What is unfair dismissal?
A dismissal is unfair if Fair Work Australia is satisfied that:
a) the person has been dismissed; and
b) the dismissal was harsh, unjust or unreasonable; and
c) the dismissal was not consistent with the Small Business Fair Dismissal Code (applicable if the employer employs less than 15 employees); and
d) the dismissal was not a case of genuine redundancy
A genuine redundancy occurs where the person’s employer no longer requires the person’s job to be performed by anyone because of changes in occupational requirements in the employer’s enterprise. It is important to note that redundancy is not genuine if the employee could have been redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer.
Who can claim unfair dismissal?
Under the Fair Work Act there are three classes of employee who can bring about a claim for unfair dismissal. These employees are:
- An employee who has been employed for more than 6 months and whose employer employs more than 15 employees;
- An employee who has been employed for more than 12 months and whose employer employs less than 15 employees and where the Small Business Fair Dismissal Code has not been applied; and
- An employee not covered by an award who earns less than the high income threshold.
Casual employees are not entitled to access unfair dismissal rights unless they can evidence that their employment as a casual employee was on a regular and systemic basis and they had a reasonable expectation of continuing employment with the employer.
What will be considered harsh, unjust or unreasonable?
In considering whether that it is satisfied whether a dismissal is harsh, unjust or unreasonable, Fair Work Australia must take into account:
a) Whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
b) Whether the person was notified of that reason; and
c) Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
d) Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
e) If the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal; and
f) The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal;
g) The degree to which the absence of dedicated human resource management specialist or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal;
h) Any other matters that Fair Work Australia considers relevant.
What remedies are available?
Under the Fair Work Act, the two remedies available are reinstatement or payment of compensation. The amount of compensation is capped to the lesser amount of either 6 months pay or half the amount of the high income threshold. Compensation does not take into account shock, distress or humiliation and may be reduced by any contributory misconduct by the employee. In determining an amount for compensation, Fair Work Australia must take into account the following:
a) The effect of the order on the viability of the employer’s enterprise; and
b) The length of the person’s service with the employer; and
c) The remuneration the person would have received or would have been likely to receive if the person had not been dismissed; and
d) The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
e) The amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
f) The amount of any income reasonably likely to be so earned by the person during the period during the period between the making of the order for compensation and the actual compensation;
g) Any other matter that Fair Work Australia considers relevant.
When must the claim for unfair dismissal be made?
All claims for unfair dismissal must be filed with Fair Work Australia within 14 days of the date of dismissal or within such further period as Fair Work Australia allows taking into account:
a) The reason for the delay; and
b) Whether the person first became aware of the dismissal after it had taken affect; and
c) Any action taken by the person to dispute the dismissal; and
d) Prejudice to the employer (including prejudice caused by the delay); and
e) The merits of the application; and
f) Fairness between the person and other persons in a similar position.
Can a decision of Fair Work Australia in unfair dismissal be appealed?
Unfair dismissal rulings of Fair Work Australia can only be appealed in very limited circumstances. Firstly, a party must establish that there was a significant error of fact in the finding of Fair Work Australia and secondly that an appeal of the matter is in the public interest.