Your Essential Guide to Unfair Dismissal
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Most workers in Australia are protected from unfair dismissal by the provisions of the fair work act 2009. Employees, rather than contractors, are entitled to commence unfair dismissal proceedings. ‘Employees’ also includes casual employees. It is important to remember that just because an individual is referred to as a ‘contractor’, does not necessarily mean that they are precluded from commencing unfair dismissal proceedings. Whether an individual is considered to be an employee or a contractor is not determined by their title or even by the wording of their contract, but rather by considering a number of factors such as: • Whether the worker controls how and when work is performed • Whether the worker is provided with tools, equipment, uniforms or business cards • Whether the worker is paid a periodic wage or for invoices upon the completion of a task In fact, employers will often use the term ‘contractor’ to obscure the nature of the employment relationship. Such workers are routinely held to be employees by the Fair Work Commission.
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Table of Contents:
01 02 03 04 05 06 07
What is the Fair Work Act and who does it apply to? What considerations are there when claiming unfair dismissal? What makes a dismissal unfair in the first place? What is considered to be a valid reason for unfair dismissal? When are warnings given and in what circumstances? What is a genuine redundancy? When making an unfair dismissal claim what time limits apply?
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01
What is the Fair Work Act and who does it apply to?
The Fair Work Act applies to people who are employed by employers who are defined in the Act as ‘National System Employers’. Some of these categories include:
It’s important to note that the state and local governments of Queensland and New South Wales are excluded from this system.
• Commonwealth Government Employers
To use the benefit of the unfair dismissal provisions, an employee must meet the following criteria:
• Private sector employers in both Queensland and New South Wales
• For employers with more than 15 employees - at least 6 months employment
• All employers in Victoria and the ACT (with the exception of some high managerial public service positions)
• For employers with less than 15 employers - at least 12 months employment
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02
What considerations are there when claiming unfair dismissal?
The high-income threshold: To be entitled to commence unfair dismissal proceedings, the employee must earn less than the high-income threshold or be covered by a modern award or enterprise agreement. This generally refers to a base salary and various types of bonuses and allowances that may be treated differently in determining whether an employee falls under the threshold. There are certain cases where the employee earns significantly more than the high income threshold but is covered by a modern award or enterprise agreement. Constructive dismissal: To be eligible for unfair dismissal, the dismissal must be initiated by the employer. There is one exception where the employee has no choice but to resign due to the conduct of the employer. This is known as constructive dismissal.
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03
What makes a dismissal unfair in the first place?
The Fair Work Act states that a dismissal is unfair when characterised as at least one of the following:
To determine whether a dismissal is harsh, unjust or unreasonable the Fair Work Act sets out the following criteria (among others):
Harsh - Where the dismissal was not proportionate to the employee’s misconduct and constituted and overreaction.
• Whether any warnings were previously given regarding unsatisfactory performance
Unjust - If there was no misconduct on the part of the employee or such misconduct was trivial.
• Whether the employee was notified of the reason for their dismissal
Unreasonable - Where the decision of the employer to terminate the employee appears to be unreasonable in all circumstances.
• Whether the employee was given an opportunity to respond to the reason given
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04
What is considered to be a valid reason for unfair dismissal?
The first point for the Fair Work Commission to consider in determining whether a dismissal is unfair or not is whether a valid reason exists for the dismissal in the first place. The dismissal cannot simply be at the whim of the employer. Some examples of reasons which have been held by the Fair Work Commission to be valid in the past are as follows: • • • • • • • • •
Dishonest conduct and lying to superiors or co-workers Embezzlement of monies or theft of the employer or co-workers property Endangering the safety of co-workers Repeatedly breaching the policies and procedures of the employer Abusing co-workers or clients Failing to follow the clear direction of a superior Damaging the reputation of the employer Continued poor performance Being consistently absent from work without a valid reason
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05
When are warnings given and in what circumstances?
In circumstances where the reason given for an employee’s dismissal is connected with their performance (as opposed to a serious misconduct issue), it is usually necessary for the employer to give the employee a warning about their poor performance. There is a common misconception that three warnings are required to be given, however this is not necessarily the case as what constitutes a reasonable degree of warning will depend upon the circumstances.
Following the issue of the warning, the employer must generally allow the employee with a reasonable period of time in which to improve their performance. Where a warning has not been given or a reasonable time period has not been allowed to improve performance, the Fair Work Commission will often find the dismissal to have been harsh, unjust or unreasonable and therefore unfair.
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06
What is a non-genuine redundancy?
In addition to dismissals deemed to be harsh, unjust or unreasonable, there is a further category of dismissals which may be considered to be unfair dismissals by the fair work commission. This category is known as ‘nongenuine redundancies’, which occur where an employee is ‘made redundant’ in circumstances where a genuine redundancy does not exist on the facts. A redundancy is only genuine if the following three factors exist: • The employer no longer requires the employee’s job to be performed at all due to operational changes • The employer complied with any redundancy provisions in the relevant modern award or enterprise agreement • It was impossible to re-deploy the employee into another job within the employer’s business or an associated entity
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07
When making an unfair dismissal claim what time limits apply?
Strict time limits do apply for employees wishing to lodge an unfair dismissal application. The application must be lodged within 21 days of the date upon which the dismissal took effect. There are only extremely limited exceptions to this rule therefore, it is critical to seek legal advice immediately upon a dismissal. Protecting people is a big part of what we do, if you need to speak to someone regarding an unfair
dismissal claim, follow the link through to our contact page at www.forgelegal.net/contact and we will reach out to arrange an appointment to further discuss your circumstances.
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