Payouts trimmed in wish list of IR reform

Maximum compensation paid to unfairly sacked workers would be slashed under policy changes to be put to the government.

Small Business Ombudsman Kate Carnell. Picture: Kym Smith

Maximum compensation paid to unfairly sacked workers would be slashed, employers able to more easily dismiss staff and a new non-union agreement stream for small business created under workplace policy changes to be put to the Morrison government.

Seizing on the Coalition’s surprise review of the workplace system, Small Business Ombudsman Kate Carnell will also urge Industrial Relations Minister Christian Porter to consider significantly ­relaxing the test that applies to the approval of enterprise agreements by the Fair Work Commission.

Ms Carnell said the government could move immediately through regulation to fix the unfair dismissal laws given their deficiencies had been previously identified by the Productivity Commission and other reviews.

She said the Small Business Fair Dismissal Code had become “really unworkable” given the way it had been interpreted by lawyers and commission members.

“We get told all the time that small businesses are too scared to employ anyone because they have heard all the stories about unfair dismissal claims,” she said.

She added small businesses were prepared to pay “go away” money of thousands of dollars to an employee even where they believed the sacking was lawful.

“We want to get rid of ‘go away money’,” she said. “Small businesses are paying $2000 to $5000 to someone they believe stole money out of a cash register or was drunk at work because it’s cheaper than having to brief lawyers.”

Ms Carnell said she would urge Mr Porter to back a proposal she floated last year to cut the maximum compensation granted against a small business in dismissal cases from six to three months’ pay. “The issue with compensation is to ensure the amount is reasonable for the size of the business,” she said.

Mr Carnell said she supported small businesses to be able to band together and negotiate an identical non-union agreement with workers from different small firms.

She said the requirement that each individual worker had to be better off under an enterprise agreement should be eased. The more important issue was that at least a majority be better off and the agreement was backed by a majority of employees.

ACTU secretary Sally McManus last night rejected the proposals. “Ms Carnell’s suggestions would let employers subvert the legal minimum standards for pay and conditions,” she said. “They would reduce protections against being fired and undermine working people’s rights.

“Working people deserve a government that is on their side, but Scott Morrison has chosen to spend taxpayer money funding Ms Carnell’s attack on their pay and their rights.”

Liberal National MP Luke Howarth said small business owners should be given more flexibility to fire disruptive employees.

Mr Howarth, who was promoted to the assistant ministry after the election, said business owners did not take sacking staff lightly.

“As a small business owner myself previously, you have to understand workers are an integral part of the business. Without workers you have no business. So businesses don’t want to sack people just for the sake of sacking them,” Mr Howarth told Sky News.

“At the end of the day it is about making jobs more secure, believe it or not. And I think those smaller businesses should have a right to terminate if you have a rogue and disruptive employee.”

Acting Treasurer Simon Birmingham responded to Mr Howarth’s comments by attempting to deny the government was reviewing the industrial relations system.

“There is not a review. People are welcome to bring forward changes to any proposal of legislation at any time across any area. Whether or not the government takes it seriously depends upon whether it meets the test that government sets,” Senator Birmingham said.