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Unfair Dismissal: A Factsheet For Employers

Employment Law, General

Unfair dismissal can be an emotional and stressful topic which can leave your business legally vulnerable. Understanding your rights as well as your employees’ rights is key to minimising risk and ensuring the emotional wellbeing of your staff.

What is Unfair Dismissal?

Unfair dismissal is when an employee is dismissed from their job in an unjust, unreasonable or harsh manner.

‘Unjust’ refers to the reason behind the dismissal being factually incorrect whereas ‘harsh’ suggests that sacking the person was too severe a consequence for what they did. ‘Unreasonable’ means that the average person would consider the dismissal as unreasonable in all of the circumstances.

There are a number of objective and subjective factors that constitute an unfair dismissal but ultimately, the Fair Work Commission decides whether a dismissal is deemed unfair.

When are employees eligible to sue for unfair dismissal?

To be eligible for an unfair dismissal claim, your former employee must:

  • have been dismissed
  • apply to the Commission within 21 days of the dismissal taking effect
  • have been employed for at least 6 months prior to dismissal.
  • be covered by a Modern Award, an award-based transitional instrument or an enterprise agreement
  • have been dismissed in a manner that is deemed unjust, unreasonable or harsh by the Fair Work Commission

To help determine whether an employee has a case for unfair dismissal, the Fair Work Commission have supplied an online quiz.

Small Businesses and Unfair Dismissal

The rules for small businesses differ to the general regulations. For example, the minimum employment period in a small business is one year rather than six months.

A small business is a business with fewer than 15 employees. The Small Business Fair Dismissal Code provides protection against unfair dismissal claims, providing that the employer follows the Code.

What are your options as an employer?

If you’re facing an unfair dismissal claim, it is crucial to ensure that you deal with the case in a professional manner to minimise further risk. The first thing you should do is investigate whether any of the criteria for an Unfair Dismissal claim have been breached. And if so, you could have grounds to dismiss the claim.

To ascertain whether or not you can dismiss a claim you must consider:

– Was the employee dismissed, because if they freely resigned they would have no claim?

–   Was the application lodged more than 21 days after the dismissal took effect?

  • Was the dismissal a case of genuine redundancy?
  • Did the employee earn over the high income threshold?
  • Was the employee employed for less than the minimum period?

How is an Unfair Dismissal case solved?

If the claim cannot be dismissed, there are generally two ways to deal with an unfair dismissal case.

The first is a Conciliation Conference. This is a semi-informal negotiation which takes place between the employer, employee, their legal representatives and a Fair Work officer. The officer’s role is to facilitate a constructive discussion which allows both sides to present their case and negotiate a settlement. The vast majority of Unfair Dismissal claims are settled at Conciliation.

The second way is a Hearing. This is a far more formal and costly procedure which allows the employer to present their arguments and supporting evidence to the Commissioner. In a Hearing, the decision making power rests solely with the Commissioner.

How does Unfair Dismissal impact an organisation?

Aside from the legal costs, an unfair dismissal claim can have a negative impact on a company’s reputation. A long and ongoing case can have a negative impact on your remaining staff’s productivity as well as mental well-being which can ultimately impact your revenue. Resolving any unfair dismissal claim quickly, calmly and professionally is therefore essential to your business’ survival.

Attempting to resolve an unfair dismissal claim on your own without professional legal guidance will be detrimental to your case. If you’re facing an unfair dismissal claim, contact an employment law specialist as soon as possible for professional advice on how to proceed.