There would be very few people who do not know about the new Work Choices legislation introduced by the Federal Government.
Most people would also know that the Labour-controlled States have also challenged the validity, or constitutionality, of the legislation in the High Court of Australia.
That challenge is in the course of being heard and determined, although the Federal Government is, needless to say, confident that its validity will be upheld.
Two most important changes
For small businesses, the two most important changes created by the new legislation are:
1) The decreasing availability of the Award system and, in substitution therefore, the introduction of Australian Workplace Agreement (“AWAs”); and
2) The general removal of claims for unfair dismissal.
The first of those changes obviously has less impact upon those industries in which most employees have not been employed pursuant to an Award.
The second of the changes has a far-reaching effect “across the board”. The removal of the right to claim for unfair dismissal applies to businesses that employ less than 100 people, and which account for about 85 per cent of the workforce.
The new legislation not only removes the right to claim for unfair dismissal but also the right that previously existed in New South Wales in relation to an unfair contract of employment, being a right conferred by Section 106 of the Industrial Relations Act. That Section was a well used one, in terms of disgruntled and often relatively senior employees wishing to make a claim against a former employer.
Unfair dismissal claims
The new legislation does, however, still include some grounds for a claim for unfair dismissal:
Discrimination on the ground of family responsibilities;
Pregnancy;
Race and gender; and
Union membership and political affiliations.
However, the new legislation inevitably is going to lead to a significant reduction in the number of unfair dismissal claims.
In turn it will likely lead to an increase in the number of claims against corporate employers pursuant to the Trade Practices Act (Commonwealth legislation) and under State legislation such as, in New South Wales, the Contracts Review Act.
