Small Business Fair Dismissal Code in cases where summary dismissal was granted or not.

The Committee is raising other matters in a request addressed directly to the Government.