Eastern Commercial Lawyers

Unfair Dismissal - is your business protected from unfair dismissal claims?

21-May-2011
The introduction of the Fair Work Act and the new unfair dismissal laws in July 2009 has resulted in a significant increase in coverage of employees within the unfair dismissal claims jurisdiction.

Since that time, statistics show that there has been a significant increase in unfair dismissal claims against Employers. In the Fair Work Australia Annual report tabled in parliament in October 2010, it was revealed that applications relating to termination of employment drastically increased by over 63% to 13,054 in the 2009/2010 financial year of which almost 10,000 were unfair dismissal cases (the others were adverse action claims etc).

There are a number of steps Employers can take to avoid and mitigate against the risk of such claims. Employers should have that adequate policies and procedures are in place to ensure that substantive and procedural fairness is afforded to employees at all times, who are subject to performance management or disciplinary action which may lead to dismissal. The consolidation of state awards into modern awards has resulted in many cases with modern awards that give little guidance on steps that should be taken to afford procedural fairness in the context of disciplinary action. This makes the task for Managers more difficult and it has become even more important to ensure that adequate, up to date written policies and procedures are in place to give appropriate guidance for managers.

Training of relevant managers to carry out performance management/disciplinary action is critical to ensure fairness and compliance with procedures and ultimately, such steps may give rise to a defence if a claim is lodged with Fair Work Australia.

Fair Work Australia (FWA) deals with two main types of dismissal applications: Employees have the option of filing an application for unfair dismissal or an application relating to breach of the 'general protections' (ie adverse action).

The focus of this article is the greater area of risk being applications for unfair dismissal.

What is unfair dismissal?
An unfair dismissal occurs where an employee makes an unfair dismissal remedy application and Fair Work Australia finds that:

the employee was dismissed, and
the dismissal was harsh, unjust or unreasonable, and
the dismissal was not a case of genuine redundancy, and
the dismissal was not consistent with the Small Business Fair Dismissal Code, where the employee was employed by a small business.

A small business is:

A business that employs less than 15 full-time equivalent employees at the time of dismissal, and

Who can make an unfair dismissal remedy application?
To make an unfair dismissal remedy application an employee must be:

covered by the national unfair dismissal laws, and
eligible to make an application.
The application must be lodged within 14 days of the dismissal coming into effect.

To be eligible to apply an employee must, amongst other things, have:

completed a minimum employment period of at least six months (one year in the case of a small business employee), and
be covered by an award or agreement if they earn more than $113,800 a year (this amount changes annually).
Objections to unfair dismissal applications

An employer can object to an unfair dismissal application on the basis:

the applicant was not unfairly dismissed.
the application was lodged with FWA outside of the prescribed time limits
the applicant is not covered by the unfair dismissal laws or is not eligible to make an application; or
the application is frivolous, vexatious or has no reasonable prospects of success.
Remedies for unfair dismissal

If Fair Work Australia is satisfied an employee was unfairly dismissed then it may order the employee's reinstatement, or the payment of compensation to the employee if satisfied that reinstatement is inappropriate.

If you require any assistance or advice concerning performance management, disciplinary action or with respect to an unfair dismissal claim, please contact John Murray, Partner of our office on 0414 294 260 or by email to john.murray@eclawyers.com.au

Back