Part I – The Requirements of Unfair Dismissal
When an employee is dismissed from their employment, an important consideration for the parties is determining whether the dismissal was unfair. Failing to consider this factor can lead to issues for an employer and may entitle the employee to compensation.
There are particular circumstances where an employer is well within their right to dismiss a person from their employment, which is usually based on justified and well-established grounds for dismissal.
In some cases, an employee is might have been dismissed on the basis of unsubstantiated allegations or inappropriate personal reasons.
Whatever the circumstance, it is important to note that time limits apply to file an unfair dismissal application.
One function of the Fair Work Commission (‘FWC’) is to prevent unfair dismissals, subject to any exceptions as stipulated in the fair work provisions under the Fair Work Act 2009 (Cth) (‘the Act’).
The provisions of the Act reflect the enshrined principle of ‘fair go all round’ which ensures that the interests of the employer and employee are balanced.
The FWC provides an affordable, accessible and cheaper mechanism to an employee who has been unfairly dismissed, and gives the parties an opportunity to obtain quick relief. The primary goal for the FWC is to reinstate a person’s employment, although this rarely seems to be a viable practical option in most circumstances.
Aside from reinstatement, the usual relief is often compensation, which may be agreed upon by the parties or may be ordered by the FWC. In unfair dismissal claims, the maximum amount of compensation a person can received is limited by the Act to 26 weeks.
National System Employee Protection Requirements
The Act gives specific meaning to employee and employers. For the unfair dismissal protections to apply an employer must be a ‘national system employer’ and an employee must satisfy the definition of a ‘national system’ employee.
A national system employee may be entitled to protection under the unfair dismissal provisions of the Act if the employee:
- has completed the minimum period of employment; and
- earns less than the high-income threshold amount per year; or
- is governed by a modern award; or
- an enterprise agreement applies to their employment.
What is Unfair Dismissal?
To establish unfair dismissal, a person must satisfy the FWC that:
- they have been dismissed; and
- the dismissal was harsh, unjust or unreasonable; and
- the dismissal was not consistent with the Small Business Fair Dismissal Code (if applicable); and
- the dismissal was not a case of genuine redundancy (if redundancy was the reason given for the termination).
Meaning of ‘Dismissed’
The meaning of ‘dismissed’ under the Act occurs if:
- the person’s employment with his or her employer has been terminated on the employer’s initiative; or
- the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
However, the Act provides specific circumstances where a person will be held not to have been dismissed for the purposes of the unfair dismissal protections.
Criteria to Determine Harsh, Unjust or Unreasonable
Once a dismissal is established, the FWC must take into account certain criteria in determining whether a dismissal was harsh, unjust or unreasonable under the Act, including:
- whether there was a valid reason for the dismissal related to the person’s capacity or conduct;
- whether the person was notified of that reason;
- whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;
- any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal;
- if the dismissal related to unsatisfactory performance by the person whether the person has been warned about that unsatisfactory performance before the dismissal; and
- any other matters that the FWC considers relevant.
The FWC must take these factors into account to the extent that they are relevant, although they have a wide scope to include matters which they deem relevant.
Small Business Fair Dismissal Code
The Small Business Fair Dismissal Code only applies to some small business employers. For an employer to be recognised as a small business employer they must not employ more than the maximum amount of employees to qualify as a small business.
The Act prescribes that a person’s dismissal was a case of genuine redundancy if:
- the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
- the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
A person’s dismissal was not a genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within;
- the employer’s enterprise; or
- the enterprise of an associated entity of the employer.
This article has provided a general overview of the requirements of an unfair dismissal claim. It is not legal advice. If you are bringing or defending an unfair dismissal claim, then we recommend that you obtain independent legal advice to ascertain the prospects of your matter.
We offer a free 20 minute consultation to discuss your matter with one our litigation and dispute resolution lawyers.