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Having to fire an employee is never easy. In fact, it’s more difficult than ever and can expose you to a raft of legal ramifications. If your decision is found to be unlawful or unfair you’ll likely face an expensive settlement, severe penalties and/or potential prosecution.

Since the introduction of the Fair Work Act (FW Act) in 2009, employees are far more likely to challenge your decision to dismiss them. In fact, the number of unfair dismissal claims lodged by Australian employees nearly tripled within a couple of years. Another concern for employers is that around 75% of unfair dismissal cases are settled via conciliation with the vast majority of these involving a payout.

Unfair dismissal occurs when an employee is dismissed harshly, unjustly or unreasonably. A dismissal can be unfair for many reasons. For example, if the employee is not notified before the decision to dismiss them is made, if the employee is not given an opportunity to respond to the reason for dismissal, or if the employee is dismissed for unsatisfactory performance but is not warned about their unsatisfactory performance beforehand and given a chance to improve.

Unfair dismissal laws under the Fair Work Act allow a dismissed employee to seek an order from the Fair Work Commission to make the former employer reinstate or compensate the employee because the employee has been dismissed unfairly. Reinstatement refers to an order that an employer reappoint a dismissed employee to the same position he or she held immediately before dismissal, or another position.

The unfair dismissal provisions of the FW Act apply to all national system employers. This means that they apply to all private sector employers in all states and territories except Western Australia (WA). WA private sector employers do not qualify as national system employers unless they are a constitutional corporation.

The FW Act unfair dismissal laws will not apply to you if you are a WA employer who is not a national system employer.

Employees are only eligible to apply for an unfair dismissal claim if they have been employed with you for a minimum of 6 months (or 12 months in the case of a small business employee), and as long as they are covered by a modern award or enterprise agreement, or if they are award- and agreement-free they need to be earning less than $142,000 p.a. (i.e. the 2017–2018 high-income threshold.

Casual employees
can also make an unfair dismissal claim if they have been employed on a regular and systematic basis for 6 months or more (or at least 1 year if you are a small business) and they have a reasonable expectation of continuing employment with you.

If an employee makes an unfair dismissal claim against an employer, the application must be filed with the FWC within 21 days of the termination of their employment. There are some circumstances when a late application may be accepted by the FWC.

So what does an employer do if the FWC notifies it that an ex-employee has made an unfair dismissal claim against them?

The employer needs to respond to the claim by completing the relevant form from the FWC website – stating why it does not believe the dismissal was unfair. If there is an initial matter to raise, now is the time the employer should do that because if it is able to successfully challenge the unfair dismissal claim at this early stage, the applicant’s claim will not proceed and no conciliation or hearing will be necessary. If the initial matter (or objection) is unsuccessful, the complaint will be referred to conciliation. An example of an initial matter is that the employee’s salary was above the high-income threshold and therefore the employee is not eligible to make the claim.

The vast majority of FWC unfair dismissal conciliations are successful. From 2016 to 2017, 78.9% of unfair dismissal conciliations resulted in a settlement of the claim. If a settlement is reached at conciliation, the parties will normally commit the agreement to writing and finalise the claim on the agreed terms.

The safest bet for employers is to ensure that all policies and procedures for termination of employment are watertight. When dismissing an employee, employers must carry out a procedurally fair process and be sure that if a claim of unfair dismissal is made against them that they have records of this process to prove it was undertaken fairly.

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Top stories for Unfair Dismissal

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Ageist sacking was out of ‘respect’, employer claims

Unfair Dismissal

In Leslie Jones v S & Q Group Pty Ltd, the Fair Work Commission (FWC) found that a 74-year-old motel handyman was unfairly dismissed because of his age. He was terminated when the employer appointed a new company director. The […]

By Portner Press on January 14th, 2020

Audi’s lack of HR expertise is ‘astounding’, FWC commissioner says

Unfair Dismissal

Fair Work Commission (FWC) Commissioner Jennifer Hunt has lambasted Audi Australia for a lack of HR expertise, after a dealership service advisor at Audi Indooroopilly was dismissed because his customer service KPI score was in the bottom 50% of all […]

By Portner Press on November 18th, 2019

BHP subsidiary must compensate sex toy prankster for ‘haphazard’ sacking

Unfair Dismissal

The Fair Work Commission (FWC) has ordered that a BHP subsidiary pay compensation to a fly-in, fly-out mineworker it sacked for playing a sex toy prank and partly exposing her breasts in a workplace selfie. While the FWC found that […]

By Portner Press on October 28th, 2019

Reinstatement of result-tampering teacher upheld by Victorian Supreme Court

Unfair Dismissal

Victoria’s Department of Education and Training has unsuccessfully appealed against a Disciplinary Appeals Board decision to reinstate a high school teacher who tampered with students’ academic results. The experienced science and maths teacher was dismissed after it was discovered that […]

By Portner Press on October 23rd, 2019

Imprisoned employee unable to pursue unfair dismissal claim

Unfair Dismissal

The Fair Work Commission (FWC) has dismissed an unfair dismissal application from an employee unable to attend a hearing because he is in prison. In an earlier decision in May, the FWC granted the employee an extension on his 33-day-late […]

By Portner Press on October 21st, 2019

‘Feckless’ IR agent called out by FWC

Unfair Dismissal

Unfair Dismissals Direct (UDD) has come to the attention of the Fair Work Commission (FWC) again, this time because one of its IR advocates lodged an employee’s unfair dismissal application in the wrong jurisdiction. The Perth-based employee approached UDD for […]

By Portner Press on October 16th, 2019

Violent security guard awarded $30K in unfair dismissal claim

Unfair Dismissal

An employee breaching company policy and engaging in serious misconduct is no excuse for an employer not to follow its own disciplinary procedures, the Fair Work Commission (FWC) has recently ruled. Latrobe Regional Hospital in Victoria summarily dismissed a security […]

By Portner Press on September 25th, 2019

‘Very bad employer’ must pay $20k for probation period dismissal

Unfair Dismissal

An employer who apparently believed he had “carte blanche” to dismiss an employee on probation has received a very expensive lesson. Richard Trainer, who runs M4 Marketing in Perth, was hit with a $20,000 fine after the employee filed an […]

By Portner Press on September 16th, 2019

Important decision defines what a leave day is for NES purposes

Unfair Dismissal

The National Employment Standards (NES) in the Fair Work Act 2009 (Cth) provide for a minimum entitlement for all employees (other than casual employees) to 10 days of paid personal/carer’s leave for each year of service with his or her […]

By Charles Power on September 2nd, 2019

Employee who denigrated employer on Facebook unfairly dismissed: FWC

Unfair Dismissal

  An employee who took to Facebook to advertise her disgust with new business owners was unfairly dismissed, the Fair Work Commission (FWC) has ruled. The control room operator had been with her employer for almost 15 years when she […]

By Portner Press on August 30th, 2019