Webdiary - Founded and Inspired by Margo Kingston

Webdiarist and cultural observer Irfan Yusuf, whose pieces include An Aussie Mossies' response to Paris burning, Miranda joins 'Team America', Anne and Nada, and Fatima and Yasmin and Safa and Aisha and … Michelle!, is also a Sydney-based industrial and human rights lawyer and occasional lecturer at the School of Politics, Macquarie University.

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Industrial lawyers will be smiling from ear to ear now that the IR laws have passed through. I know I am. I can't wait to cash in on all those small businesses out there who could face a raft of negotiations and claims for "unlawful termination".

Sydney is full of industrial lawyers who used to be personal injury lawyers. Personal injury and workers compensation used to be a bit of a club. Then Bob Carr, that great defender of the rights of poor struggling insurance executives, decided that workers and people injured in car accidents should get next to nothing.

So a whole bunch of personal injury lawyers suddenly had little or no work to do. Well, not now. John Howard is handing out fists full of dollars at $4,000 a piece. That will give many workers at least 10 hours (and if they come to me, 20 hours) of lawyer's time to cause havoc to all those employers with less than 100 punters on the books.

John Howard told us all that small business would be the winner when unfair dismissal laws were abolished. Employer unions, representing bigger employers, agreed. But in reality, unfair dismissal is the best and cheapest option for employers. Little wonder you don't see larger employers complaining a lot about still having to face unfair dismissal claims.

So if you employ less than 100 people, watch out. You will soon have to face claims for which you will be fighting cashed-up lawyers. For some of these claims, you may be ordered not only to pay compensation but also the worker's legal costs.

So why was unfair dismissal so good for employers? Allow me to give you the inside story from the perspective of an industrial lawyer who has acted for both sides. This is the perspective one of Australia's best industrial barristers, Peter Costello, should have given Mr Howard.

When a punter brings an unfair dismissal claim, there are some very severe restrictions. Firstly, the maximum amount of compensation you can get is 6 months. You usually won't get that much unless you have been working for absolutely ages and your dismissal was a real shocker.

But the biggest problem of all with an unfair dismissal claim is that regardless of how much you get, you have to pay your own lawyers. Your former employer doesn't pay a red cent toward your legal bill.

In most State Commissions, the Commissioner hearing the case doesn't have the power to order one party to pay legal fees of the other except in the most extreme cases. Such cases are usually where the worker is ordered to pay the boss's legal bill for making a stupid and frivolous claim.

Now if you were a worker and your union decided not to back you up (or you weren't a union member), your lawyer's metre will be ticking and eating away at any possible award or settlement.

The forms and procedures for unfair dismissal claims are simple to fill out. Once the paperwork is exchanged, the first step is a conciliation before a commissioner. This is relatively informal, and often involves commissioners hitting both sides over the head with dire warnings about legal fees blowing out. Generally the roughest warnings are reserved for the poor punter.

Many lawyers acting for workers are happy to charge a flat fee. I haven't charged flat fees for ages, but back in 1994 we used to charge $900 to take a matter to conciliation.

The entire system is designed to encourage workers to settle for as cheaply as possible. Even if that isn't the intention, it is certainly the result.

So how do we determine how much a worker should get? How do we assess whether an employer's offer is reasonable? The answer often can be summed up in the following 2 golden words: who cares.

Yep, at the end of the day, a nasty employer can dig in their heels, knowing the worker is paying through the nose. I've seen employers make offers that are so bad, I felt like advising my client that he'd be better off committing armed robbery and getting deported to the Balkans.

When an employer behaves like that, the chances of getting anything meaningful without taking the matter to a hearing and spending thousands of dollars on fees are slim. Even if the worker wins the case, his or her legal bill will eat up much of it.

Little wonder so many unfair dismissal claims settled quickly and cheaply. Very rarely have I ever gotten a worker more than, say, 4 months wages as compensation.

But now the government will be handing out $4,000 to employees to make claims for unlawful termination. Many of these employees will choose to bring their claims in various courts and jurisdictions where the employer will be ordered to not only cough up compo but also contribute to the legal bill.

In short, the Howard Government is paying workers $4,000 to make life hell for smaller employers. It looks like tax-payer funded litigation lending, except that you don't have to pay the lender back. The government is subsidising industrial litigation. Thanks, John.

Of course, my entire analysis could be wrong. The government might attach huge strings to the $4,000 grant. Perhaps lawyers will be limited on what steps they can take, if any. Perhaps the grant will be limited to merely getting advice on the prospects of bringing a claim. We won't know until we see the fine print.

But if even $1 goes toward forcing an employer to engage lawyers, that could lead to quite a few dollars out of the employer's wages budget.

Who will benefit? Will it be good for small business? Will Australia's largest source of jobs benefit? Apart from small industrial law firms like mine, I doubt smaller employers will benefit. Their legal fees will go up. And all the arguments used by employer lobbies to justify ending unfair dismissal will prove to be as compelling as a 1-paragraph letter from the ATO.

So on behalf of all those industrial and employment lawyers out there, I would like to thank John Howard and Kevin Andrews for making us all the richer. And to all those small business people who find their legal bills going through the roof, I would advise them to consider enrolling in an LLB program, with a major in employment and workplace relations law.