Communist Party of Australia

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Issue #1609      September 4, 2013


“Oh what a feeling!”

The Toyota advertisement with people leaping for joy in the air, came back to haunt the company last year when it called its workers together to tell them they were being sacked. Toyota was shutting its Melbourne plant and the workers were on the scrap heap. Retrenched workers camped outside the plant, put up a placard with the haunting message, “Oh what a feeling!”, written in large bold and red letters. It was a terrible feeling. Like any sacking, the workers who lose their jobs are gutted. They have families to support, rent or mortgages to pay, maybe a debt on their car, and a host of other expenses to meet. The sudden loss of income without a commensurate reduction in commitments can prove catastrophic.

There are a host of employer organisations, legal firms and other outfits that advise employers on the “best” way to sack employees. “You are dealing with psychological grieving and so you need to offer assistance to help people vent,” advises Peter Wilson. Wilson is from the Australian Human Resources Institute. Don’t do it too close to Christmas, he suggests. “One of the worst things an employer ever has to do is to take someone’s job away, particularly in this age when work is so integral to people’s life and identity.” (“How to deliver the bad news better”, Patrick Durkin, Financial Review, 28-08-2013)

This advice, however, is not based on sympathy for sacked workers or humanitarian grounds. Its aim is to avoid repercussions that might cost the company extra dollars or cause delays in sacking workers!

“If you fail to properly consult and there is an obligation under your enterprise agreement or award – and generally there is now – then the unions can come in and seek injunctions which would stop you activating redundancies unless you meet certain conditions,” warns Kirsty Faichen, a partner at the pro-Liberal, pro-employer legal firm Herbert Smith Freehills. (FR, 28-08-2013) Not only that, a disgruntled employee might go to the Fair Work Commission with an unfair dismissal claim. It is also important, according to Faichen to manage your reputation, especially a large redundancy. It certainly did not enhance Toyota’s reputation.

The unfair dismissal provisions of the Fair Work Act and other requirements in awards and EBAs, such as to consult first with the workforce and the trade union, are bothering employers. Under the Howard government’s WorkChoices, only one in three unfair dismissal claims were successful. But the new Fair Work Act has seen an increase to more than half of all claims by sacked workers succeeding. In the last six months over 6,000 claims of unfair dismissal were lodged with the Fair Work Commission. Around 80 percent of these were resolved by conciliation.

Very few workers are reinstated, but most settlements include payments. These payments on average are relatively small – more than half of them under $4,000 and only 0.5 percent over $40,000. The real cost to employers is in defending actions in the Commission. The Act, despite its considerable weaknesses, does make it more difficult to arbitrarily sack workers. Companies must jump through a few hoops and “deliver the bad news better” to avoid workers going to the Fair Work Commission.

The light at the end of the tunnel for the likes of Faichen and Wilson and employers large and small is that the Coalition, if elected, will make it easier to arbitrarily sack workers and not risk subsequent action. The Coalition is likely to exempt small employers completely from unfair dismissal provisions and remove provisions from awards and EBAs such as the requirement to give advance notice or to consult with workers and trade unions first. Good news for bosses.

But the other side of the coin is that the Coalition will leave workers with even less protection and entitlements than they have now. Women, in particular, will be more vulnerable to sexual harassment. It will be more difficult for employees to refuse to do unpaid overtime. It will become easier for companies to sack workers who are union activists, require sick leave, are injured or pregnant. When workers say “Oh what a feeling!” under a Coalition government, they will not be leaping in the air for joy.

Next article – Statement by Communist and Workers’ Parties

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