A dismissal occurs when an employee is terminated at the employee’s initiative, or when the employee is forced to resign because the employer acts in a way which makes continuation of the employment relationship untenable.
What is unfair dismissal?
A dismissal is said to be unfair where:
- an employee is dismissed; and
- the dismissal was harsh, unjust or unreasonable, and
- the dismissal was carried out in accordance with the Small Business Fair Dismissal Code (if the employer is a Small Business; and
- the dismissal was not a case of genuine redundancy.
When deciding an unfair dismissal claim, the Fair Work Commission considers whether a dismissal was harsh, unjust or unreasonable in order to determine whether or not to make an order in favour of a dismissed employee.
The terms “harsh”, “unjust” and “unreasonable” have specific meanings within the unfair dismissal regime. Here some examples of how each term applies in an unfair dismissal dispute: A dismissal may be:
- unjust if an employee was dismissed following allegations of misconduct but the employee was not guilty of the alleged misconduct
- unreasonable if the evidence does not support the conclusion (say, if the evidence showed conduct deserving of a warning but an employee was dismissed instead)
- harsh if the outcome of the employer’s disciplinary process is disproportionate to the gravity of the misconduct.
Sometimes a dismissal may fit into two or more types of unfair dismissal and facts of a specific dismissal may overlap the different types.
Unjust ground for unfair dismissal
The term unjust relates to the truth of the reason for termination. For instance, an employee may have been dismissed for conduct he or she simply did not commit, or the dismissal may have occurred because of an uneven application of the employer’s standards. An example of this is when an employee is dismissed for conduct that is acceptable to the employer (that is, if another employee engaged in the same conduct as the dismissed employee, the other employee would not be dismissed).
“Meredith was terminated after her employer alleged that she forgot to lock the store room at the end of her shift. It later turns out that it was Lexie who was responsible for locking up the store that night. Meredith dismissal was unjust.”
Unreasonable ground for unfair dismissal
The term “reasonable” relates to the reasonableness of the dismissal and the reasonableness of the employer’s conclusions regarding the dismissal. This includes whether or not it was reasonable to decide to dismiss an employee based on the available evidence.
“Jackson was late for his shift one morning because his car had broken down on the way to work. His employer terminated him after he arrived at work, stating that he ‘deliberately and maliciously decided to show up late’ and ‘did not show enough dedication to his job’. Jackson’s dismissal was unreasonable.”
Harsh ground for unfair dismissal
The term “harsh” is given a wide interpretation. The Fair Work Commission takes into account:
- the consequences of termination on the employee (including economic consequences)
- the method of the dismissal
- the timing of the dismissal
- the proportionality of the dismissal with the misconduct alleged.
Other factors of the employee that the Fair Work Commission takes into account include:
- length of service
- qualifications and ability to find employment following termination
- number and age of dependents
- assets and liabilities (debts)
- literacy levels
“Richard is a 62 year old unskilled labourer in a factory. He and his ailing wife live alone and he is the sole provider for his wife. He has been performing poorly over the past year. The employer has placed him on a performance management plan but he has not improved. The employer finally decided to dismiss him and sent him his termination letter whilst he is on personal leave caring for his wife. Richard’s dismissal was harsh”
Richard may be successful with an unfair dismissal claim because his dismissal was harsh given his personal circumstances (age and skill level), along with him being dismissed while on personal leave which meant that he did not have the opportunity to respond to the allegations of the employer.
Who is protected from unfair dismissal?
An employee of a national system employer who has been dismissed is protected from unfair dismissal and can make an application for a remedy if:
- the employee has been employed for a period of at least six months (or 12 months if the employer is a Small Business employer); and
- the employee earns less than the high income threshold (currently $153,000 per year);
- a modern award covers their employment;
- an enterprise agreement applies to their employment.
In Queensland, New South Wales and South Australia, all employees (except most State government and local government employees) are covered by the national system.
In Victoria and the Australian Capital Territory, all employees (except law enforcement officers or executives in the public sector in Victoria) are covered by the national system.
Genuine redundancy is not unfair dismissal
A redundancy is said to be genuine redundancy when that person’s job is no longer needed due to changes in the operational requirements of the employer’s enterprise and the employer has followed consultation requirements within the award or agreement.
Examples of changes in operational requirements which cause a genuine redundancy include:
- downturn is business;
- role originally performed by employee now replaced with machinery/automation;
- completion of a project;
- closure of site or business.
If the Fair Work Commission finds that a dismissal occured as a result of a genuine redundancy, an unfair dismissal application will not be accepted.
When is a redundancy not a genuine redundancy?
- the duties are given to another employee
- the employee is terminated but the job (or a different job with the same responsibilities) is given to a new employee
- the job is outsourced to an external agency
- the job is given to a more qualified person
- the employer did not comply with consultation requirements
Consultation requirements for genuine redundancy
The employer has an obligation to consult with an employee about redundancy where a consultation provision exists in the employee’s modern award or enterprise agreement.
If an employer is obliged to consult with the employee, and that consultation does not take place, the redundancy is not a case of genuine redundancy. The consultation must be genuine and not perfunctory (done for the sake of doing it with no intention to consider the employee’s views). It should be done before the decision to terminate was made. If a decision to terminate the employee had been made before the meeting, the redundancy is not a case of genuine redundancy. Consultation is an opportunity for the employee, or other relevant persons, to influence the decision-maker.
Has any of the following happened to you?
- Have you been denied a support person?
- Did your employer terminate you before you had a chance to respond to the allegations made by the employer?
- Were the allegations by the employer general in nature and not specific enough for you to properly understand what grounds you were being terminated?
The time limit for making an application for unfair dismissal is 21 days from the date the dismissal took effect. If you miss the deadline, you may be ineligible for compensation. We recommend seeking advice immediately after being dismissed in order to improve your chances of success.
If the dismissal is found to be unfair, the first remedy the Commission will consider is reinstatement. The Commission can order that you be returned to your original role with the employer, provided this is what you want. Putting aside your case for unfair dismissal, you should consider how well you get along with your employer and other members of your team and the business.
If returning to employment is not a practicable option, you may be eligible to be awarded compensation of up to (but not exceeding) 26 weeks of pay.
What can we help with – unfair dismissal
IR Advocates can provide a cost-effective way of resolving your dispute. Our fees are scaled to ensure that you receive as much of your entitlements and compensation as possible. We will assist you every step of the way from drafting an initial application right through to conciliation and collection of your entitlements.