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Unfair dismissal - does it apply to you?

January 25, 2019

Dismissal from employment occurs not only as a result of the employer directly sacking the employee, but also occurs when an employee is ‘forced’ to resign because of the employer’s actions, for example the employer has not paid wages.    

The Fair Work Act provides remedies for workers who have been ‘unfairly’ dismissed if the worker successfully makes an Unfair Dismissal Claim.  This claim must be lodged via the Fair Work Commission’s website within 21 days of the dismissal taking effect.

 

So what is Unfair Dismissal? 

Under the Act a dismissal is ‘unfair’ if it is either ‘harsh, unjust or unreasonable’, concepts that have been the subject of many court cases.

 

When making a finding of unfair dismissal the Fair Work Commission looks at the dismissal in all its circumstances.  Examples of dismissals considered to be unfair include: where the dismissal is disproportionate to the seriousness of the misconduct - the punishment does not fit the crime (harsh); where an employer dismisses an employee without a valid reason, for example the employee was not guilty of the alleged misconduct (unjust); or where the employer does not have enough evidence to support their decision to dismiss (unreasonable).

   

There are two additional issues worth noting in relation to the unfairness of a dismissal.  Firstly if an employee’s dismissal is a result of them being forced to resign because of the employer’s actions, then the logical consequence of this is that the dismissal was ‘harsh, unjust or unreasonable’.  Secondly, even if an employer is entitled to dismiss the employee, for example for serious misconduct, the dismissal may still be found to be unfair if the process of terminating their employment was not ‘procedurally fair’.  This means that the employee must be notified of the reason for their dismissal, must be given an opportunity to respond to the reasons for the dismissal, and must be allowed to have a support person with them during any discussions.  

 

Eligibility

It is important to note that an Unfair Dismissal claim is only available to a specific group of employees:

  • National System Employees (in NSW this means those employed by private enterprise);

  • employees earning below $145,400 annually;

  • those who have been employed for more than 6 months (or one year if employed by a small business employer);

  • permanent employees (or long-term casuals).

Unfair dismissal claims are not available to employees who have been dismissed because their employer no longer requires the work they were hired to do to be performed – genuine redundancy.

 

Small Business Code 

Small businesses (businesses with fewer than 15 employees) have a set of rules for dismissal which are set out in the Small Business Fair Dismissal Code (the Code).  If the employer follows the Code and can provide evidence of this, the dismissal may not be considered harsh, unjust or unreasonable.  

 

Remedies

It is also important to note that the Fair Work Commission is constrained by the types of remedies it can award.  These include reinstatement (although not always appropriate or desirable once an unfair dismissal claim has been brought), monetary compensation which is capped at 26 weeks pay, and non-monetary items such as a statement of service.

 

Process 

Once an application is lodged, the employer is given a chance to respond.  The first stage of the process is for both parties to attend conciliation.  Like a mediation, an experienced conciliator brings the parties together in a conversation to explore if a settlement can be reached without needing a conference or hearing. Most matters settle at this stage.  If it is not resolved, the matter will proceed to a hearing where a member of the Fair Work Commissioner will decide whether the dismissal was fair or unfair, and what remedy to award.

 

First steps: legal advice.  It is not necessary for a party to be represented by a lawyer when lodging the application and appearing before the Commission, and many parties choose to represent themselves.  However an Unfair Dismissal claim may not be the best course of action to take so that it is important to seek legal advice early in the process.  

 

Kate Simpson at Moin Morris Schaefer can assist both employees and employers by determining the complexity of the matter, providing advice about rights and obligations, and advising on the best course of action to take.

 

More information can be found on the Fair Work Commission’s website: https://www.fwc.gov.au/termination-of-employment/unfair-dismissal