COVID-19 unfair dismissals spike was avoidable, Kate Carnell says

The spike in unfair dismissal applications following COVID-19 could have been mitigated if recommended changes to the Small Business Fair Dismissal Code were implemented sooner, says Australian small business and family enterprise ombudsman Kate Carnell.

In the 2019-20 financial year, the Australian Fair Work Commission received some 16,500 unfair dismissal claims, compared to 13,900 the previous year.

Between March and June 2020, as the COVID-19 crisis worsened in Australia, unfair dismissal cases were up 40% compared to the same time in 2019.

But, Carnell tells SmartCompany if ASBFEO’s changes had been implemented before the pandemic hit Australia, things could have looked very different.

In August last year, ASBFEO released 15 recommendations to overhaul the Small Business Fair Dismissal Code.

The recommendations focus on clarifying exactly what makes a dismissal fair or unfair, as well as creating checklists for compliance.

They’re not intended to change the basis of workplace law or affect worker rights.

And, while Carnell says the government said it would be putting out a discussion paper and consultation on the changes, nothing has materialised yet, and there’s no timeline on the table.

“The government has looked at it, they think it’s a great paper,” Carnell says.

“They think what we put on the table sounds sensible, they wanted to consult on it. But they haven’t.”

The COVID-19 effect

Carnell accepts that the COVID-19 pandemic has played a role in making this problem worse, and shone a light on the issue.

The increase in applications has been steep. But, even before the pandemic, the number of unfair dismissal cases were on the up.

It stands to reason that with more employers having to cut costs, and therefore cut staff numbers, unfair dismissal cases would see a relative increase too.

But, again, Carnell stresses that the recommendations were intended to make things easier for those employers.

“What we were trying to do … was to make it clearer and easier to follow on what process you have to follow to fairly dismiss,” she says.

“All our recommendations do is clarify the process and make it simpler for businesses to do the right thing.”

And, if those changes had been implemented before the COVID-19 crisis hit, this problem would likely have been mitigated, at least to some extent.

“I absolutely believe that,” Carnell says.

If the process was easy to follow, and businesses could show they had followed it, there would be no claim.

“Assuming businesses followed the guidelines — which hopefully they would have, because I think most businesses try to do the right thing — with a bit of luck there wouldn’t have been so many unfair dismissal claims,” she adds.

“And that would have been better for both parties — for the small business and the employee.”

Ultimately, now Carnell would like the rise in unfair dismissal cases to act as a catalyst for change.

It’s disappointing that nothing is in motion already, she says.

“These changes can be implemented by regulation, they don’t require legislation,” she adds.

“The uptick in numbers shows just how pressing it is to implement these changes.”

IR debacle

All of this follows a series of industrial reform roundtables, intended to find solutions for preventing wage theft and simplifying modern awards and enterprise agreements.

Notably, changes to the Small Business Fair Dismissal Code were not on the agenda.

In September, the roundtables concluded with no agreement between unions and employer groups.

Back in October, Industrial Relations Minister Christian Porter said the federal government would finalise its package of reforms within weeks of the budget on October 6.

But, three weeks on, no details have yet been released.

In light of the COVID-19 pandemic, Carnell has also called for a small business-specific industry award, as an opt-in for businesses trying to avoid some of the existing awards system’s complexity.

Last week, Porter ruled out such an award, instead saying he would strive to simplify conditions, specifically in the hospitality sector.

According to The Guardian, Porter stressed the need to form a package that stands a “realistic” chance of passing parliament.