Ten per cent of all unfair dismissal claims lodged with the Fair Work Commission were yet to be resolved after 94 days, its annual report for 2018–19 reveals, while employment agreements also raise red flags.
In total, the Fair Work Commission (FWC) received 31,415 applications and held 11,702 hearings and conferences. That filtered down to a total of 10,974 decisions and orders being made during the year.
Despite those numbers, the commission continues to have less matters brought to its attention each year, having declined every year since at least 2015–16, when it received almost 3,000 more applications than it did in the most recent financial year.
Unfair dismissals greatest focus
As was the case in previous years, unfair dismissal claims made up almost half (44 per cent) of all applications made to the commission for its intervention, with 13,928 submitted during the financial year.
That number was up slightly from last year’s 13,595, bucking what had been a mild but consistent decline since 2015–16, when 14,694 unfair dismissal applications were made.
The next most common type of application was for agreement approvals, with 4,932 lodged, closely followed by applications for general protections involving dismissal (4,508).
The full breakdown in applications lodged with the commission was:
- Unfair dismissal – 13,928
- Agreement approvals – 4,932
- General protections specifically involving dismissal – 4,508
- Dispute resolution – 1,876
- Right of entry – 1,242
- Other types of general protections – 1,132
- Other types of agreements – 1,060
- Industrial action – 845
- Stop bullying orders – 751
- Bargaining – 389
- Registered organisations – 187
- Appeals – 175
- Other matters – 390
Time frames a concern for employers
While almost 14,000 unfair dismissal claims over the year pales in comparison to the 865,000 employers nationwide, for those caught up in a termination dispute, the process and its resolution time frames can play a significant role in business operations.
It also contrasts with the number of Australians accessing information about the unfair dismissal process, with the commission’s unfair dismissal benchbook being viewed or downloaded 497,219 times over the year.
According to the FWC, 96 per cent of all unfair dismissal claims lodged with it had been resolved over the course of the year. Half of all these cases were resolved within 39 days of an application being submitted.
However, the commission said that one in 10 was still ongoing after a staggering 94 days.
The bulk of these disputes (61 per cent) were resolved during conciliation between the employer and the individual, and a further 14 per cent were resolved after conciliation had taken place but before progressing to an actual hearing.
The figures come amid calls for sweeping reforms to the Small Business Fair Dismissal Code.
How many dismissals were deemed unfair?
Another potentially alarming figure for Australian employers was the proportion of terminations that were actually deemed by the FWC to be “harsh, unjust or unreasonable”.
Specifically for those that went through to a formal judgment, the number of claims in favour of the worker that their termination was unfair was very small.
“Five per cent of unfair dismissal matters were finalised by a decision issued by a member in 2018–19. In those 728 matters, the dismissal was found to be harsh, unjust or unreasonable in 19 per cent of cases (140), compared with 20 per cent in 2017–18,” the report said.
Some 353 unfair dismissal applications were dismissed outright by the commission for reasons not even concerning the employer, such as that the employee had not met the minimum employment period to be covered by unfair dismissal protections (41 of these matters).
Failed employment agreements ‘more than double’
Aside from unfair dismissals, employment agreements have become an increasingly problematic area, with the commission president Justice Iain Ross AO noting in the report that the number of employment agreements failing to meet legal requirements soaring in just three years.
“The volume of agreement applications assessed as non-compliant has more than doubled since 2016. During 2018–19, 66 per cent of agreements approved required undertakings to resolve deficiencies, up from 35 per cent three years earlier,” he said.
“This has contributed to a deterioration in our timeliness performance.”
However, general manager Bernadette O’Neill said in the report that the second half of FY2019 saw the time taken to approve enterprise agreements almost halve, “from a median of 76 days to a median of 35 days”.
Changing services, information for employers and workers
Beyond performance, the annual report noted that a number of changes to Fair Work Commission operations and services have been, or are being, made since 1 July 2018.
Among them are:
- Scrapping of the 4 yearly review of modern awards: “On 12 December 2018, the section of the Fair Work Act covering the 4 yearly review was repealed by the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 (Repeal Act) with effect from 1 January 2018. This means that there will not be any more 4 yearly reviews of modern awards, but the commission will complete the current review.”
- Free legal advice for small business, individuals: The FWC launched a Workplace Advice Service on 30 July 2018 for “eligible employees and small business employers”. In the 11 months since its launch to the end of the financial year, the scheme had provided an estimated 1,000 hours of free legal advice, through a network of over 60 law firms, legal aid bodies and community legal centres nationally.
- “Plain language” to simplify documents, correspondence: Announced last year as part of a review to improve the efficiency of its operations and information for both employers and workers, the commission said it would review all of its consumer-facing documentation in a bid to have them use “plain language” for easier understanding. This review has so far led to more than 90 template letters sent to both parties that are used in the unfair dismissal process to be redrafted.
- Establishment of Small Business Reference Group: “To enable us to establish whether our improvements are hitting the mark, we have established a Small Business Reference Group, which includes representatives of the small business community, including government, advisers to small business, and industrial associations with small business membership,” the FWC report said.
“This group serves as an ongoing contact point between the commission, small businesses and those who represent them, so that we can hear about the challenges facing small business and what we can do to further improve our services.”
- Use of behavioural insights: The commission also said it has begun drawing on behavioural insights — reliant on psychology, behavioural science and behavioural economics — to better understand human reactions and responses, in a bid to better understand worker and employer decision-making processes and influences.
“BI has the potential to improve the services we provide the community by helping parties to make informed, timely decisions about their case, particularly where employers and employees are self-represented,” it said.
“We are using BI to improve compliance and timeliness of unfair dismissal applications and to increase compliant enterprise agreement applications.”
The Fair Work Commission’s full annual report for the 2018–19 financial year, and those for previous years, can be found on its website.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.