A person has been unfairly dismissed where their dismissal was harsh, unjust, or unreasonable. “Harsh” means that sacking the employee was too severe a consequence for what they did. “Unjust” means that the thing that the person is accused of doing is not factually correct – creating an injustice. “Unreasonable” means that the average person would consider the dismissal as making no sense.
Genuine redundancies are not considered unfair dismissals. However for a redundancy to be genuine, there usually needs to have been consultation with the person affected before a final decision is made to terminate them, and it needs to be the case that the person’s job no longer needs to be performed (by anyone). Where the tasks previously performed by an employee are split up and spread amongst other staff, this is usually considered a genuine redundancy, because the job position has become surplus to the needs of the business. More information about Redundancies can be found here.
Employees who earn under the high income threshold (currently $133,000) and who have been employed for at least one year (for small businesses) or 6 months (for larger businesses), have 21 days to make an application to the Fair Work Commission if they have been unfairly dismissed. The deadline is fairly strict, so employees need to act quickly to bring their claim within time.
A claim is commenced by filing an Unfair Dismissal with the Fair Work Commission. If it suits the worker, they can attach copies of documents such as letters and emails to their application to help explain their case. There is a small administrative fee payable with the claim (about $50). Once an application has been lodged with the Fair Work Commission, it will be forwarded on to the employer who will then have 7 days to respond by filing their comments in response. They may admit, not admit or deny the allegations in the application. Atkinson Vinden Lawyers help employees and companies with drafting these documents, and are able to present them in a way that presents the case clearly using the language the Fair Work Commission will best understand.
Within a few weeks of the claim being filed, the Fair Work Commission holds a conciliation conference by telephone to assist the parties to negotiate a settlement. Over 90% of cases settle through this process. Sometimes the settlement can include an apology, or the provision of a written reference to help the worker with getting work with a new employer.
If a case does not settle through conciliation, then each party has to prepare and serve statements, and there is a hearing, where a decision will be given. Most cases are heard in less than one day unless they are very complicated. The Fair Work Commission has the power to order the reinstatement of the worker, but this outcome is uncommon. More commonly, there is an order for the payment of compensation, which may be up to 26 weeks’ worth of the employee’s wages.
The first thing that employers should do is consider whether any of the threshold criteria for an Unfair Dismissal claim have been breached. If so, they may have a basis to have the claim dismissed. They should consider the following:
This list is not exhaustive; we recommend that you seek legal advice when responding to an Unfair Dismissal claim as there may be legal arguments that are not apparent on initial assessment of an Unfair Dismissal Application. Where a jurisdictional objection is identified, employers can either agree to participate in the Conciliation to try to resolve the case anyway, or attend a Jurisdictional Hearing to attempt to have the matter struck out.
In most cases, it is in the interests of the employer to at least try to settle an unfair dismissal claim. If they do not, they will have to devote time and resources to defending the claim, and it can be very difficult to recover the legal costs incurred fighting the claim.
An Unfair Dismissal Conciliation is a semi-informal negotiation that takes place between the employer (and their legal representative), the employee (and their legal representative) and a Fair Work Commissioner.
The Commissioner’s role during the Conciliation is to facilitate a constructive discussion between the parties. Both parties are afforded an opportunity to present their case and then negotiate a settlement.
The vast majority of Unfair Dismissal claims settle at Conciliation.
A jurisdictional hearing is an opportunity for an employer who has a purported jurisdictional objection, to present their arguments and supporting evidence to the Commissioner. This is a much more formal event and is in most cases more costly. Unlike at Conciliation, the decision making power rests with the Commissioner. Employers need to make commercially considered decisions. Often, attending the Conciliation despite objection is a more cost effective avenue.
Unfair Dismissal is generally a no costs jurisdiction. This means that both parties will be liable for their own legal costs.
In some extreme cases it is possible for the Fair Work Commission to make a costs order. We recommend you seek legal advice on how this may apply to you.
If you would like to know more about unfair dismissal processes, please email us, or call our employment law team on (02) 9411 4466.