Unfair Dismissals - The recent statistics and how to defend a

NATIONAL

Unfair Dismissals – the recent statistics and how to defend a claim

Unfortunately, unfair dismissals are becoming a common claim that employers and business owners are facing more and more frequently.

The Fair Work Commission’s annual report for 2020 detailed the following statistics in relation to Unfair Dismissal applications:

• At the Fair Work Commission (FWC) conference stage, 47% of matters settle for under $4,000 and 77% of matters settle for under $8,000. • Reinstatement for unfair dismissal occurred only 5.68% of times at the arbitration stage. • The employee was successful 61% of the time out of 229 hearings conducted. • The median compensation amount awarded in unfair dismissal arbitrations was only $8,704. • 22% of employees were awarded under $4,000 • 49% of employees were awarded under $10,000.

In the scheme of legal claims in their entirety, unfair dismissals are fairly low-cost in comparison. The maximum amount an employee can be awarded in an unfair dismissal claim is 6 months’ pay, although this amount is very rarely awarded by the FWC.

Despite the generally low costs involved, it is always beneficial for the employer to avoid any unfair dismissal claims at all.

Unfortunately, an employer cannot completely quarantine themselves from an unfair dismissal claim. For example, it is not uncommon for an employee to resign and still try their luck in lodging an unfair dismissal claim.

An employer should comply with the requirements of fairly dismissing an employee to give themselves the strongest defence possible. This will aid in ensuring any settlement or compensation awarded is the lowest amount possible.

In order to fairly dismiss an employee, the employer must ensure: 1. There was a valid reason for dismissing the employee; and 2. The employee was afforded procedural fairness.

Valid reason

A valid reason for dismissal may be relating to the employee’s capacity or conduct in relation to their work. A valid reason may include an employee stealing from the business or continuously not meeting KPI’S and breaching workplace policies.

Procedural Fairness

Once an employer has a valid reason for terminating the employee, they must afford the employee procedural fairness.

Procedural fairness may involve the following prior to dismissing an employee. 1. Scheduling and notifying the employee that a meeting will be held to discuss allegations of misconduct or performance issues. 2. Offering the employee to have a support person of their choosing present, if they wish. The employer should also have a witness present who can take notes of the meeting. 3. Explain the issues/allegations to the employee and how this is impacting the business. 4. Give the employee a chance to respond to the allegations. 5. Document the employee’s response. 6. Adjourn the meeting for approximately 10 minutes to consider the employee’s response. 7. Resume the meeting after considering the employee’s response. The employer will advise the employee of the outcome. This could include termination, a warning letter or no action at all. 8. If the employer has terminated the employee, they must provide a termination letter as soon as possible after the meeting. However, employers should not have a preprepared termination letter ready to go. 9. The employer will need to action any final pay or entitlements owed to the employee.