12 April 2012
Nichola Constant, Director and Dimi Baramili, Graduate Associate
Recent figures released by Fair Work Australia indicate that since the introduction of the Fair Work Act 2009 (Cth) unfair dismissal claims and other claims relating to dismissals have been steadily increasing.
In the past twelve months, the number of claims has grown by approximately 100 claims each quarter, bringing the total number of unfair dismissal claims in the October- December quarter 2011 to 3505.
Adverse action (or “general protection”) claims account for around 15% of total dismissal claims, with rapid growth in the past year. These claims have become an attractive alternative to the unfair dismissal regime for employees wishing to take action in respect of the termination of their employment. The adverse action jurisdiction prevents an employer from taking adverse action against an employee in response to their exercise of a workplace right, engagement in industrial activities, or on the basis of discrimination. Adverse action can take a number of forms including dismissal, reduction in salary or other entitlements, changes to seating arrangements, changes to working hours and failure to appropriately respond to an employee complaint.
The rapid growth in the use of adverse action claims in response to a dismissal can be attributed to a number of factors including:
- no remuneration threshold (the unfair dismissal threshold is currently $118,100);
- longer time limits for applications – adverse action claims can be lodged within 60 days after dismissal, as opposed to within 14 days for a statutory unfair dismissal claim;
- broader coverage – covering employees, independent contractors and small businesses; and
- awards of damages are not capped.
In 2011, the number of dismissal cases proceeding to arbitration has averaged just under 1.5%, with a recent growth to over 3% over the final quarter of 2011. Although the majority of claims (54.9%) are still being resolved at the conciliation stage this growth in the proportion of claims arbitrated as well as the number of claims is significant.