An upcoming change to the Employment Relations Act means workers earning over $180,000 will lose the right to raise unjustified dismissal claims.
Workplace Relations and Safety Minister Brooke van Velden said the change allows more flexible dismissal processes for high-income employees.
Gareth Abdinor from Abdinor Employment Law tells Matt Heath and Tyler Adams that it makes it easier to move someone on who doesn’t have the chops for the job.
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Speaker 1 (00:09):
You're listening to a podcast from newstalks 'b Follow this
and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
Government plans to prevent top earners making unjustified dismissal claims.
The legislation will be introduced to Parliament next year. To
have a chat about this, we're joined by Gareth Abdnor.
He is the director and founder of Abdnor Employment Law.
Gareth a mate, Nice to chat again.
Speaker 3 (00:35):
Oh, it's lovely to be here.
Speaker 4 (00:37):
So Gareth, what exactly can you explain what they mean
by unjustified dismissal in this case?
Speaker 3 (00:44):
Yeah, so, very very interesting policy. And essentially what I
understand the proposal to be is that employees can still
raise a claim for being treated unfairly, but they can't
raise a claim for being unfairly dismissed in a similar
(01:07):
way to the day trial period. And so someone dismissed
under the ninety day trial period could still raise a
claim for breach of good faith or being disadvantaged, but
not for the dismissal itself.
Speaker 4 (01:22):
Right, And what are the advantages of making it easier
to get rid of poor management?
Speaker 3 (01:27):
Yeah? Again, very interesting because it creates this two tier
system and the arguments that I've heard are that it
makes it easier to move on someone who doesn't have
the chops for the job.
Speaker 4 (01:43):
Yeah.
Speaker 3 (01:44):
So, you know, in much the same way that the
ninety day trial periods being justified, it lets employers give
someone a go. Now, while I think that's really convincing
for the ninety day trial period, I think it's a
bit of a push for this artificial camp of one
hundred and eighty k. You know, why can you not
(02:07):
unfairly dismiss someone earning one hundred and seventy nine as
soon as they earn an extra thousand dollars you can
sack them without consequences. It seems a bit strange to me.
Speaker 2 (02:19):
So would you bet?
Speaker 4 (02:20):
Would it be better? And I'm not sure if this
is possible, but would it be better if it was
defined as people in managerial roles? Because there's people in
on earning one hundred and eighty K. Engineers, as a
caller said just before, can be earning over one hundred
and eighty K, but they're not in a managerial role.
Speaker 3 (02:37):
Yeah, I mean, that's certainly an interesting idea. I think
the difficulty would be in implementing that. I think from
my perspective, being boots on the ground dealing with these
claims day in day out. This proposed change I think
signals the fact that the pendulums perhaps swung too far
(02:59):
to one one end. The grievance industry has been created,
and this is one way of trying to egg that back.
I think it's a bit artificial, though, and what would
be better would be to actually give better compensation to
(03:21):
people who've really been treated poorly and stop this industry
where anyone who's dismissed knows that if they raise a
claim it's going to be more cost effective for the
employer to pay them five grand rather than defend it.
Speaker 2 (03:38):
So, in your expertise, Gareth, you talk about the grievance industry.
Is that more of a problem at the upper end?
Is this legislation would target or is that a problem
across the board.
Speaker 3 (03:51):
I think it's a problem across the board, and in fact,
I think it's more of a problem on people on
more moderate incomes. You know, when we're dealing with people
on high salaries, often they are more alive to the
fact that if they don't actually fit in the role
(04:12):
and they're not performing in the role, they're going to
get moved on anyway, and so I think there's often
a higher level of pragmatism for those sorts of employees.
The grievance industry, you know, the no winnow fee type
arrangement is often more people on modest incomes.
Speaker 4 (04:36):
So currently, right now, so you've got a company and
you've hired someone and they're proving to be such a
bad manager that you can see that your company is
in trouble. What are the options for the people up
the chain now to deal with that situation if they
see their company rotting out from underneath them because of
a bad management choice.
Speaker 3 (04:58):
Yeah, and that's a great question, and the options aren't
really great. You know, you can go down the performance management,
which takes time, takes money, and is not without risk.
Or you can go through a restructure, which is often
(05:18):
artificial and done to achieve the desired purpose. But you know,
you have to effectively go through a charade.
Speaker 1 (05:29):
Or.
Speaker 3 (05:31):
You have an honest conversation and sometimes that works, and
sometimes you get flapped with acclaim. Of course, you know,
someone who's not performing and is having an impact on
the business isn't restricted to managers, and we often see
it with any sort of role that has interaction with
(05:52):
your clients. And so that's why I think this it's
not necessarily a bad idea, but it's somewhat artificial because
it sets up this two tiered structure. Why should someone
be treated unfairly or not have a fear process simply
because they're on a higher income.
Speaker 4 (06:13):
So when you talk about this sort of unjustified there
when you're talking about the unjustified dismissals part of it.
So if a boss came in and they had enough
of the manager, would this enable the you know Hollywood
movie style coming in your fired, get out, you know
you're out today? You know it would without enable that.
Speaker 3 (06:35):
Well, it's interesting to see because we haven't actually seen
the draft legislation yet. I haven't seen it. I expect
that it wouldn't allow that to happen, and it would
simply be that more lassitude is given to employers dealing
with these high income earners. I think the devil is
(06:58):
going to be in the detail. Really, yes, isn't it?
Speaker 4 (07:01):
But I guess the the the plus side of it
is that if you are in a company and you're
you know, you're spending a long time and you know
the company really well, and then instead of taking a
risk on you to put you in management, because they're
not going to sure how it turns out, they're going
to bring someone from outside of the company that has
a better CV. So, you know, for someone that's been
working a long time in a company shows what they're worth,
(07:21):
this might be an easier path up for you to
prove yourself.
Speaker 3 (07:25):
Oh, definitely, definitely, And we've seen that with the reintroduction
of the ninety day trial periods. Certainly employers that I
work with are more open to giving someone a go,
taking a chance on them because there's less at risk,
and that will likely be the case for more senior
(07:47):
people as well. I guess the one thing that I
found really interesting about the discussions over this proposed change
is that parties will still be able to agree to
have protections in their ployment agreements. And so, you know,
if you're running a comp company and you really want
(08:10):
to hire a rock star with a great reputation, I
wouldn't be surprised if that rock star made it a
requirement if there were protections in the employment agreement.
Speaker 4 (08:22):
But if you're if you're not, if you're not a
rock star, you you might be limiting your chance of
getting the promotion if you insist on that clause.
Speaker 3 (08:32):
Definitely, because you're kind of saying really good point.
Speaker 4 (08:35):
You're kind of saying, you're kind of saying, there's a
chance I might be rubbish.
Speaker 3 (08:41):
That's right.
Speaker 2 (08:42):
Well, Gareth, if this comes in, you're going to be
a busy man, that's for sure.
Speaker 3 (08:46):
Oh yeah, I think so. Interesting time, Yeah, yeah, it.
Speaker 2 (08:50):
Is always good to chat. Thank you very much, Thanks
a lot, guys. That is Gareth Abdenor, the founder and
director of abdenaor Employment Law.
Speaker 1 (08:59):
For more from News Talks B listen live on air
or online, and keep our shows with you wherever you
go with our podcast on iHeartRadio
You're listening to a podcast from newstalks 'b Follow this
and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
Government plans to prevent top earners making unjustified dismissal claims.
The legislation will be introduced to Parliament next year. To
have a chat about this, we're joined by Gareth Abdnor.
He is the director and founder of Abdnor Employment Law.
Gareth a mate, Nice to chat again.
Speaker 3 (00:35):
Oh, it's lovely to be here.
Speaker 4 (00:37):
So Gareth, what exactly can you explain what they mean
by unjustified dismissal in this case?
Speaker 3 (00:44):
Yeah, so, very very interesting policy. And essentially what I
understand the proposal to be is that employees can still
raise a claim for being treated unfairly, but they can't
raise a claim for being unfairly dismissed in a similar
(01:07):
way to the day trial period. And so someone dismissed
under the ninety day trial period could still raise a
claim for breach of good faith or being disadvantaged, but
not for the dismissal itself.
Speaker 4 (01:22):
Right, And what are the advantages of making it easier
to get rid of poor management?
Speaker 3 (01:27):
Yeah? Again, very interesting because it creates this two tier
system and the arguments that I've heard are that it
makes it easier to move on someone who doesn't have
the chops for the job.
Speaker 4 (01:43):
Yeah.
Speaker 3 (01:44):
So, you know, in much the same way that the
ninety day trial periods being justified, it lets employers give
someone a go. Now, while I think that's really convincing
for the ninety day trial period, I think it's a
bit of a push for this artificial camp of one
hundred and eighty k. You know, why can you not
(02:07):
unfairly dismiss someone earning one hundred and seventy nine as
soon as they earn an extra thousand dollars you can
sack them without consequences. It seems a bit strange to me.
Speaker 2 (02:19):
So would you bet?
Speaker 4 (02:20):
Would it be better? And I'm not sure if this
is possible, but would it be better if it was
defined as people in managerial roles? Because there's people in
on earning one hundred and eighty K. Engineers, as a
caller said just before, can be earning over one hundred
and eighty K, but they're not in a managerial role.
Speaker 3 (02:37):
Yeah, I mean, that's certainly an interesting idea. I think
the difficulty would be in implementing that. I think from
my perspective, being boots on the ground dealing with these
claims day in day out. This proposed change I think
signals the fact that the pendulums perhaps swung too far
(02:59):
to one one end. The grievance industry has been created,
and this is one way of trying to egg that back.
I think it's a bit artificial, though, and what would
be better would be to actually give better compensation to
(03:21):
people who've really been treated poorly and stop this industry
where anyone who's dismissed knows that if they raise a
claim it's going to be more cost effective for the
employer to pay them five grand rather than defend it.
Speaker 2 (03:38):
So, in your expertise, Gareth, you talk about the grievance industry.
Is that more of a problem at the upper end?
Is this legislation would target or is that a problem
across the board.
Speaker 3 (03:51):
I think it's a problem across the board, and in fact,
I think it's more of a problem on people on
more moderate incomes. You know, when we're dealing with people
on high salaries, often they are more alive to the
fact that if they don't actually fit in the role
(04:12):
and they're not performing in the role, they're going to
get moved on anyway, and so I think there's often
a higher level of pragmatism for those sorts of employees.
The grievance industry, you know, the no winnow fee type
arrangement is often more people on modest incomes.
Speaker 4 (04:36):
So currently, right now, so you've got a company and
you've hired someone and they're proving to be such a
bad manager that you can see that your company is
in trouble. What are the options for the people up
the chain now to deal with that situation if they
see their company rotting out from underneath them because of
a bad management choice.
Speaker 3 (04:58):
Yeah, and that's a great question, and the options aren't
really great. You know, you can go down the performance management,
which takes time, takes money, and is not without risk.
Or you can go through a restructure, which is often
(05:18):
artificial and done to achieve the desired purpose. But you know,
you have to effectively go through a charade.
Speaker 1 (05:29):
Or.
Speaker 3 (05:31):
You have an honest conversation and sometimes that works, and
sometimes you get flapped with acclaim. Of course, you know,
someone who's not performing and is having an impact on
the business isn't restricted to managers, and we often see
it with any sort of role that has interaction with
(05:52):
your clients. And so that's why I think this it's
not necessarily a bad idea, but it's somewhat artificial because
it sets up this two tiered structure. Why should someone
be treated unfairly or not have a fear process simply
because they're on a higher income.
Speaker 4 (06:13):
So when you talk about this sort of unjustified there
when you're talking about the unjustified dismissals part of it.
So if a boss came in and they had enough
of the manager, would this enable the you know Hollywood
movie style coming in your fired, get out, you know
you're out today? You know it would without enable that.
Speaker 3 (06:35):
Well, it's interesting to see because we haven't actually seen
the draft legislation yet. I haven't seen it. I expect
that it wouldn't allow that to happen, and it would
simply be that more lassitude is given to employers dealing
with these high income earners. I think the devil is
(06:58):
going to be in the detail. Really, yes, isn't it?
Speaker 4 (07:01):
But I guess the the the plus side of it
is that if you are in a company and you're
you know, you're spending a long time and you know
the company really well, and then instead of taking a
risk on you to put you in management, because they're
not going to sure how it turns out, they're going
to bring someone from outside of the company that has
a better CV. So, you know, for someone that's been
working a long time in a company shows what they're worth,
(07:21):
this might be an easier path up for you to
prove yourself.
Speaker 3 (07:25):
Oh, definitely, definitely, And we've seen that with the reintroduction
of the ninety day trial periods. Certainly employers that I
work with are more open to giving someone a go,
taking a chance on them because there's less at risk,
and that will likely be the case for more senior
(07:47):
people as well. I guess the one thing that I
found really interesting about the discussions over this proposed change
is that parties will still be able to agree to
have protections in their ployment agreements. And so, you know,
if you're running a comp company and you really want
(08:10):
to hire a rock star with a great reputation, I
wouldn't be surprised if that rock star made it a
requirement if there were protections in the employment agreement.
Speaker 4 (08:22):
But if you're if you're not, if you're not a
rock star, you you might be limiting your chance of
getting the promotion if you insist on that clause.
Speaker 3 (08:32):
Definitely, because you're kind of saying really good point.
Speaker 4 (08:35):
You're kind of saying, you're kind of saying, there's a
chance I might be rubbish.
Speaker 3 (08:41):
That's right.
Speaker 2 (08:42):
Well, Gareth, if this comes in, you're going to be
a busy man, that's for sure.
Speaker 3 (08:46):
Oh yeah, I think so. Interesting time, Yeah, yeah, it.
Speaker 2 (08:50):
Is always good to chat. Thank you very much, Thanks
a lot, guys. That is Gareth Abdenor, the founder and
director of abdenaor Employment Law.
Speaker 1 (08:59):
For more from News Talks B listen live on air
or online, and keep our shows with you wherever you
go with our podcast on iHeartRadio
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