Labor makes a big claim in its industrial relations policy: it says it will remove “go away” money from the unfair dismissal system. Not diminish. Not reduce. Remove.
How might this happen? If elected, Labor promises to reduce the costs associated with dealing with unfair dismissal claims by capping compensation payments, removing lawyers from the process, encouraging easy mediation and implementing its Fair Dismissal Code.
True, introducing these measures could well reduce costs for employers and thereby reduce the incentive for them to hand over some cash to get a vexatious unfair dismissal claimant out of the way.
But it is hard to see how go away money will be done away with entirely. Even without lawyers, mediation will take up time and distract SME owners away from the core functions of their business.
Richard Calver, legal counsel with the Master Builders Association, illustrates the point: “For a small builder, to be called offsite for a day they will obviously lose money for that work. Then they have to travel and give advice about how to deal with the issue. By the time you add it up it could cost them a couple of thousand, sso why wouldn’t’ they pay go-away money?”
Asked whether he believes Labor’s promise to remove unfair dismissal was realistic, the Opposition small business spokesman, Craig Emerson, would only say that “it’s a commitment and we will do it; we will have a simple process as outlined in the policy.” Emerson declined to elaborate further.
Unsurprisingly, several business groups do not feel Labor has adequately addressed their questions on the issue of go away money.
The MBA’s Calver says he has written to Labor with some simple questions. “The issue for how Labor proposes that employers will avoid paying going away money. That’s really unclear at the moment and that’s our biggest concern.”
The chief executive of the Council of Small Business of Australia, Tony Steven, is another with questions on the issue. “We’d like to see go away money removed but we don’t know how it will happen, if there is going to be unfair dismissal, business will have to afford the costs that go with a claim, and that means some businesses will choose to make a payment.”
There are plenty of questions – where is Labor’s answer?
Smart Company is a sister publication to The Mandarin, catering to Australia’s entrepreneurs, small and medium business owners and business managers.
