Common Law may stop WorkChoices

An Ebono articleEmployers may not have fathomed the full import of the 700 pages of the WorkChoices Bill 2005, the 566 page explanatory memoranda, 800 page Act or the 600 pages of the Workplace Relations Regulations, but the legal eagles have. Some predict an unprecedented fightback against the legislation based on the right of employees to fair treatment, now that the Act is proclaimed. This battle will be waged outside the Industrial Relations arena, and may introduce to the fray lawyers previously excluded from the so called “Industrial Relations Clubâ€Â.

The Act specifically removes the rights of employees in smaller organisations to lodge a claim with an industrial relations tribunal that a dismissal was unfair, in effect converting their employment to ‘at will’ status. While this theoretically removes the major legislative thorn in the side of small business, in practice it merely brings us into line with countries like the US, where the majority of private enterprise employees have no statutory right of protection against unfair dismissal. However, there is a warning implicit in this similarity, as a number of individual states in the US have modified the general rule that employment is ‘at will’ by holding that employees may have implied common law contract rights to fair treatment by their employers.

Employers regularly complained about the regulatory framework, but it capped claims at a little over $45,000. WorkChoices offers the opportunity to sue employers under common law, with no cap on claims. Of course, the threat of costs being awarded against the loser in such a claim is a deterrent, but a coordinated effort by State governments and unions could use such claims to powerful effect.

In fact, the main focus of the legislation has not been to achieve results demanded by business, it has been a move toward the ideological goals established by the HR Nicholls society in 1989. It aims to destroy the union movement, and centralise industrial relations under Federal control. As former Secretary of the Treasury, John Stone, has made perfectly clear in his paper for the HR Nicholls Society, the government has compromised those principles for electoral acceptance. He wrote “…any suggestion of a move to the law of contract has been largely put aside; the dysfunctional and socially reprehensible system of minimum wages is to continue in being, … and our workplace relations laws generally will remain in a fearful mess.â€Â

This fearful mess has IR lawyers smirking behind their 800 page copy of the Workplace Relations Act 1996 as amended. It offers the opportunity for large payouts in cases where a dismissal was clearly unreasonable.

Termination without reason
With John Howard and Kevin Andrews fanning the flames, the media has focused on the tantalising possibility that employers can simply give a worker due notice that s/his employment contract is terminated and ask s/him not to darken the company doorstep anymore. Theoretically this will be the end of the matter.

If the Common Law stood still, this would more than likely be the case, as there has been a reluctance to go beyond the principle that damages for unfair dismissal at Common Law are restricted to the amount of notice that was owed.

This tantalising possibility is the bait, set into the Act by the government in the hope that businesses will rise to it in significant numbers. If these dismissals are not callenged in the ordinary courts, or the courts rule them reasonable, courts will essentially achieve for the government what is politically impossible and establish the right of employers to terminate employment contracts without reason.

It is, however, a high risk strategy for the government. If unions and state governments get their act together, it could backfire significantly. In the words of Justice Madwick, “courts are beginning to recognise that the physical, financial and psychological welfare of employees deserves some protection. In England, for example, there has been developed the implied term of trust and confidence which acts as a brake on what might otherwise be an employer’s unreasonable conduct.â€Â

Successful claims of breach of trust and confidence in the ordinary courts could simply replace the existing unfair dismissal laws with a new set of precedents, with no cap on the size of claims, and legal costs that will dwarf anything yet seen in the Industrial Relations Tribunals.

Reversing the spin

WorkChoices has been ostensibly designed, and sold to the public, as a means to reduce red tape and liberate business from the constraints of a restrictive industrial relations system. As is so often the case, the liberators forgot to hide those parts of their agenda which do not coincide with that of the liberated.

Business wanted regulations with a light touch, that maintained a level playing field while handicapping the employees as much as they dared, acting within reasonable constraints. Instead they have become the battleground in an ideological war.

By backing individual employees who have been unreasonably dismissed and tying up their employers in common law cases where they are forced to justify their actions in the public arena, State governments and unions could potentially reverse this spin and expose the legislation for what it is.

Activist Henry de Suvero reports similar tactics were used effectively in the US in 1968 to defend protestors accused of resisting arrest and disturbing the peace. Legal volunteers and national contributions mounted a campaign that jammed the courts with hundreds of cases defending the protestors. In the end the government was forced to drop charges rather than face opposition from the courts, police and the media in an already politically charged climate.

With the new laws a fait accompli the challenge is to show vulnerable employees a way to protect their jobs and, at the same time, alienate business owners and managers from the ideologues that are inflicting on us ever more horrendous laws.

— ENDS —

Giovanni Ebono has significant experience presenting complex information to a mainstream audience as a magazine editor and television producer. His radio show, The Generator, broadcasts weekly on Bay-FM in northern NSW.

Leave a Reply