The ACT-National coalition have made a commitment to “simplify personal grievances”. According to the Minister for Workplace Relations and Safety, Brooke van Velden, the balance has swung too far in favour of employees with some “trying their luck at raising a personal grievance in the hope they will get a financial pay out”.
She says that this is causing uncertainty and additional costs for employers and that the Government “is committed to cutting the red tape and regulations that are stopping both businesses and employees from realising their full potential”. She also reasons that these changes are in the best interests of workers because “when it is costly or downright impossible to fire an employee, businesses are going to be more hesitant to take on new workers and give people a shot”.
As part of this commitment the Minister has announced a number of changes to the Employment Relations Act which she intends to become law in 2025.
I have previously written about the removal of the right to raise a personal grievance claim for employees earning over $180 000 and the introduction of the ability to negotiate an “exit package” in advance of the employment beginning. I described these proposed changes as a significant attack on workers’ rights.
Now it is turning into a full onslaught.
The most recently announced “update” to the Act will remove eligibility for remedies in personal grievance claims if the employee is at fault. This includes removing all remedies for employees whose behaviour amounts to serious misconduct and removing the entitlement to reinstatement and compensation for hurt and humiliation when the employee’s behaviour has contributed to the issue. The example provided in the Minister’s press release was repeated instances of poor performance.
The Minister has also referred to the situation where relationships have broken down in a workplace, in the eyes of at least one of the participants, and has said that no party should be forced to make the relationship work.
Other “technical” changes include allowing a reduction in remedies of up to 100%where an employee has contributed to the situation which gave rise to the personal grievance; requiring the authority and court to consider if the employee’s behaviour obstructed the employer’s ability to meet their fair and reasonable employer obligations; and increasing the threshold for procedural error in cases where the employer’s actions are considered fair.
Some of these changes might seem reasonable if the Employment Relations Act did not already provide for remedies to be reduced where there is “contributory fault” on the part of the employee. In fact the Act requires the authority and court to consider the extent to which an employee’s behaviour contributed to their dismissal.
In assessing this the authority and court must take into account causation, proportionality and justice. Or in one case the court described the test as whether the employee had been “perverse, foolish, bloody-minded, or unreasonable in all the circumstances”.
Part of the Minister’s justification for the law change is based on a 2016 court decision which appeared to suggest that remedies should not be reduced by more than 50% in any case. However the court can already choose not to award any remedies at all where an employee is found to be blameworthy and culpable.
The other key rationale is that the requirements of procedural fairness have become too strict and difficult to apply, especially for small employers. This has led to the “ludicrous situation”, says the Minister, where employees who have engaged in serious misconduct receive compensation.
But, again, the Act already allows the authority and court to exercise their “equity and good conscience” jurisdiction to determine whether overall the process was fair and to overlook minor or technical flaws. There is also an issue with how as assessment that the employee had engaged in serious misconduct could be made without a fair process, including giving them an opportunity to explain and be heard with an open mind.
Given that these mechanisms already exist, the intended reform could be viewed as an attempt to constrain the ability of the authority members and judges to exercise their discretion in cases where an employee is at fault. The fact that the Minister referred to remedy reductions dropping from 40% in 2013 to 22% in 2023, supports this. In other words, the ability to reduce awards exists but the Government appears to think that the judges are not using it enough.
It seems from what has been published that the authority and court will retain the ability to weigh an employee’s conduct and make assessments as to where the fault lies. This will preserve some ability to make decisions based on equity and good conscience, but this is inevitably going to lead to tension. It may also result in further litigation at least in the short term as parties seek to determine whether the employee is truly the author of their own misfortune.
Originally published in The Post
