Coalition to examine dismissal laws

The proposals would slash compensation paid to sacked workers and make it easier for businesses to dismiss ­employees.

Small Business Ombudsman Kate Carnell proposes easing unfair dismissal laws. Picture: Kym Smith

The Turnbull government will examine contentious proposals to slash the maximum compensation paid to unfairly sacked workers and allow small businesses to more easily dismiss ­employees.

Workplace Minister Craig Laundy joined employers in welcoming the proposals by Small Business Ombudsman Kate Carnell, but unions attacked her plan.

Ms Carnell has proposed lifting hurdles for workers pursuing unfair dismissal claims, creating a small-business enterprise agreement stream and inserting an award provision allowing small employers to trade off penalty rates and other entitlements for a higher hourly rate of pay.

She said the maximum compensation granted against a small business in dismissal cases should be cut from six months to three months’ pay.

She called for changes to allow small businesses to pay out an employee deemed “no longer a good fit for the business”. Such workers would receive a payout based on redundancy provisions in a relevant award.

She also proposed a “safe harbour” for small business to shield them from prosecution for in­­ad­vertent underpayment of wages.

Mr Laundy said the proposals were a “constructive contribution” as the government considered ways to make the work­place relations system easier for small employers and workers.

He said the government would continue working with Ms Carnell and consult widely to ensure the system worked for all.

Australian Chamber of Commerce and Industry chief executive James Pearson said the proposals were sensible.

“We support measures aimed at reducing the time and cost for small businesses involved in termination disputes, recognising the unique circumstances of small businesses and their limited resources and capacities,” he said.

“It is nonsense that small business people are required to navigate awards that can span over a hundred pages ... to understand what they should be doing.”

The ACTU said Ms Carnell was “proposing a licence for business owners to fire any person at any time for any reason or no reason”. “When we need meaningful penalties and strong deterrents against wage theft, these proposals are offering a free-for-all where employers can steal wages with no fear of consequences,’’ a spokesman said