The impact of unfair dismissal regulation: Evidence from an Australian natural experiment

This paper assesses the outcomes of a unique Australian natural experiment with dismissal regulation introduced in 1996, radically reformed in 2006 and reregulated in 2009. Drawing on a large database of unfair dismissal cases, we assess the impact of dismissal regulation on unfair dismissal claims, how they are resolved, and on the determination of compensation amounts. Regulatory changes affect claims and success rates, but there is little change in compensation payments across the three regimes as legal conventions about their calculation were unaffected by the regulatory changes. One theme through all our findings is the large impact of administrative procedures on outcomes.