The return of the ‘go away’ money

Simonious says:

02:02pm | 13/01/11

Nosthow, 4 days ago you said you had joined the Liberal party. Gee you are committed. But then may be you should be committed. Permanently

nosthow says:

04:21pm | 13/01/11

@Simonious - please keep abreast of things fella - I only lasted 1 day and couldnt live with myself so sought forgiveness from Joolya on hands and knees - all forgiven and back in the Labor fold snug as a bug in a rug !  hahahahhhhhhhhhhhh

Nafe says:

08:02am | 13/01/11

Why should the Employer and Employee be treated equally? Who’s money is it being risked in the business? Employer, Who’s financial integrity is on the line if the business goes bust? Employer, Who’s put up the capital to get the business started? Employer, Who has put in the hard yards and continues to deal with the financial and other pressures of owning a business? Employer, Who does the employee winge to when the coffee and milk run out? Employer.

And you believe the Employee is equal to the employer??? Your kidding right?

James1 says:

08:30am | 13/01/11

If it is so terrible being an employer Nafe, why do you do it?

Markus says:

08:58am | 13/01/11

You forgot this one Nafe - Who is the one that reaps all financial benefits from the success of the business that has come, at least in part, from the work of its employees? Employer.

KH says:

09:24am | 13/01/11

Nafe - who spends nearly a third of their life doing a job that most people don’t even really want to do, but they have to to earn money?  Employees.  who just gets paid a wage when most of the profits go elsewhere?  Employees.  who can get screwed over when it suits someone else to make jobs redundant? Employees.  who has to take short term contracts (more so these days) instead of the security of full time work?  Employees.  who is more likely to die in an accident at work?  Employees.  We could play this game all day…........

People are not office furniture - they deserve to be treated with some respect.

James1 says:

09:49am | 13/01/11

In the interests of balance, KH, if it is so terrible being an employee, why do you do it?

On threads such as this, everyone complains about how they have it so hard because they are an employer/employee, or that they hate their jobs, or that their jobs leave them unsatisfied.  If things are so bad, do something else.  Go to university, get some qualifications, apply for jobs you will enjoy.

SueB says:

10:01am | 13/01/11

I’m an employee, and I see my wages as return for investing my time and skill.  I see my boss’ profit taking as return for investing his money, time and skills. 

If you want some profits, start your own business.

Luke says:

02:01pm | 13/01/11

James… if it is so great to be one… why dont you do it?
heres a comment for ALL OF YOU
LIFE IS TOUGH… it dont matter who you are… Stop making out that it is so much easier being someone else… it aint!
(short of winning lotto)

Sam says:

02:05pm | 13/01/11

@Nafe, who will eventually be nationalised when people wake up to your greed ? the employer.

Sam says:

02:19pm | 13/01/11

James1, “If things are so bad, do something else.  Go to university, get some qualifications, apply for jobs you will enjoy.”

bugger that, start your own private army and rape and pillage and create an empire where the sun never sets… how about that instead? To increase chances of success just wait until you have a technological advantage and be a cold hearted opportunist when you encounter those “barbarians”. Wipe out civilisations and rape the earth. Long live the head of the empire (the rest are dispensible).

Tom says:

08:34pm | 13/01/11

@Sam, you didm’t forget to take two red ones this morning? The imagery was confronting. Bet the movie was great at 3:30am.

Bennymac says:

07:59am | 13/01/11

Who would bother to expand their business and create more jobs knowing that at any time, unfair dismissal laws, or worse still, the old AAAH me back workcover routine could send them under.
I am part of a sydney based furniture manufacturing business, we are a co operative of cabinetmakers who work together because hiring people, and training apprentices these days, put simply, is too risky, I have a wife, twins on the way, and a mortgage aswell.
It’s lovely that you feel all cosy and warm in your job Acotrel, just be aware that the burden of your comfort is being carried by people less fortunate than yourself in unemployment lines around the country, and by young people stuck in low paid, low skilled work.
Unfair dismissal=Australia, eternaly the dumb country.

Hard Working Harry says:

08:47am | 13/01/11

@Nafe - what about the employee - who is paid $30 and hour by his employer, and also charged out to customers for $180/hour by his employer.  Employees don’t just go to work/get a paycheck/go home, they are also play an important role in building up the business, often take just as much pride in their work as the business owner, and enjoy seeing business succeed (when this is the case the risk the business owner took starts paying back with strong profits, profits which barely filter down to the employee - and when they do it is in very small pay rises/bonuses while the business owner often makes big $$$$).

It seems like you may be a business owner who either doesn’t value his employees very highly, or has hired a few dud’s over the years so as not to see the real value employes can bring to business.

Dick J says:

10:08am | 13/01/11

Harry the problem is when you unfortunately hire a “dud” as you put it. The dud sues you when you end his employment. You go through the rigmaroll of counselling , helping, further training, warning, letters , opportunity to respond, them sometimes taking “stress ” leave- all steps having to be recorded.

To sue he files with Fair Work - there is a concilliation and possibley a court case, legal fees etc if you don’t settle. There is little liklihood of the employee being penalised as to costs. The system is set up to help employees not employers. What the employer has lost is is time , productivity & money which affects the bottom line and all other employees.

Good employees and a good   business is fantastic . Most employers look after their employees well. Human capital is vital. This us and them union stuff and government interferrence is what causes the real problem.

Your $30 /$180 per hour is a bit overblown. But remember as a rule of thumb about 75 cents in each dollar earnt is spent on overheads such as wages, tax , super,materials, interest, rent & insurance. The the sharehlders or owner want their cut. They do come last on the pecking order when it comes to money.

This is part of the problem Harry you personalise the income/ charge out rate but don’t consider the enterprise as a whole.

Markus says:

10:53am | 13/01/11

Dick J the problem is that only ‘most’ look after their employees well. Then there are the others, who reward their employees’ hard work by discontinuing their contracts and restaffing their entire business offshore or with workers on 457 Visas.

This system isn’t perfect, and luckily in most cases it is never actually needed due to good relationships between employer and employee.
Hopefully they can continue to adjust it so that it is more balanced between the two.

But when it comes down to it, without policy such as this the employer holds all the cards and the employee would not have a leg to stand on, regardless of their performance.

Mr GG says:

11:35am | 14/01/11

@Bennymac
you said your own problem… you are trying to manufacture in Australia. Globalisation means you must compete with the Chinese Labour who is paid peanuts. And No I don’t think that you should be allowed to pay an Aussie peanuts so you can compete. If you want to make a business one of the first steps should be working out if you can do it competitively.

@DickJ
that’s the point how many of those 75c go to people that are not doing anything.  If You consider the enterprise as a whole then, Why are there a whole bunch of useless exec being paid millions in bonuses for making bad decisions. And try working In IT $30 get charged at $200 all the time mainly so some Exec who put in a in some capital years ago can get a Hotter secretary to harass.

Jim says:

01:25pm | 13/01/11

What rational parent these days would encourage their littlies to go into business for themselves? Knowing the way IR laws have been screwed around to suit lazy bludgers and to effectively kill small business? And also knowing that there are still people like YOU who firmly believe every boss and business owner is an evil grub…why would you put your kids in that position?

Crazy man

RobJ says:

09:23am | 13/01/11

Prove a negative? How do I know you aren’t stockpiling WMDs? Prove it!

Brian says:

10:40am | 13/01/11

We can use these statistics to make some easy assumptions to answer your questions. Given that he is referring to both 1 and 2% figures, we can assume at least 81 cases (the first time it is possible to have 1 and 2 cases respectively round to 1 and 2%) were conciliated.

As for the period of the statistics, that’s rather simple. Fair Work Australia started operation on 1 July, 2009, hence the statistics can be no older than the last 18 months (No idea where you got the 3, 5 and 20 year marks from).

There you go, minimum case numbers (and 81 is enough to be statistically significant, if borderline) and the entirety of the history of the agency, all with about 90 seconds research and a little brainpower.

St. Michael says:

11:41am | 13/01/11

@ Brian, MozzilaMan: for unfair dismissals prior to Fair Work Australia being invented, you need to look for statistics from the Australian Industrial Relations Commission, or AIRC as it’s known.  Happily Fair Work Australia’s website holds all the AIRC statistics as well, going back to 1996 when the Workplace Relations Act was first instituted.

Although you’ll find the proportions have remained generally consistent: 75-80% of unfair dismissal claims are settled out of court, with a small proportion succeeding as unfair dismissals, and roughly 1 in 6 of every successful unfair dismissal claimant going back to work for the old employer (reinstatement.)

RobJ says:

12:09pm | 13/01/11

Of course Andrews knows all about go away payments. How much did your incompetent malicious actions towards Dr Haneef cost us again?

acotrel says:

11:22am | 13/01/11

The last private company I worked for, was owned by a multimillionaire.  He believed in ‘do it right first time’..  He manufactured custom made industria l equipment, and had 100 staff, 24 of whom were qualified draftsmen and engineers.  He’d perfected the design, manufacture and deliver system.  He paid his staff well, especially those who went overseas on installation.  There was no union in his workplace, there was no need for one. If anyone talked union he’d offer them a month’s wages, and suggest they look for another job.  I had no problem with that, it was his choice, and in any case he always did the right thing by his staff. The stuff that Kevin Andrews is into is just pandering to the duds - the ones who pay lip service to quality management and OHS, the ones that are GRUBS!!!!!

persephone says:

11:21am | 13/01/11

Yes, I’ve always loved that - the Liberals defending employers rights to dismiss people unfairly!

Surely they should be working to make it easier for employers to dismiss workers fairly - which means providing a tribunal or something similar to process cases quickly and cheaply.

Oh, is that already happening?

AdamC says:

11:57am | 13/01/11

“If you’re not sacking workers unfairly, then what’s the problem?”

That is an incredibly silly and naive comment. The costs and risks that arise from unfair dismissal are not trivial, especially for smaller businesses. And, of course, cases are always going to be difficult to adjudicate given both parties have likely fallen out with one another.

I also question the benefit to workers. As the stats in the article demonstrates, payouts are often small but the costs in everyone’s time and stress level would be substantial

Brian says:

12:15pm | 13/01/11

Remember that it takes time and money to go to the tribunal, even when you’re in the right. If paying someone to go away is cheaper than the cost of the tribunal, you’d do it too.

Imagine you’re booked for littering, and offered a $50 fine. Now imagine you’re told that you can challenge it, but a non-refundable cost of $500 for court costs is required, which will not be returned even if you win. Some people will challenge the fine as a matter of principal, but most would just pay the $50, complain about the corruption inherent in the system and move on. That’s roughly the situation we’re in now - paying a few thousand dollars is cheaper than the legal advice and time required to challenge the claim.

St. Michael says:

12:18pm | 13/01/11

@ AdamC:

“The costs and risks that arise from unfair dismissal are not trivial, especially for smaller businesses.”

Such as? Employers never get costs orders against them.  How much does it cost for the single conciliation session of 1.5 hours with Fair Work Australia, conducted by conference call, especially if you’ve joined an employer’s union like the Chamber of Commerce and Industry?

“And, of course, cases are always going to be difficult to adjudicate given both parties have likely fallen out with one another.”

By adjudicate, let’s assume you actually mean “conciliate” since that seems to be the context.  To which the answer is, FWA’s own statistics and surveys disagree with you.  75-80% of cases settle at conciliation or ahead of trial.  And there was a 99% satisfied response to FWA’s surveys about how its conciliators handle the telephone conciliation conferences.

If, however, you mean “trial” by “adjudicate”, how the parties feel about one another is more or less irrelevant unless reinstatement is being sought.

“I also question the benefit to workers. As the stats in the article demonstrates, payouts are often small but the costs in everyone’s time and stress level would be substantial.”

What you seem to be missing is that those payouts are calculated on loss of wages between the date of dismissal and the date of trial.  You might not think $2,000-$4,000 is a big amount, but if that amounts to 4-6 weeks of someone’s wages, which they survive on, then the significance for them is somewhat greater, wouldn’t you agree?

As for the stress and time to everyone: high as I’m sure an employer’s stress level goes by having to pick up a phone and attend on a conciliation conference, I’m pretty sure the stress on an employee who’s told one Friday afternoon—because that’s the most popular time to sack—that he doesn’t have a job on Monday and therefore won’t have a wage with which to feed his family or pay his mortgage, is probably a lot higher.  But if the employer actually behaves like a human being, much of that stress can be avoided.  Indeed that’s always an employer’s best defence: if you do the right thing, even during dismissal, for the most part you won’t have a declaration of unfair dismissal made against you.

Michael N says:

12:42pm | 13/01/11

The problem is that it is cheaper to pay the money than the court costs… Did you read the article?

I put it to you that if you’re a good worker then you’ll have nothing to fear. I write this as an employee (and I’m likely to stay an employee because I lack the conviction to quit my job and fend for myself as a small business operator). However, I don’t fear that I’ll be unfairly dismissed because I deliver what’s required of me. Consequently I get paid a good wage and everyone’s happy.

I do, however, regulalry see people who treat employment as a “right” as opposed to an agreement between employee and employer. These people focus more on their conditions of employment than on the work they were hired to do and these are the types who cry foul when they are dismissed for failing to conduct the tasks for which they were hired. They will always struggle to retain employment (in the private sector at least). And they will always be a burden on anyone who hires them. In times of low employment they will be the first to go but of course, it’s always someone elses fault. Hence the “go away” money.

St. Michael says:

01:24pm | 13/01/11

@ Michael N: the idea you’re a good worker and therefore have nothing to fear is, respectfully, a bit naive because it depends on having a moral boss.

It is a fundamental rule that nobody can be more honest than their own boss.  Either you will comply when the boss instructs you to do something that conflicts with your own personal integrity or morality, in which case you will be as dishonest as your own boss; or you will resign or be “performance managed” out of job if you refuse to do the dishonest thing requested of you.

This is particularly so if you work in a field where regulatory controls are imposed and your boss demands that you flout those controls regularly.  Being a “good” employee doesn’t save you there.  Being an employee willing to risk regulatory breaches in the interests of keeping your job is.

Think it doesn’t happen? Try the child care industry at large, especially some of the larger providers.  There’s many reported cases of workers who wouldn’t put up with employers breaking regulations because their own personal responsibility and personal integrity would not allow it.  Those employees were quickly shown the door.  In many cases, because they served under 6 months, or because they were in a small business which has relaxed rules on dismissal, they couldn’t claim for unfair dismissal.

The old “if you have nothing to hide you have nothing to fear” argument is no more valid in private enterprise than it is in law and order discussions, I’m afraid.

I will concede this: if—and only if—your job security is linked solely to your job performance in a measurable and quantifiable sence, i.e. piece rates or the like—then doing your job clearly renders the risk of unfair dismissal lower.  But it doesn’t remove it, and in most businesses job security is not so linked.  G.K. Chesterton might’ve said “A man owes his employer nothing but performance”, but the real world says that, to remain an employee, a man generally owes subservience to his employer and compliance with dishonest practices as well.

Brian says:

02:07pm | 13/01/11

‘How much does it cost for the single conciliation session of 1.5 hours with Fair Work Australia, conducted by conference call, especially if you’ve joined an employer’s union like the Chamber of Commerce and Industry?’ St. Michael asks.

He has a point, that costs very little… but that is exactly why it stops there - to take it further is too expensive. And as far as the 99% satisfied response - any survey for ANY service getting 99% approval is likely to be suspect, as even if your workers are that good there will always be people who are unreasonably unhappy with their outcome.

More likely what it means is the employee has said ‘they got me money, I’m happy’ and the employer has said ‘Thank goodness that didn’t cost too much, I couldn’t afford to fight it’. It has no relation to the fairness of the approach. Indeed, if it was fair you would expect more people to be outraged than 1%, as often BOTH sides are certain of their honesty.

St. Michael says:

03:31pm | 13/01/11

@ Brian: Let me ask the question I asked Michael N.: how much to take the case to trial?

Unfair dismissals tend to get set down for one day of hearing, or two at best.  The communications with Fair Work Australia are by e-mail; it’s not like you have to go down there and talk to a real person every time there’s an issue.  Appointments with your advisor are not all-day affairs, they’re maybe a couple of hours at best.  It’s not that complex an area.

For all the discussion about cost, neither Kevin Andrews nor anybody else seem to have cited exactly how much an unfair dismissal case costs for an employer to take it to trial.  Like I said, most of the time you can’t bring expensive lawyers in; you’re down to “industrial advocates” or CCI as the employers’ union for representation.  It’s not like you can get a QC into the trial, you know.

There’s also the fact that many employers actually have insurance to cover unfair dismissal claims, too.  In these cases the employer doesn’t wind up paying much for defending the trial at all; they might pay an excess of $500, but either the settlement, or the costs of trial and the compensation claim (if proven) are wholly paid via insurance.  The argument that “oh, my god, all the costs of the unfair dismissal are coming directly out of my profits this week” is a little rich in those circumstances at the very least.

Feel free to start saying that “oh, but employers shouldn’t have to have insurance against this,” to which the answer is: we have insurance for most other unforeseen calamities in our existence, and it is indeed prudent to insure against them—the idea being that insurance reduces your costs.  In the case of unfair dismissal insurance: almost to zero.

As for the survey results: be suspicious all you like, and feel free to ask FWA about them.  They conducted it with anyone who was willing to participate in the survey who had been involved in a conciliation conference over 2009-2010.

Brian says:

04:29pm | 13/01/11

The major cost is often in time, not the payout. Out of interest I messaged the only employer (an uncle) I know about the issue, and he does indeed have insurance for unfair dismissal claims - which only covers the payout, not any costs of fighting it. Even more reason to settle at conciliation (I do not know whether this is the common arrangement, just that it applies to at least one accountancy firm) regardless of whether you’re in the right.

He also said that he wouldn’t fight any small claim because even if that meant they were busy on the ‘case’ for about 10 hours (include travel time, correspondence, any arbitration appearance, meetings, and talking to any advocate they’re better off just letting it go.

St. Michael says:

11:45am | 13/01/11

To correct a couple of items in here, specifically in relation to statistics:

I said 492 unfair dismissals went to trial (called “arbitration”).  That’s just for the year of 2009-2010, not over the past 10 years.  That 492 is made up of applications under the Fair Work Act and the Workplace Relations Act (we were in a transition period from the old act to the new.)  Of those 492 applications that went to arbitration, 73 resulted in a finding against the employer—the remaining 419 were dismissed, i.e. employee did not win.  Of the 73 that won, 22 resulted in reinstatement, and the remaining 51 received compensation in lieu of reinstatement.

St. Michael says:

03:40pm | 13/01/11

Probably because Kevin Andrews, like the rest of the Liberal government, had 12 years in office to do something about the “sound economic argument”, and didn’t.  Even when they rewrote the Workplace Relations Act which governs unfair dismissals under Federal law.

You see, go-away money, on Kevin’s logic, was being paid in roughly 70-80% of all unfair dismissal cases brought to the AIRC while Howard was in government—taking Kevin’s assumption that all settlements amounted to the payment of that cash.  We know that because FWA’s statistics clearly show how many matters went to trial and how many were settled: across the 10 years or so, roughly a 30/70 split between settled/taken to trial.

John Howard and friends didn’t stop the go-away money then, even when they had two Houses of Parliament and the opportunity to impose any ideological laws they wanted with respect to unfair dismissals and workplace rights.  They didn’t outlaw go-away money; didn’t even stop it.  All they did was cut out most employees’ capability to even apply for unfair dismissal, which was probably throwing the baby out with the bathwater if getting rid of go-away money was their concern.

As it is, Howard had a law degree.  He practiced before politics.  He understood what every lawyer does: in civil law in Australia: most cases are settled via out-of-court settlement, with a minority going to trial.  That’s the Westminster system for you.  Got a problem with that, take it up with Blackstone and Coke; they got us into this mess.

Richard says:

09:21pm | 13/01/11

The solution has already been worked out, and is being implemented to a greater and greater degree with each passing financial year. This is the age of the sub-contractor, the casual. Full-time employment with holiday pay and sick leave etc is dying, and we can all thank Labor for that one.

Brian says:

04:38pm | 13/01/11

Take the case of my father’s close friend who owned a furniture store (I know above I’ve said I only know one employer - that’s true, I haven’t seen furniture store man in about five years, and he’s now swold out and retired). He caught one of his staff members stealing from the till, but unfortunately it was his word against hers.

Deciding that given there would be no benefit trying to have her charged, as all evidence was circumstancial (the girl was savvy and only stole on shifts with other people working around her, and the only evidence it was her was that he had caught her red handed) he simply fired her on the spot and decided to let the matter rest. She didn’t, and claimed unfair dismissal, and he ended up paying her about a thousand dollars to go away after three meetings and a conciliation attempt in which she claimed that the accusations were made up after the fact to cover for sexual harassment.

Granted, I have only got one side of this story, but even if this specific case were a real case of unfair dismissal, I’ve met plenty of people capable of the alleged actions of the girl in question, and I doubt the owner of the store is the kind of man to harass anyone.

Note that this isn’t me saying that unfair dismissal rights are wrong - they’re essential to fair workplace balance - but sometimes they get it wrong.

St. Michael says:

05:16pm | 13/01/11

@ Brian: my apologies, I thought you were entirely unreasonable, and I’ve been proven wrong.

About the only defence one can make for the (valid) point that unfair dismissal sometimes gets it wrong is that the adversarial system frequently does.  But that’s a feature of Westminster courts rather than workplace law as such, IMHO.

Brian says:

06:17pm | 13/01/11

To be honest St Michael, I actually agree with some of your points and just like a good debate, particularly against someone who can pose a halfway decent argument.

For that matter I think that although the original article shone some light on the problems that the system does have, I have no better solution. And, as has been mentioned by others, this isn’t something that has just come back since Labor was voted in (the Furniture store man story happened sometime around 2000, for example).

The only real difference between you and I, I suspect, is the extent to which we believe the wrongful dismissal system we have gets it wrong - I think that probably the majority of payouts less than about $3,000 are ‘go away’ payments, rather than something where the employer has admitted they did the wrong thing. Payouts much above that are probably the REAL wrongful dismissal claims, and well deserved.

Mr GG says:

11:37am | 14/01/11

too true…
Simplification of Law would make things fairer but then why would we need all the over paid pollies to keep passing new ones.