An unfair dismissal occurs where an employee makes an unfair dismissal application and the Fair Work Commission finds that:
- the employee was dismissed, and
- the dismissal was harsh, unjust or unreasonable, and
- the dismissal was not a case of genuine redundancy, and
- where the employee was employed by a small business, the dismissal was not consistent with the Small Business Fair Dismissal Code.
Casual employees are also entitled to unfair dismissal however they must show that they have been employed on a regular and systematic basis with a reasonable expectation of ongoing work.
If the employee is covered by an award or agreement and has served the minimum employment period they will be eligible to make a claim for unfair dismissal.
If the employee is not covered by an award or agreement but earns less than the high-income threshold (which is adjusted annually), they are also eligible to make a claim for unfair dismissal.
Minimum Employment Period
Employees have to be employed for at least 6 months before they can apply for unfair dismissal.
Employees working for a small business have to be employed for at least 12 months before they can apply.
If there was a change of business ownership, service with the first employer may count as service with the second employer when calculating the minimum employment period.
The Fair Work Commission will assess whether an employer has been both substantively and procedurally fair in dismissing the employee.
- Substantively fair: means that the employer had a valid reason for the dismissal and that the appropriate action was taken under the circumstances.
- Procedurally fair: means the employer followed sound employment practices when dismissing an employee.
In assessing whether an employer has been both substantively and procedurally fair in dismissing an employee, the Fair Work Commission will consider whether the dismissal was harsh, unjust or unreasonable.
Harsh, Unjust or Unreasonable
To determine whether a dismissal is harsh, unjust or unreasonable the following factors are considered:
- Whether there was a valid reason for the dismissal related to the employee’s capacity or conduct;
- Whether the employee was notified of the reason;
- Whether the employee was given an opportunity to respond;
- Any unreasonable refusal by the employer to allow the employee to have a support person present;
- Whether the employee had been warned about any unsatisfactory performance before the termination (if relevant);
- The degree to the size of the business and internal expertise would impact on the procedures followed; and
- Any other relevant matters.
Most applications for unfair dismissal settle at conciliation. The conciliation process is private and often may result in a mutual agreement on compensation to the employee.
If the matter proceeds to arbitration (which is a formal hearing determined by the Fair Work Commission), remedies for unfair dismissal may include:
- Reinstatement (getting the job back);
- Compensation (must not be more than 26 weeks’ pay); and
- Non-financial remedies such as a written statement of service.
About Employment Innovations
Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, legal services, payroll solutions, migration, human resource management and HR software.
The information provided in these knowledge base articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.
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