22 February 2015

The PCS Basic Guide to Unfair Dismissals

This is the first of a two-part series on unfair dismissals. Part 1 will look at the basics behind the national unfair dismissal jurisdiction, with a view to assisting your organisation in understanding and responding to these claims. Part 2 will look at some practical tips in the unfair dismissal jurisdiction, arising from some recent case law.

Organisations of all sizes and in all industry sectors experience unfair dismissal applications. Be they at conciliation or hearing stage, unfair dismissal applications can be an emotional rollercoaster for all involved, and often require significant investment in terms of time and money.

The basics

  1. The unfair dismissal jurisdiction is available to most Australian private sector employee
  2. Employees can bring an unfair dismissal application to the Fair Work Commission (“FWC”) within 21 days of their termination becoming effective
  3. Employees must have served the “minimum employment period” (6 months where the employer has 15 or more employees, 12 months if less than 15) to bring a claim
  4. Employees earning over the high income threshold(currently $133,000, excluding super) are not eligible to bring a claim, unless they are covered by an award or an enterprise agreement
  5. Employees whose employment has been terminated because of a genuine redundancy (that is, where their position is no longer required to be performed by anyone because of operational changes, and where applicable consultation/redeployment requirements have been complied with) are not able to bring an unfair dismissal application
  6. Small business employers (employers will less than 15 employees) can (but are not obliged to) utilise the Small Business Fair Dismissal Code, which can then be used as a defence in unfair dismissal procedures
  7. In proceedings, the employee is called the “Applicant”, and the employer is called the “Respondent"
  8. The first step is usually a conciliation by telephone. A large majority of matters settle at or shortly following conciliation or are discontinued
  9. If the matter does not resolve at or following conciliation, the matter is listed for hearing before the FWC

What factors does the FWC consider?

The FWC looks at whether the dismissal, was “harsh, unjust or unreasonable”, with a view to producing a “fair go all round” for all parties.

There are three main factors that the FWC looks at in relation to a dismissal:

Was the dismissal substantively unfair?

  • Was there a valid reason to dismiss?
  • Was the dismissal appropriate given the issues at play? Would a warning have been a more suitable sanction?

Was the dismissal procedurally unfair?

  • Was the employee advised that their employment was at risk?
  • Were any allegations in relation to conduct put to the employee?
  • Was the employee given an opportunity to address these factors/respond to the allegations?
  • Was the employee given the opportunity to have a support person present at any disciplinary meeting?

Was the dismissal otherwise harsh?

  • What effect did the termination have on the individual, and is this appropriate given that person’s age, period of service, prospects of reemployment etc?

The above list is not exhaustive.

What orders can the FWC make?

IF a matter goes to hearing, the FWC will make a binding decision.

The FWC can dismiss matters where they do not consider that the dismissal was unfair.

If the FWC finds that a termination was unfair, they may make a monetary order of up to 26 weeks’ pay, or make an order for reinstatement (with or without backpay).

The FWC can discount orders by virtue of employee behaviour/misconduct and/or to take into account sums earned by an employee since their dismissal (mitigation of loss).

Posted in Legal Advice & Consulting.
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