Unfair Dismissal - There's a Right and a Wrong Way!

An unfair dismissal claim, if upheld, can cost an employer up to six months wages, so it is important to get the whole process right.

Many unfair dismissal claims are upheld because the Fair Work Commission (FWC) found an employer had failed to properly investigate the event or incident which led to the termination of an employee. This has been the case even when the FWC has agreed that the conduct of an employee warranted termination.

When an unfair dismissal claim is lodged, the FWC must determine whether the decision to terminate was “harsh, unjust or unreasonable”:

Harsh – The economic and personal consequences resulting from the dismissal are disproportionate to the gravity of the misconduct.

Unjust – The employee was not guilty of the alleged misconduct.

Unreasonable – The evidence or material before the employer did not support the conclusion that misconduct had occurred.

It is possible for a dismissal to be considered just and reasonable and still be considered unfair because, in the FWC’s view, the decision to terminate was too harsh. Similarly, a termination may not be considered harsh, but could be considered to be unjust or unreasonable. Any of the three criteria which falls short of the standard set by the FWC, can be enough to see a termination deemed to be unfair. Some recent decisions, summarised below, show the considerations applied in these cases and how the concepts of harsh, unjust, or unreasonable may overlap:

EXAMPLE 1

During the COVID-19 pandemic, a child protection public servant claimed on Facebook that the military would remove children from unvaccinated parents and posted a picture of the former NSW Premier depicted as Hitler.

The employee regretted her actions and assured her employer this behaviour would not occur again. Further, she provided a letter from her treating psychologist who stated that her behaviour was likely influenced by her perinatal mood disorder along with significant stressors.

The employee’s actions were found to be serious enough and sufficiently connected to her employment to warrant dismissal. Also, the employee was provided sufficient opportunity to respond to the allegations such that her dismissal was neither unjust nor unreasonable.

However, given the employee’s personal health, dire family financial circumstances and lack of prior misconduct, it was ultimately determined that the dismissal of the employee was harsh. As such, the dismissal was deemed to be unfair.

EXAMPLE 2

An engineer was terminated on the grounds that his work was slow and not up to the standard of a person of his seniority and pay grade.

The FWC agreed that the engineer’s significant underperformance in the last six months constituted a valid reason for dismissal and as such the termination was reasonable. That said, the employer had not given the engineer an opportunity to respond to the allegations of underperformance. As such, the FWC found that the employer had denied the employee due process as he had not been “confronted with the blunt reality that he needed to urgently lift output and the standard of his work or else face being dismissed.” Given these shortcomings in following proper procedure, it was determined that the employee’s dismissal was unjust and, therefore, unfair.

Both of these examples show how even large employers, with dedicated human resources departments, have failed the legislative test. If you are thinking of terminating an employee, it is important that the decision be made calmly after ensuring the necessary steps have been covered to prevent, or help defend, a costly unfair dismissal application in the future.

The MTA can offer advice regarding the processes required to ensure you are compliant with workplace law and can conduct workplace investigations on your behalf. For more information please contact the MTA workplace relations team on 08 8291 2000 or by email on wr@mtasant.com.au