She said the number of claims in the 12 months to June this year was 10,751. This is significantly up from 2008-2009 where a total of 7,994 claims were made.
If you like talking in terms of percentages, this is a 35% increase in claims.
Significantly, she also said that “83% of claims” were resolved through conciliation. She used this as evidence that the new system was “working”.
I am seeing clients weekly who are becoming more concerned about the effects of the new laws and the ease of making an unfair dismissal claim. For them, the figure of “83% of claims” is evidence that the system is “not working”.
They are hearing stories of businesses paying “go away” money to make these claims go away – regardless of the validity of the claim.
Now, there has to be some protection for employees against unfair dismissal – I don’t think anyone will argue with me on that. Laws of the type we have now work better in the corporate environment, and largely that is where their designed for use (I will not argue whether they “work” in the corporate environment – that is another issue). In smaller businesses however, a different set of circumstances are at work.
First, SME’s normally do not have access to HR Teams or the systems in place to manage problem situations. Normally they are handled from gut instinct or based on a small amount of experience. Often that experience is under previous industrial relations regimes and not necessarily relevant to the current circumstances.
Second - Without having the systems in place, the business owner and the employee are often directly affected by the complexity of the new laws. The majority of small business owners I have spoken to have never heard of the “Fair Dismissal Code for Small Businesses” and have very little idea about the steps they need to take to protect their business – and themselves.
I regularly receive calls from businesses that are having problems with employees. Because they do not have formal processes in place, they are concerned that their actions may result in a complaint or claim against them. The regularity of these calls is increasing. Another example of this is the increasing number of businesses approaching People Smartz to request assistance with putting in place systems to protect their business – this has increased by 22% since this time last year!
For the first time ever, we are also receiving calls from employees – asking how they go about making a claim! Over the last month, we have received 12 such calls with another 5 queries through our website. All except one have revolved around perceived unfair treatment in the workplace or underpaid entitlements.
While this is good for our business, the fact is that small to medium sized businesses need education, a concentration on developing fair and equitable systems and assistance with developing productive and efficient workforces. They do not need increased complexity, aggressive regulation and regulatory systems that encourage claims regardless of their validity.
However, this is the regime that we have. The Work Choices legislation has resulted in a polarization of the debate about the industrial relations system and we are unlikely to see a constructive debate about the system for awhile yet. As a result, businesses need to work to develop the needed systems and infrastructure to ensure they are compliant.
People Smartz is ready to assist small to medium sized businesses to ensure they are compliant and protected. We offer a number of services designed to review and inform businesses of the areas of risk in regards to the new legislation. Why not start by booking your Human Resources Review of Your Business today!
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