Join our JFM Law team as we answer your FAQs about unfair dismissals.
Transcript
In what circumstances can an employee make an unfair dismissal claim?
An employee can make unfair dismissal claim if they’ve been employed for longer than six months, or 12 months if they are employed by a small business employer, and they’ve earned less than the high income threshold. The high income threshold goes up every year, so it’s important to check. The more objective criteria for making such a claim is that you have been dismissed in a manner which is harsh, unjust, or unfair, and the Fair Work Act sets out a criteria for determining whether that has happened.
When is an employee unfairly dismissed?
An employee has been unfairly dismissed if their employment came to an end for a different reason other than natural termination. So, for example, if the dismissal was harsh, unjust, unreasonable, or if the employer was a small business employer and the dismissal was inconsistent with the small business fair dismissal code. The key difference is that the small business fair dismissal code applies to small businesses and makes it a little bit easier for them when it comes to dismissing their employees. So, if an employee has been employed by a small business employer for under 12 months, they’re not eligible to make an unfair dismissal claim, whereas for ordinary employers with greater than 15 employees, that is only six months.
So, the next question is, naturally, what and when is a dismissal harsh, unjust, or unreasonable? So when considering whether dismissal was harsh, unjust, or unreasonable, employees should consider whether there was actually a valid reason for their dismissal related to their capacity or conduct, how they were performing at work, and whether the person was notified of that reason, because depending on what award you’re covered by, there’s usually a criteria to consult with the employee and also whether the person was given the opportunity to respond. There’s a whole other range of criteria in the Fair Work Act extending to matters that the court or the Fair Work Commission deems to be relevant. So really, it’s a matter of going in and saying, the was the dismissal objectively harsh, unfair or unjust, using the criteria set out for you?
What is the process for lodging an unfair dismissal claim with the Fair Work Commission?
It’s quite a simple process. So just to get things started, to lodge an application with the Fair Work Commission, you have to get it done within 21 days. But it’s a matter of filling out a form. In that form you set out your details, the details of your employment and the reasons why you say you were unfairly dismissed. It’s not a not a long form and it’s quite detailed in what it does. Once you’ve completed that form, you send that by email to the Fair Work Commission. You pay a small fee, at the moment it’s less than $100, and the Fair Work Commission will get things going for you.
The employer will then have an opportunity to respond, and the case may proceed to a hearing if a resolution cannot be reached. The 21 day time frame is a strict limitation period and there are not many circumstances where an employee can extend this period.
What is the role of the Fair Work Commission in unfair dismissal cases?
In unfair dismissal cases, the Fair Work Commission takes the role of mediator, judge, and court. They hear the arguments from each part. Firstly, they’ll put you on a teleconference with each other, and they’ll try to convince the parties to negotiate a settlement to the claim. And then, if a settlement can’t be reached, the matter will go before the tribunal or the Fair Work Commission and it’ll be heard as if you were going to court for an ordinary litigation claim. If the Fair Work Commission finds that an employee has been unfairly dismissed, it has the power to order the employer to reinstate the employee, compensate the employee for lost wages, or take any other appropriate action to remedy the unfairness.
What is procedural fairness and why is it important in unfair dismissal cases?
Procedural fairness is quite a broad term, but it’s the term given to the employer needing to treat the employee fairly throughout the process of terminating their employment or deciding whether their employment should be terminated. So, for example, where an employee is alleged to have engaged in misconduct, the employer should investigate the allegations of misconduct and determine whether the misconduct actually occurred. Where it is said that the employee is underperforming and is likely to be terminated as a as a result, the employer should sit down with the employee, warn them of the underperformance, discuss performance improvement plans, and just follow a fair process to allow the employee to fully understand and respond to what’s happening at all times. It also promotes transparency and accountability in the dismissal process. It is really important in unfair dismissal cases because the dismissal may be considered unfair if the employer did not follow proper procedures.
What are some examples of procedural fairness in the context of unfair dismissal?
So the one that is discussed quite often is the right for an employee who is being terminated to bring a support person with them to meetings and discussions about the termination of their employment. Other examples of procedural fairness include giving an employee the right to respond to allegations about their performance or conduct, and giving the employee an opportunity to understand where they have been underperforming, and rectify that underperformance before being terminated.
What remedies are available if an employee dismissal is found to be unfair?
So if an employee’s dismissal is found to be unfair, the Fair Work Commission may order reinstatement or compensation. The Fair Work Commission can make orders for a person’s reinstatement by returning them to the position they were in immediately before the dismissal, or a position suitable and comparable to the position they were in immediately before the dismissal. They may also make orders to maintain the continuity of a person’s employment or make orders to remunerate the person for the amount they’ve lost or likely to lose because of the dismissal.
However, the Fair Work Commission can only make orders to compensate the unfairly dismissed employee if they find that reinstatement of the employee is inappropriate. This may occur when there’s a breakdown in relationship and that’s just not possible. So, the amount which the person will be compensated is determined by a number of factors. The compensation is typically calculated with reference to the amount of loss that the employee has suffered or is likely to suffer. So, the most frequently considered element of that is how long is the employee was unemployed between losing their job and regaining new employment. And there are another of a number of other factors considered into that, but that’s the most important part. Another thing to consider is the maximum compensation that the Commission can award under an unfair dismissal claim is 6 months remuneration.
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The information contained in this post is current at the date of publishing – 19 June 2023.