There has been a lot of media coverage about the Howard Government’s changes to unfair dismissal laws. Unfair dismissal remedies are no longer available to employees terminated by a "constitutional corporation" with less than 100 employees. And even if an employee is terminated by a constitutional corporation with more than 100 employees, they are precluded from making an unfair dismissal claim in the first six months of employment, which is known as the qualifying period.
But does Work Choices mean the end of the probationary period?
If employers with less than 100 employees are able to terminate employees unfairly at any time and larger employers are able to in the qualifying period, is there any need to specifically provide for a probationary period of up to three months in workplace agreements? The answer may be yes for your business!
There is an important difference between "probationary employees" and "qualifying employees". Qualifying employees, whilst disqualified from unfair dismissal remedies, still have recourse to the Australian Industrial Relations Commission (AIRC) for unlawful termination on the basis of being given inadequate or no notice of termination of their employment. Probationary employees do not. While qualifying employees or employees of a company with less than 100 employees must be given the statutory notice of termination, employees subject to a probationary period do not. If an employer wants the flexibility of being able to summarily dismiss an employee in the first three months of employment, a clause providing for a probationary period should be included in workplace agreements.
Akin to the Australian Fair Pay and Conditions Standard (AFPCS), Part 12 of the Workplace Relations Act 1996 (WRA) sets out minimum entitlements for employees in relation to notice periods or payment in lieu for termination based on the particular employee’s continuous service with the employer. For example, an employee with one year’s service is entitled to one week’s notice of termination, whereas an employee with one to three year’s service is entitled to two weeks and so on. It is essential that employers bear in mind these minimum notice entitlements when drafting employment contracts or workplace agreements to ensure the minimum standard is met. Inclusion of less favourable terms in employment documents practically guarantees the employer’s liability for unlawful termination, even where the notice procedure under the contract or agreement is complied with.
Meanwhile, all employees covered by Work Choices, no matter how large or small the employer, have recourse to the AIRC for unlawful termination where the grounds for termination are based on discrimination, temporary absence due to illness, injury or carrying out voluntary emergency service activities, trade union membership, absence on parental leave.
Further important addendum to our previous newsletter
Employers now have an additional six months in which to ensure their record keeping procedures comply with Work Choices, which were due to commence on 27 September 2006. A recent amendment to the Workplace Relations Regulations 2006 (Cth) has extended the transitional period in which employers have to comply, thereby giving employers leeway to "tidy up" their internal employment systems. From 27 March 2007 employers will be liable for breaches of the civil record-keeping provisions."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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