Small business owners must take it on themselves to be educated on legal decisions and any changes in industrial relations or risk breaking laws which could result in huge fines or even more drastic ramifications, a legal expert has warned.
The warning comes in light of a new unfair dismissal case in which an employee successfully challenged a company – partly because it wasn’t up to speed with how the new industrial relations laws worked.
Direct mail company GP Network was found to have unfairly dismissed employee Marie Axmann, partly due to the fact it believed casual employees could be treated differently under Fair Work laws.
The Commissioner found the company was under the “erroneous belief” that a casual employee with less than 12 months’ service “does not have a remedy for unfair dismissal” and could be dismissed on the basis of the employer’s whim.
This is not true. Casual employees are protected from unfair dismissal if they are shown to have engaged in “regular and systemic employment”.
The protections trigger after six months for a large business, and a year for small businesses. GP Network was deemed a “large business”.
TressCox Lawyers partner Nick Duggal told SmartCompany while the notion of keeping up with new decisions and laws is difficult, the alternative is worse.
“I can appreciate this is a heavy burden for small businesses,” he says, “but if they don’t have someone who can help them either internally or externally they run a risk.
“There needs to be some point of contact in the business … and in the absence of that relationship I’m not sure there’s any minimum time by which you can choose to ignore ongoing developments.”
The nature of Fair Work being a new system means decisions are constantly being made which affect how employers do their job, Duggal says.
“For example, decisions about what constitutes systemic and regular hours in casual work. You have to keep a pretty constant eye out on this stuff.
“I think there does need to be an HR individual within a company who has an eye out for any developments in legislative changes, or you need to have an ongoing relationship with an external legal or HR firm with that expertise.”
The Commission also found Axmann hadn’t engaged in serious enough conduct to warrant dismissal, and in fact, these issues were “almost trivial”.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
