Analysis of Employment Relation Law - Case Study Example

The Case: Employment law is a huge area of law that is so important to understand for all parties concerned. Laws relating to employment are usually inordinately complex given the fact that most of these laws are derived from innumerable sources, which are open to change at any given point of time. This was true of the Federal Workplace Relations Act, 1996 and will be true of the proposed piece of legislation that is seeking to replace this act after it was repealed. Traditional common law, ordinary contract law, specific legislation and union binding contracts called awards and enterprise usually govern the many crevices of employment law. Thus many nuances to the laws that govern employment-a small part of them being the nature of the termination contract and the issues and processes that would constitute fair termination and those would not. It is in this regard that a study of the scope of the present statutory exclusion and the appropriateness or otherwise of the relevant legislative provisions – particularly sections 385 and 389 of the Rudd government backed fair Work Act, 2009 becomes both interesting and essential. Globalisation has made a mockery of old standing working relationships, since stress is now on making businesses viable and profitable propositions rather than old machineries that stick to relationships of old traditions. The idea therefore has been that there should be provisions that should justify operational choices that businesses have to make in order to stay viable and generate the best possible returns. There has also been in Australia a certain amount of politics and political pressure application where the choice regarding the protection of the employee are concerned vis-à-vis the right of the employer to ensure business viability by taking decisions that at first seem to be a gross violation of employee rights (Aroop, 2006). There has been an ongoing debate regarding the provisions of laws that have been passed over the years and how correct these laws have been in their attempt at defining incorrect and unfair dismissals. It is in the context of globalization business viability choices versus the need to protect employees from unfair termination that the following case study has been prepared. It seeks to analyse the provisions that explain unfair termination in the Fair Work Act, 2009 and its relevant sections vis-à-vis the old provisions in the now redundant and repealed and yet notorious s643 (8) of the Workplace Relations Act 1996. Introduction: If one has to understand the spirit of argument and the case being put forward in this context it would be useful to put forward first and foremost the set of principles that are considered the usual yardstick for the courts and legislature as the consideration while studying the laws of unfair employee termination. The law of unfair dismissals is being constantly updated and developed by the courts and by amendments to the federal and state legislation (Adams, 2001). The important issues in overview that the law usually seeks to encompass as part of the reasoning for unfair dismissals include: 1. Whether or not a prescribed period of notice was given 2. Valid reason for termination provided 3. The employee was given an opportunity to defend any allegations 4. Show that the termination was not ‘harsh, unjust or in any way unreasonable’. 5. The termination was not automatically unfair 6. An order for reinstatement/compensation or validation of the dismissal was provided Work Place Relations Act, 1996: Previous Laws and relevance: the most relevant piece of legislation that was also to an extent the most notorious and the most controversial was the operational clause of the Workplace Relations Act that in Section 643(8) excludes an application being made by an employee where the reason, or one of the reasons, for the termination was genuine operational reasons. These have been further defined in the consequent sub-section 643(9) as being “reasons of an economic, technological, structural or similar nature” relating to the employer’s business or part of it (Robsinson, 2007). The Act further stated that in order “to be excluded by this provision, the AIRC will have to be satisfied, on the basis of evidence, that the operational reasons themselves genuine, and that the termination was a logical consequence of the implementation of those operational reasons. The availability of alternative employment will therefore be relevant, as will whether a redundancy process has been properly followed”(Termination of Employment, APSC Release). For all intents and purposes, the Act in essence seeks to identify genuine cases of termination that were based on a real need to update and save on operational costs even if that meant that this needed to be done at the cost of the employee. If an employer could thus prove that the reasons for termination were not related to the working ethics or the proficiency in work related matters that the employee displayed, there could still be a reason to terminate him if that meant a betterment of the economic, technological or the structural health of the organization. It was only natural that the clause attract a certain level of dissidence and controversy as it would at first glance seem to be a direct infringement of employee rights. The interpretation that has been provided by the AIRC for the clause over the few years where it was enforced has in turn added to the controversial nature of the matter. The nub of the problem is simple. How does one identify whether or not the reasons that are being put forward by the employee genuine in the operational (structural economic or technological capacity)? The following judgments on the act clarified the position of the state on the matter to a certain extent. In Carter v Village Cinemas, The case of Carter v Village Cinemas Australia Pty Limited [2007] AIRCFB (2007) was the first time a Full Bench of the AIRC had to consider the exclusion. The stated judgment was that the termination of an employee need not necessarily be an inescapable result of, or a reasonable answer to a reason that was operational. The judgment explained that whether or not an employer could have done something other than removing an employee is not an issue in the determination of whether termination was for a genuine operational reason. So long as the actual operational reason being cited is genuine and not a sham it is enough that the reason is one of the reasons for dismissal (Forsyth, 2008). The judgment also put emphasis on the fact that the actual burden of proof lay with the employers if they were to prove that there were genuine operational reasons involved and not with the employee to prove otherwise. The AIRC will be quick to latch onto any evidence that the operational reason is a fabrication aimed at trying to avoid the unfair dismissal legislation. In Andrew Cruickshank v Priceline Pty Ltd, the employee in question was removed from work and Priceline subsequently hired a new employee in the same position on a package of $65,000-$75,000. Priceline claimed, successfully, that they had not breached the unfair dismissal provisions of the Act, as the dismissal saved the business money, therefore was for a reason including a genuine operational reason. Since Work choices commenced, it has become clear that employers are seeking to protect themselves when responding to unfair dismissal claims, on the basis of the defence of "operational reasons". Two decisions that were made by the Australian Industrial Relations Commission ("AIRC") in Perry v Savills (Victoria) Pty Ltd PR 973103 (20 June 2006) and Prociv and Ors v Bilfinger Berger Services (Australia) Pty Ltd PR 973542 (14 August 2006) stand in clarification of the defence. After the judgments were given, it became mandatory for the employer to prove that: 1. Operational reasons have not been manufactured and that they are genuine in every way possible and 2. The "operational reasons" must logically require the termination of the employee's employment. Fair Work Act: This would now bring us to the proposed jurisdiction of the Fair Work Act, 2009. The primary focus of the Act is in ensuring that the workers and the employees get a fair measure of the rights due to them and that there is no scope on part of the employer to cite incorrect reasons for their dismissal, ensuring that there is a certain level of protection against arbitrary treatment that is afforded to the employee vis-à-vis the powers of the employer. In this regard one needs to first analyse the very definition of the term dismissal as has been put forward by the Fair Work Act, 2009. A dismissal is where an employer terminates the employment of his or her employee. Dismissal can also be at the employee's initiative, known as Constructive Dismissal. Constructive dismissal occurs where an employee has been forced to resign from employment because of conduct engaged in by the employer, such as harassment. According to the Act, a person has not actually been dismissed if it can be proven that the employment that they had was under the force of a contract of employment. This however needs to be operational for a certain period of time, for specified tasks, or for the duration of a specified season, and employment was terminated at the end of the period, task or season. The dismissal is also considered void in case a training agreement was applicable to the one being employed and the employment that they had under this was for a particular interlude of time or restricted to the period of the preparation agreement and their employment was terminated at the end of the training arrangement. Finally, a person is not considered dismissed in cases where, the person was made to undergo a demotion without a significant reduction in pay or duties and they remained with the same employer (Section 386). The act also deals with the provisions that would constitute cases of fair dismissals. The crux of the unfair dismissals is in cases where the court is satisfied that 1. there has in fact a dismissal that has taken place 2. The dismissal was proven to be callous or unfair 3. The dismissal was not a case of Great Redundancy 4. the dismissal was not consistent with the Small Business. Dismissal Code (only where the employer is a small business employer) (Section 385). There are a few basic factors that the Act places under consideration while making a case for unfair dismissals. These need to in essence justify that the dismissal was harsh and unjust in their nature and implementation. Primarily, there needs to be a genuine reason present of the dismissal of an employee. This in turn needs to satisfy the conditions of a problem in relation to the person’s capacity or conduct. This is inclusive of the manner of relation that he has with employees and its related safety and fairness of conduct. The person being terminated needs to be notified of the reason and be given a chance to respond to that reason. There should not be an unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to the dismissal. The size of the employer’s business is placed under consideration at the time of dismissal and in case this has been one of the predominant reasons, then the reason stands justified. Finally in case there has been an absence of a proper process of human resource management and the presence of HRM professionals in the organization of the employer from which the employee is being removed, would in most cases have a result on the bearing of the case itself. The exact nuances of the Fair Work Act, 2009 stand in the reflection of these general principles. The Act removes the exception for employers whose workforce is 100 or less that was included in the Workplace Act. The Fair Work Act also is also requisite of a consultation with employees in cases where decisions are made for the removal of a number equal to or higher than 15 for solely technological reasons. (Relevant Work Place Act articles 660, 668-671). The Act has potentially wide application given the fact that even if a high income employee is exempt from the application of a modern award, the person may still be entitled to protection from unfair dismissal because he or she continues to be covered (S 48(1)) by the relevant modern award even though it no longer applies. A dismissal is unfair if it is harsh, unjust or unreasonable in the same way that it has been defined in the Workplace Relations Act, s 387. However, a dismissal would not be considered unfair or unjust in case the employer complies with the Small Business Fair Dismissal Code when the employee in question is being terminated. The Act also states that a dismissal is not unfair if there is genuine redundancy-s385. However the employer must comply with any consultation obligations in an applicable award or enterprise agreement and there must be no reasonable opportunity for the employee to be redeployed. This is where the Act stands in direct confrontation with s463(8) of the Workplace Relations Act, 1996. The act provides that there are grounds for removal in case the job or the organization in question has for all genuine intents and purposes outgrown the skills and services that are provided by the employee in question. This according to the act provides genuine grounds for termnination as an employee who is no longer capable enough in offering his services to the organization or is incapable of actual growth support would become a liability the act states that the termination of employment is not unfair in case of proven redundancy. Redundancy in fact is a lot easier to prove or disapprove than the provisions of operational causes that were cited in the Work Place Relations Act, 1996. Further, the Act provides more protection to the employee by providing the clause that even in cases of redundancy, functions of consultation must be fulfilled and awards if any need to be honored. The act therefore confirms rather than refutes the stated purposes of the Work Place Relations Act, only tis one tries to place the concerns of the employees in a better light and attempts at placing the need for employee protection in the manner of law constitution and construction. Conclusion: In conclusion, therefore it maybe reiterated that there are concerns about the New Fair Work Act as well as there are about any new given piece of legislation in a world that is fast becoming opinionated and well-informed. The only good thing that is to be said about all of the political push and pull that have gone behind the construction of the Rudd backed Fir Work Act is that the Act for all intents and purposes and maybe under the pressure from the labor organization lobbyists seeks to protect the rights and the workplace job safety clauses for a set of workers that would have no rights against unfair termination in the absence of a proper piece of legislation ensuring the same. Reference: Forsyth A, 2008, Australian Deregulation of Economic Dismissals, pub, Sydney Law Review, Vol. 30, pp 506-536 Adams M, 2001, Australian Essential Management Law, pub, Rutledge Cavendish, pp63-70 Arup C, 2006, Labor Law and Labor Market Regulation: Essays on the Construction, pub, The Federation Press, pp665-667 Termination of Employment, APSC Release, accessed September 9, 2009, < http://www.apsc.gov.au/publications02/terminations.htm> Fair Work Act, accessed September 9, 2009, < http://www.tpdlaw.com.au/assets/articles/Fair_Work_Act_2009_Article_4.pdf> Robinson A, Workplace Relations, accessed September 9, 2009, < http://www.aar.com.au/pubs/wr/fowrjun07.htm> Fair Work Act, 2009, accessed September 9, 2009, < http://www.fwa.gov.au/index.cfm?pagename=legislationfwroact> Read More