Monday, March 09, 2009

This employment law's so bad it should just be let go

For a government to impose additional costs on business during good times is courageous. In tough times it is simply foolish. Our surplus has been spent, unemployment is rising, we teeter on the cusp of recession and yet the Rudd Government is about to make life even harder for the vast bulk of our business community. Since March 2006 the Howard government's reforms have treated businesses employing less than 100 staff like responsible entities. For the first time in ages, businesspeople were able to dismiss employees who they could no longer employ without fear of being sued and consequently having to pay huge amounts of go-away money just to avoid a ghastly legal process.

Due in June, Rudd's new laws will condemn these businesses to a dreadful legal treadmill where the only way to get off is to cough up and cough up big. The legislation will hinder business growth and affect survival; it's an added stress and cost that they don't need and it comes at the worst possible time.

When it comes to sacking people for poor performance or misconduct there are two facts; firstly, no one who is sacked ever believes they deserved it. No matter what they did, they always deem it to be unfair. It is part of the human condition that we construct lies to self and others in order to be the innocent victim of an injustice rather than an appropriately punished perpetrator. The actuality is in the vast majority of cases employees who are sacked are sacked well after they should have been; they have usually been making life for everyone in their workplace hell, co-workers are fed up with them and in a temporary moment of courage or desperation the manager eventually takes the action they should have taken much earlier by saying goodbye.

Having said that, I concede sometimes employees might be sacked unfairly. I have yet to see it for myself, but I am told it happens. The point is, thanks to Rudd, business will now bear a huge cost for all those employees who deserve to be removed from the workplace, instead of the tiny proportion that might not.

Secondly, nobody likes or enjoys sacking an employee; employers avoid it like the plague. Like most people, they are terrified of conflict. Let us not forget that small business owners work closely among their employees, developing strong working relationships and where workforce relationships are tight, bosses, and how they treat team members, are in turn watched closely by staff.

So in plain terms, what does the new legislation mean for bosses, workers and the economy? After June this year, employers with fewer than 100 staff will have to pay to seek advice from expert consultants or lawyers prior to dismissing staff, costing the average small business up to $10,000 or more for every person they wish to dismiss. After the dismissal, businesses will have to pay these consultants again for representation at a court-style dispute resolution session in the offices of Fair Work Australia. For your reference, dispute resolution is simply code for "How much will you pay your ex employee to go away?"

These resolutions will not be achieved on the basis of justice, truth and fairness, but on the threat of mushrooming costs and unpredictable risks to the employer, costs and risks that will be exaggerated by the Fair Work Australia officials to terrify the employer into paying up.

Based on more than 15 years' experience in unfair dismissal processes, I found most workers and bosses who expect to have their story heard and justice dispensed are left shocked and disillusioned. Both employer and employee receive a short time to outline their case and the mediator hearing the matter usually makes it clear that they are not interested in the pedestrian details of their mundane story.

The better part of the dispute resolution session is always devoted to haggling over money. Because no evidence can be presented, the mediator has no way of telling who is lying, so the focus is to find the means to settle the dispute. This is done with a transfer of dollars from the employer's bank account to the ex-employee's. Weeks' pay is the standard term used for settlement currency, instead of dollars, possibly because it seems smaller and non-specific. Twelve weeks' pay sounds relatively insignificant until you convert it into dollars.

Knowing that unsettled cases proceed to a formal court hearing, at a cost of $25,000 to $50,000, and with active encouragement, misinformation, strong pressure and even bullying by the mediator in more than 80 per cent of cases the employer buckles by agreeing to a go-away fee. The matter is deemed settled, cash is transferred and a certificate is issued. For the employee, the odds of success are better than at any casino; they present to the session with a $50 fee, and after an hour usually walk away with over $10,000 in cash.

Under Labor's old laws, workers made 12,194 unfair dismissal applications for the period July 2005 to June 2006; 10,012 were settled at dispute resolution. Using a conservative estimate of 13 weeks pay per case, multiplied by the minimum wage, small businesses paid at least $109 million that year in go-away money.

In the year following the introduction of Work Choices, small business became exempt, and as a result only 7257 applications were made. Using the same formula for the 6068 settled cases, $69 million was paid. Under Rudd's new laws, I predict we will see the small and medium business sector slugged with a go-away money bill of well over $120 million a year. In 2009, this is a cost businesses can ill afford.

Rest assured, it is a cost that will be passed on to all Australians. Now that's unfair.


Comrade Rudd's great con game

It is going to be fascinating to see how long Kevin Rudd, the greatest illusionist ever to become prime minister of Australia, can maintain this illusion of omnipresent leadership created by his energy, his ubiquity and his hypocrisy. Underline hypocrisy.

Rudd is on course to become the next Gough Whitlam, but Whitlam without the wit. Like Whitlam, he may win a second election before the electorate wakes up. At least Comrade Whitlam was stuck with a claque of criminals in his ministry - Al Grassby, Jim Cairns, Rex Connor - whereas Rudd has no such impediment.

So remember the words, uttered last night, by Rudd on Channel Seven: "Any person's job loss through no fault of their own is a lost job too many when it comes to me. I'm the Prime Minister of the country, the buck stops with me."

Was Rudd able to save a single one of the 2000 manufacturing jobs lost at Pacific Brands last week? No, the buck stopped with the workers. This is the man who increased the immigration program to the largest annual intake in Australia's history, and it is now swelling the ranks of job seekers. This is the man whose Government will, tomorrow, introduce workplace legislation which will increase the power of unions, and give pause to job creators. This is the man who has offered no structural relief to the great job-creating engine of the economy - small business. And this is the man who panicked at the first sign of danger and sprayed the entire $20 billion budget surplus he inherited up against a wall.

If Rudd wants to be Everywhere Man, then let him play the role and bear the consequences. Like most other Western leaders responding to the global financial freeze, he is making it up as he goes along, because we are in uncharted territory. Global industrial output has fallen faster in the past six months than it did at the advent of the Great Depression in 1929-30.

The response of policymakers has been to pump a massive increase in liquidity and government debt obligations into the system. But as the eminent economic historian Professor Niall Ferguson, of Harvard and Oxford, recently warned on his website: "The general assumption seemed to be that practically any kind of government expenditure would be beneficial, provided it was financed by a really big deficit."

Sound familiar? Ferguson continued: "There is something desperate about the way people are clinging to their dog-eared copies of John Maynard Keynes's General Theory. Uneasily aware that their discipline almost entirely failed to anticipate the current crisis, economists seemed to be regressing to macroeconomic childhood, clutching the multiplier like an old teddy bear.

"The harsh reality that is being repressed is this: the Western world is suffering a crisis of excessive indebtedness. Many governments are too highly leveraged, as are many corporations. More importantly, households are groaning under unprecedented debt burdens. Worst of all are the banks. Some of the best-known names in American and European finance have balance sheets 40, 60 or even 100 times the size of their capital .

"The delusion is that a crisis of excess debt can be solved by creating more debt. Yet that is precisely what most governments currently propose to do." Space precludes listing Ferguson's prescriptions but they can be found on his website, and summed up with this sentence: "The solution to the debt crisis is not more debt but less debt."

Tell that to Kevin Keynes. In opposition, Rudd opposed the GST, which in retrospect has been a tremendous stabilising influence in the economy, thanks to John Howard. During the last election, Rudd campaigned as an "economic conservative". Upon winning office, and inheriting a $90 billion financial buffer from outgoing treasurer Peter Costello, he accused the previous government of creating a dangerous inflation threat. It was a fabrication.

After the global financial storm broke, Rudd attacked the excesses of neo-liberal market capitalism even as he spent the entire $20 billion budget surplus he had inherited from the neo-liberals in an absurd attempt to claim he had kept Australia out of recession. The evolution of his economic position has been an opportunistic fraud, exposed by those on his own side of politics.

As the former Labor leader Mark Latham wrote on February 20, in The Australian Financial Review: "When Kevin Rudd lobbied me in October 2004 to become Labor's shadow treasurer, his sales pitch was straight from the neo-liberal playbook. He was enthusiastic about pro-market policies such as deregulation and reducing the size of the state. [As leader] he went to the polls as Howard-lite."

Michael Costa, former Labor treasurer of NSW, dismissed Rudd's recent attack on the excesses of market capitalism, in a critique in The Australian on February 6 as "rambling and selective" and warned that Rudd's response to the global crisis "is likely to do more damage to the economy".

As Niall Ferguson has also warned. When the recession in Australia gets worse, and Rudd's Keynesian cliches have increased the long-term cost of the government intervention, Labor will run a diversionary personal campaign against the Leader of the Opposition, simply because Malcolm Turnbull is a wealthy former merchant banker.

What, you may ask, about the multi-millions the Rudd family has made from neo-liberal policies of the Howard years? Latham had something to say about this, too: "Rudd's wife created an impressive business network and fortune from the Howard government's privatisation of labour market programs."

Rudd can trim his economic sails to pick up whatever political wind he can find because he embodies the hollowness of the pursuit of power before principle.


Some Sydney local councils have pretentions to being wise and significant

But end up displaying their ignorance

Sydney's "inner west bank" is in ferment over Israel's alleged crimes against its enemies. Several councils in Sydney's inner-west have passed motions over the past 10 days accusing Israel of war crimes for its assault on Hamas strongholds in Gaza. One of the councils, Marrickville, established a sister city relationship in 2007 with the West Bank town of Bethlehem, whose council is controlled by proscribed terror group Hamas.

According to a motion passed by Marrickville Council last week, Israel is guilty of "the deliberate destruction on (sic) infrastructure and attacks on United Nations facilities". The motion says Israel should be forced to negotiate directly with Hamas, despite the terror group's declared intention to destroy the Jewish state. It calls for the immediate closure of all Israeli settlements in the Occupied Territories.

A motion passed last week by neighbouring Canterbury council "acknowledges the pain and suffering many Palestinian residents are experiencing as a result of the recent bombing by Israel". The Canterbury motion "condemns all violence, and is particularly concerned with this disproportionate offensive of Israel".

NSW Jewish Board of Deputies chief Vic Alhadeff said the motions were "completely unbalanced" and ignored the fact the war between Israel and Gaza was the result of Hamas firing 8000 mortars into Israeli civilian areas "while using Palestinian civilians as human shields". "The motion also misrepresents the test of proportionality in international law," he said. "What is a country to do in the face of sustained attacks on its population? What government would not act to protect its civilians?"

Independent Marrickville councillor and former mayor Dimitrios Thanos also criticised the council's move, saying it is "not our role to be writing letters to foreign governments stating positions that will be ignored". Marrickville Greens councillor Cathy Peters rejected the suggestion local councils should be focused on improving services rather than meddling in conflicts.


Baby bitten six times at childcare centre in Townsville

Another reason why a loving home is the only place for the little ones. Care by strangers sucks

A baby was bitten six times by another child - so badly that she was bleeding and bruised - but staff at her daycare centre didn't even notice. Lilly Herschfield, 15 months, was sent home as usual from Rupertswood Early Learning Centre and her injuries weren't discovered until her mother Michelle removed the toddler's shirt at home, the Townsville Bulletin reports.

The Queensland Government's Early Childhood Education and Care Office is investigating a complaint from her furious father Glenn Herschfield, who also reported the injuries to police following the incident on February 12. An official serious injury report filed by the centre said one of the two staff members in charge of Lilly's room had left 'for a period of time' while the other staff member changed a nappy in another room. According to the report, the staff member who left the room has been dismissed, while others at the centre have been formally reminded of the centre's safety policies. The centre's Townsville owner and their Sydney solicitor both declined to comment on the incident.

Mr Herschfield said he feels betrayed and wants to know why the toddlers were left alone long enough for his daughter to receive so many savage bites to her back, arm and thigh. He has been told he can only contact the centre though their lawyers. "We've just been shut out," Mr Herschfield said. "How can she be bitten that many times and no one see anything? "I expect to have her come home with paint on her or a smile on her face, but not with bite marks all over her. It makes me absolutely sick in the guts."

Mr Herschfield said he wanted to speak out about the incident so other parents would know what had happened. He's also angry at the Queensland Government who told him the issue would be dealt with 'in-house'. "I've just got a lot of questions," he said.

"She would have been lying there screaming ... I can't believe that no-one heard anything. "I think it's shameful. "I'm the father of this child, I deserve to have some answers."


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