THE Small Business Fair Dismissal Code "in its current form, is not working in the way it was originally intended,” according to Australian Small Business and Family Enterprise Ombudsman, Kate Carnell.
Ms Carnell, has handed down a comprehensive review of the Small Business Fair Dismissal Code, recommending a suite of changes to help small business employers meet their obligations.
"It is ambiguous and open to interpretation, particularly by lawyers, which means too many small businesses are being pulled into unfair dismissal hearings which are costly and impact productivity," Ms Carnell said.
“The vast majority of small business operators are hard-working Australians with good intentions.
“The recommendations in this review aim to give small business operators clear guidelines to deliver certainty around complying with the code.
“Importantly – the recommended amendments and checklists are designed to guide a small business employer through a fair dismissal process, not to make the dismissal process easier," Ms Carnell said.
“We know that small businesses do not make the decision to end a worker’s employment lightly. Research by the Fair Work Commission found one of the key challenges for small business operators was attracting and retaining good staff and that good employees were highly valued.
“Small businesses can’t afford to engage in costly and stressful legal action. They don’t have the support of a HR department when faced with the difficult decision to end a staff member’s employment," Ms Carnell said.
“That’s why it’s critical for the code to drive fairness, and set out clear expectations for small business employers.
“According to figures released by the Fair Work Commission, during the first three months of this year it received 3,583 unfair dismissal applications.
“Most were settled during mediation, but for the 172 cases that were presented to the Commission, 111 (65%) were dismissed because they were without merit or deemed legally invalid, meaning they should not have gone to the Commission in the first place," she said.
“By taking the ambiguous language out of the Code such as ‘reasonable grounds,’ ‘valid reason,’ and ‘reasonable chance’ and improving the checklist questions, small businesses will be in a much better position to comply.
“We want the Code to work, so that small businesses are doing the right thing and there’s less need to engage lawyers,” Ms Carnell said.
Ms Carnell said the review contains recommendations in three key areas:
- Amendments to ensure the code meets its intended functions and objectives and provides certainty on what is required of small business employers to ensure a dismissal is fair.
- Improving small business education and awareness in relation to the Code and checklists to help them meet their obligations.
- Clarifying the unfair dismissal claims process for small business employers and employees.
The Small Business Fair Dismissal Code was formed as part of a report 'Forward with Fairness: Labor’s plan for fairer and more productive Australian workplaces' in recognition that small business owners do not have the time or expertise to navigate the complex unfair dismissal system. When the code came into effect in 2009 under the Labor Government, the interpretation of the code was challenged in the courts and, on occasion, by members of the Fair Work Commission.
Ms Carnell said that created uncertainty for small business employers, as following the code was no longer a reliable way of ensuring a dismissal was going to be deemed fair.
In April 2018, the Australian Small Business and Family Enterprise Ombudsman released its report 'Workplace Relations- Simplification for Small Business'. That report recommended ASBFEO lead a review of the Small Business Fair Dismissal Code and checklist.
IT IS NOT UNCOMMON in the commercial world, when customers are unexpectedly inconvenienced, for compensation to be offered so it’s time for the Australian Taxation Office (ATO) to recognise the damage caused by technology outages, according to the Institute of Public Accountants (IPA).
“We recognise the fact that the ATO has worked hard to fix system faults that have been a blight on its operations in recent years,” IPA chief executive officer, Andrew Conway said.
“System downtimes such as that experienced last week comes at a huge expense for many of our members and quite simply, a mere apology doesn’t go far enough.
“The Scheme for Detriment caused by Defective Administration (CDDA) is currently under review by the government," he said.
“The existing framework provides little scope for intermediaries such as tax agents to make a claim. It is not fit for purpose, especially in light of accountants facing rising costs from increased regulation and compliance requirements.
“Practitioners who lose productivity time need to be compensated. It is real time and it’s real income that is lost. Time is an accountant’s commodity.
“Tax practitioners have faced loss of income, lost productivity, psychological injury from stress and anxiety and reputational damage from system outages and where the digital journey has not gone smoothly; all matters outside of their control," Mr Conway said.
“Public accountants have to work double time to make up for the time lost caused by the ATO’s system failures, robbing them of family time on weekends and causing them significant stress.
“While we understand that outages are a fact of life, unless the provider is adversely impacted and share the pain, there will not be a change in their approach," he said.
"Consideration should also be given to blanket redress arrangements in the event of a future digital disruption.
"We recognise that it can be difficult to quantify the non-economic losses and the fact that not all intermediaries are equally affected. This should not be a reason for not providing redress,” Mr Conway said.