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Don’t Dismiss Unfair Dismissal Laws

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by Chao Ni, Workplace Relations Lawyer, Mason Sier Turnbull Lawyers

How well do you know unfair dismissal laws? Whether you are an employer or employee, your answer could help save you time and money.

Unfair dismissal laws are an important part of the employment landscape. Fair Work Australia (FWA) allows employees to make unfair dismissal claims against former employers, but employers can defend claims if they can show their actions adhered to the Small Business Fair Dismissal Code (for businesses with fewer than 15 employees), were carried out as part of a “genuine redundancy”, or that the employee had engaged in “serious misconduct”.

So can any employee make a claim? Yes, but several eligibility criteria must be met or the employer can file a “jurisdictional objection” with FWA to have the application dismissed. An employee must:

  • have been employed for a minimum period (one year, or six months if the employer was a small business, i.e. fewer than 15 employees);
  • have been covered by a modern award or industrial instrument, or earned less than the high income threshold ($123,300 per annum from 1 July 2012); and
  • make their claim within 14 days of dismissal.

Successful claims

FWA accepts an unfair dismissal claim if it finds a dismissal was “harsh, unjust or unreasonable”. It can then make orders for an employee’s reinstatement or for compensation. An order for compensation:

  • usually takes into account mitigating factors or steps an employee took to find new employment;
  • cannot include a component for shock, distress, humiliation or other similar damages; and
  • is capped at either 26 weeks’ pay or half the high income threshold, whichever is lowest.

Unfair dismissal cases are held in a cost-free jurisdiction, which means costs are generally not awarded to the winning party. But FWA can make an exception if it believes:

  • a party commenced an application or responded to an application vexatiously (i.e. without reasonable cause); or
  • it should have been apparent to the applicant or respondent that the application or response had no reasonable prospects of success.

What about redundancy or serious misconduct?

As mentioned, small business employers can defend an unfair dismissal claim if they can show the dismissal complied with the Small Business Fair Dismissal Code. We recommended that employers have a working knowledge of the Code, which sets out simple questions to assist with compliance.  

All employers can defend a claim if they can show that the dismissal was part of a “genuine redundancy” as set out in the Fair Work Act 2009. .

An employer can also summarily dismiss an employee without warning if they believe, on reasonable grounds, that an employee’s conduct was sufficiently serious to justify it. Serious misconduct may include theft, fraud, violence or serious breaches of occupational health and safety procedures. And, in some circumstances, it may be appropriate for employers to report misconduct to police.

For more information on unfair dismissal, contact the Herb Fischbacher, Principal of the Workplace Relations team at Mason Sier Turnbull Lawyers today on 03 8540 0200 or herb@mst.com.au