Unfair dismissals rise by 2.5% as businesses look to settle claims

The number of unfair dismissal applications made under Fair Work Australia has only increased by 2.6% during the second half of 2011 according to new figures, although a legal expert warns the numbers suggest businesses would rather pay out employees than face an unfair dismissal case.

The figures show the number of applications made increased from 3,417 in the first quarter to 3,505 in the December quarter, while the settlement rate of applications at conciliation has remained at 80% through the second half. The settlement figure has stayed roughly the same since 2010.

For finalised matters, 512 were finalised prior to conciliation, while 2,123 were settled at conciliation. Only 522 were settled outside of conciliation, but the majority of those were finalised before a formal proceeding.

A further 10 applications were withdrawn after a hearing, and before the decision, while 125 cases were decided by a formal Fair Work decision.

There were 521 applications relating to small business employers. The Government’s Small Business Dismissal checklist, which was designed to help businesses falling foul of unfair dismissal claims, appears to have had little impact – there were no applications that were dismissed because the business had been shown to follow the code.

Only two claims were dismissed due to there being a legitimate case of redundancy, and there were only 27 applications where the dismissal was found to be unfair.

Legal expert Peter Vitale says these figures suggest the majority of employers are willing to settle before coming to a hearing.

“These numbers seem to suggest to me there are still too many claims which employers would rather pay out, rather than fight about,” he says.

However, some of the numbers were encouraging, especially the fact the number of applications rose by only 78 over the quarter.

“There was no significant increase in the second half of the year. It’s risen a little over the whole year, but you would have to say that the number of general protection claims has risen by roughly the same amount.”