FWC Annual report 2020-2021 in its historical context

The latest annual report from the Fair Work Commission is titled “Access for Justice”. I know several employers who would strongly disagree! As I have done for many years now, I report on the longitudinal study of unfair dismissal and adverse action claims. This is an eye-opener…I will also touch on other aspects of the Commission’s work and a bit of history. Enjoy.

First up, if you are a business that employs people and one (or more) of those people are not performing their duties to your satisfaction or done something that constitutes serious misconduct I urge you to read for FREE resource Preventing Unfair Dismissals and Unfair Actions.

The cash-grab that is the unfair dismissal industry

With the advent of the “unfair dismissal” legislation in 1997, this opened a previously unheard of business opportunity for lawyers and non-lawyers (known as “paid” agents) to expand their previous workers compensation businesses to what we now see as the proliferation of “no-win, no-fee” providers. This, for the first time, allowing sacked employees to seek redress in the FWC for being dismissed.

To illustrate my point, this financial year 2020-2021, will see the 300,000th unfair dismissal claim. At a conservative average of $10,000 per claim, this means that employers have shelled out $30,000,000!

The last financial year saw a year-on-year increase of 10 percent of unfair dismissal claims from last year.

For a year on year, the analysis goes to Preventing Unfair Dismissals and Unfair Actions.

The Fair Work Commission: How we got to where we are?

As with most Government actions, the establishment of (the now) FWC was born out of adversity; in this case the “great strikes” of the 1890’s which resulted in the colony of New South Wales conducting a Royal Commission into the strikes.

Fast forward to 1904 (three years post federation), where Henry Bournes Higgins, the industrial relations delegate for Victorian, said that a new Australian constitution should include a power to make laws with respect to:

“conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State”.

Noting that this term evolved over time to be called “interstateness”. Unions learning to circumvent this requirement by serving a log of claims on a company (say in Victoria) that they were targeting, and then a random company in (say NWS). These so-called “logs of claims” were a written document served on two or more employees that were so fanciful they could not be agreed (think 52 weeks annual leave per year). Because a company would not/could not agree to such an outrageous claim, this be definition put the union in a dispute with the company, and the “interstateness” was established. And hence the agreed outcome became the first commonwealth industrial awards (being the “agreed” outcome arbitrated by the (then) Australian Industrial Relations Commission.

See the historical timeline at the end of this report for a very interesting insight into how our industrial relations evolved.

The Kennett era

When the (then) Premier of Victoria was elected, he decided it was his mandate to get the state “back in the black”. His strategy to get the finances of Victoria back to “AAA” status was to sell off most publicly owned services to the private sector and move what he could from state-control to being financed by the federal government (not to mention removing the Melbourne Show Day public holiday).

Until this time, Victoria has two systems of industrial relations tribunals: “state” (located at the lower levels of Nauru House) and Federal or Commonwealth (upper levels of Nauru House).

In 1996 he disbanded the Victorian state tribunal and “transfers its powers” to the commonwealth for the private. Sector. The public sector followed in 2009.

Hence, therefore all our industrial relations issues are resolved in the federal jurisdiction, including the (now) FWC and federal courts of Australia.

What is the role of the Fair Work Commission?

The FWC is headed by the President, the Hon Justice Iain Ross AO, who is also a Judge of the Federal Court of Australia.

Commission Members perform quasi‑judicial functions under the Fair Work Act, including conducting public hearings and private conferences for both individual and collective matters. They also perform certain functions under the Registered Organisations Act concerning federally registered unions and employer organisations.

Members come from diverse backgrounds, including the law, unions and employer associations, human resources and corporate management, and the public service. Expert panel members must have knowledge or experience in one or more fields specific to their panel.

Members are independent statutory officeholders appointed by the Governor‑General on the recommendation of the Australian Government. They are appointed until the age of 65 on a full‑time basis, although they may perform duties on a part‑time basis with the President’s approval. Members of state industrial tribunals may hold a dual appointment to the Commission. Expert panel members are appointed on a part‑time basis for a specified period of not more than five years.

The role of the Fair Work Commission

The Commission is Australia’s national workplace relations tribunal. It was established by the Fair Work Act 2009 (Fair Work Act) and is responsible for administering the provisions of the Fair Work Act.

The Commission’s powers and functions include:

  • Dealing with unfair dismissal claims.
  • Dealing with anti‑bullying claims.
  • Dealing with general protections and unlawful termination claims.
  • Setting the national minimum wage and minimum wages in modern awards.
  • Making, reviewing and varying modern awards.
  • Assisting the bargaining process for enterprise agreements.
  • Approving, varying and terminating enterprise agreements.
  • Making orders to stop or suspend industrial action.
  • Dealing with disputes brought to the Commission under the dispute resolution procedures of modern awards and enterprise agreements.
  • Determining applications for right of entry permits.
  • Promoting cooperative and productive workplace relations and preventing disputes.

2019 to 2020 (oh what a) financial year

Justice Iain Ross AO, President of the FWC, sums up the year as:

“2019–20 has been a busy and challenging year for the Commission, as it has been for the Australian community generally. The COVID‑19 pandemic has affected many aspects of our lives and has brought significant changes to workplaces and the economy”.

The following pictograms set out the highlights of the annual report.

The FWC’s operational performance

As with most organisations, the FWC has key performance indicators (KPI’s) by which it measures its performance.

Enquiries through the roof

The number of enquiries to the FWC is staggering; 300 staff (including members) last financial year dealt with a huge number of enquires as this picture shows:

The number of claims

As previously mentioned, the number of formal applications that need to be dealt with by the FWC is enormous, with unfair dismissals being almost more than the total sum of all other matters.

Appendix 1: History of Industrial Relations in Australia

 

See the historical timeline at the end of this report for a very interesting insight into how our industrial relations evolved.