Don't rush back to unfair dismissal laws

If the term mandate has any meaning at all, the Rudd Government has a mandate to repeal WorkChoices. The Leader of the Opposition has indicated he accepts the voters' decision, so there shouldn't be a problem. If there is, there will be an early double dissolution and the Coalition will lose another 20 seats.

Unquestionably, Labor can destroy WorkChoices, but it would be wise to move slowly, particularly in dealing with unfair dismissal.

My opposition to unfair dismissal has been well documented in columns in The Australian, but if press reports are to be believed I am not alone. Apparently there are plenty in cabinet and caucus who aren't keen to return to the unfair dismissal rules of the Hawke-Keating era.

The Howard government failed miserably in arguing its case against unfair dismissal. Ministers pointed out it was restricting employment, but they never explained how and why. There was considerable public debate about workers' rights but no mention of the rights of employers, and small-business employers in particular.

The term unfair dismissal slanted the debate one way right from the beginning. It implied that all dismissals were inherently unfair. No one favours unfair dismissal but fairness is in the eye of the beholder. No employee believes they were fairly dismissed.

The definition of a small business varies but is generally accepted as being one with fewer than 20 employees. The Australian Chamber of Commerce suggests that there are approximately 1.9 million small businesses with 3.5 million employees. That's a fair slice of Australia's workforce.

Most business owners are former employees who have struck out on their own because they want to be independent. The risks are many and varied because of the variety of trades, professions and commercial activities that come under the small business umbrella. Many invest their life savings and mortgage their home and business while working and worrying around the clock.

Some succeed, but up to 70 per cent fail in the first three years. The majority is lucky to eke out a living, with many earning less than their employees and without any of their entitlements (holiday pay, sick leave, paid public holidays and so on). When there's a credit squeeze or recession, or they simply make mistakes, they ask themselves why they didn't let someone else do the worrying.

Are there bad employers? Of course, but most treat and pay their staff well, if only because it makes for a happy and productive workforce. No sane employer sacks staff who are doing a good job. Are there bad employees? It's a silly question because we all know the answer.

In recent discussions with a friend who was defending unfair dismissal, I recounted some misdemeanours committed by those I had employed during 50 years as an employer. They ranged from the perennially late to one who stole a fortune from the business, and another who regularly failed to show up after a heavy night out. My friend responded: "But they can be sacked under the soon to be reintroduced unfair dismissal legislation." Really?

The previous legislation required an employer to furnish three warning letters, but that didn't guarantee that the employer wouldn't be involved in protracted and costly negotiations with the Industrial Relations Commission. And even if they won the case, the employer was invited by the magistrate to provide some go-away money to the employee.

The assumption was that anyone running a business could afford to pay. It was fine if you happened to be Woolworths, but not if you owned the corner shop. Faced with continued angst and legal costs, the employer invariably paid up.

The difficulty with unfair dismissal is prescribing in legislation the thousands of possible disagreements that can occur in the workplace.

At present the legislation is loaded overwhelmingly in favour of the employee. With the assumption by many union officials that everyone in business is rolling in money, what's a few months' extra wages to the "rich" boss?

And what of the employee who is doing a good job but the employer finds someone who can do it better? Unfair? No. Unlucky? Yes. An owner is entitled to make decisions that can mean the difference between success and failure. Providing the employee is given adequate notice and full entitlements, there should be no argument.

Reverse the situation and imagine the reaction if a long-term employee who has been paid and treated well for many years walks into the boss's office and says, "I've been offered a better job." Should the employee be penalised for unfair departure?

The tricky part for the Government is to draw a line between a small number of genuine unfair dismissals and the right of employers to hire whoever they wish to hire. If you think that's easy, try drawing up behavioral rules for married couples.

What the Government needs to turn its attention to is the Howard government's casualisation of the workforce. Genuine casual workers are easy to define. They are retirees, students, housewives and the like who only want a few hours' work a week. Increasingly, however, full-time workers are being designated as casuals and losing all their entitlements.

They may receive a slightly higher rate of pay, but when business is slow they can be stood down or sacked without notice. Consequently their average take-home pay is much lower.

It is reasonable for an employee to be given a three-month trial period as a casual, but after that any worker who works more than 25 hours a week should be considered permanent.

If the Rudd Government wants to help low-income workers, this is the area in which it should concentrate.