What is Unfair Dismissal? Your Australian Legal Guide

In Australia, unfair dismissal refers to the termination of employment in a manner that is harsh, unjust, or unreasonable. Under the Fair Work Act 2009 (Cth), employees may be able to make a claim for unfair dismissal if they meet certain criteria.

To be eligible to make a claim for unfair dismissal, an employee must:

• have been dismissed from their job
• have been employed for at least six months. Or, 12 months if the employee works for a small business with fewer than 15 employees)
• not have been dismissed because of genuine redundancy
• not have been dismissed because of misconduct

If an employee believes that they have been unfairly dismissed, they can apply to the Fair Work Commission. The FWC is the national workplace relations tribunal in Australia, for a remedy. The Fair Work Commission will consider the circumstances of the dismissal and determine whether it was fair or unfair. If the dismissal is found to be unfair, the FWC may order the employer to reinstate the employee or pay compensation.

It’s important to note that there are strict time limits for making a claim for unfair dismissal. So, it’s important for employees to seek legal advice as soon as possible if they believe they have been unfairly dismissed.

Unfair dismissal happens when the employment of an employee is unfairly terminated by an employer. An employee who alleges they have been unfairly dismissed can begin legal action against their employer.

This article is written by Farrah Motley, the Director of Prosper Law and an online employment lawyer.

What is unfair dismissal?

Unfair dismissal occurs when an employer unlawfully and unreasonably terminates the employment of an employee. The termination must be considered harsh, unjust or unreasonable in order to amount to unfair dismissal.

In the context of unfair dismissal in Australia, a dismissal is considered to be harsh, unjust, or unreasonable if it is not fair or valid. This refers to the reason for terminating the employment. It also refers to the manner in which the dismissal was carried out was not fair and reasonable.

There are several factors that the Fair Work Commission may consider. When determining whether a dismissal was harsh, unjust, or unreasonable, they will look at the:

• reason for the dismissal: The Fair Work Commission will consider whether the reason for the dismissal was a valid one. They will also consider whether the employee was given an opportunity to respond to the allegations against them before being dismissed
• nature of the employee’s role: The Fair Work Commission will consider the nature of the employee’s role and whether the dismissal was appropriate given the circumstances
• impact of the dismissal on the employee: The Fair Work Commission will consider the impact of the dismissal on the employee, including their financial and personal circumstances
• procedure followed by the employer: The Fair Work Commission will consider whether the employer followed a fair and reasonable procedure before dismissing the employee, including giving the employee an opportunity to respond to the allegations against them

Ultimately, the Fair Work Commission will consider all the relevant circumstances in determining whether a dismissal was harsh, unjust, or unreasonable.

Harsh

A dismissal is harsh if the dismissal was disproportionate to the conduct that the employee is alleged to have committed.

Unjust

A dismissal is unjust if an employer did not have a valid reason to dismiss the employee.

Unreasonable

A dismissal is unreasonable if an employer acted unreasonably during the dismissal, or did not give an employee procedural fairness.

To meet the legal threshold of unfair dismissal, the termination of employment must be either harsh or unjust or unreasonable. For instance, it only needs to meet one of these criteria.

What are some examples of unfair dismissal?

Here is a summary of what is considered unfair dismissal:

• the employee is terminated for no reason
• the employee is terminated for poor performance but is not told how they have performed poorly or have not been provided with proper training
• the employee is not warned that the termination of their employment is a possible outcome if their performance does not improve
• the alleged poor performance of the employee is not the employee’s fault. A paragraph.
• the employer has prepared a letter terminating the employee’s employment prior to the performance meeting and it is therefore clear that the process was a sham
• performance may be in breach of their employment contract, but a proper process has not been followed by the employer
• an employee is forced to resign (also known as constructive dismissal) because of the conduct of the employer
• the conduct of the employee is not serious enough to warrant termination of employment

These are just some examples. There are many more examples of unfair dismissal and you can speak to a workplace lawyer for more information regarding unfair dismissal.

Factors that are taken into account by the Fair Work Commission

Section 387 of the Fair Work Act 2009 (Cth) sets out a number of matters that the Fair Work Commission must take into account when determining whether the termination of employment was harsh, unjust or unreasonable. These include:

1. whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees);
2. whether the person was notified of that reason; and
3. whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
4. any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
5. if the dismissal related to unsatisfactory performance by the person–whether the person had been warned about that unsatisfactory performance before the dismissal; and
6. the degree to which the size of the employer’s business would be likely to impact the procedures followed in effecting the dismissal; and
7. the degree to which the absence of dedicated human resource management specialists or expertise in the business would be likely to impact the procedures followed in effecting the dismissal; and
8. any other matters that the Commission considers relevant.

A genuine redundancy is not unfair dismissal

If a person’s employment is terminated because of genuine redundancy, they will be unable to obtain a remedy for unfair dismissal.

A ‘genuine redundancy’ is defined in s 389 of the Fair Work Act 2009 (Cth) as being one whereby:

• the person’s employment no longer requires the person’s job to be performed by anyone. For instance, because of changes in the operational requirements of the employer’s business; and
• the employer has complied with any obligation in a Modern Award or Enterprise Agreement that applied to the employment to consult about the redundancy.

Small businesses and unfair dismissal

If a business is a ‘small business’ in that it employs fifteen people or less, there are slightly different rules that apply regarding unfair dismissal.

Those rules are contained in the Small Business Unfair Dismissal Code.

What can employers do to avoid a claim for unfair dismissal?

Employers cannot prohibit an employee from bringing an unfair dismissal claim

There are a number of things that employers can do to try and avoid a claim for unfair dismissal being brought against them. However, it is important to note that, despite an employer’s best efforts, an employee cannot (without signing a deed of release) be prohibited from bringing a claim for an unfair dismissal remedy.

Investigate issues properly

If an issue is raised in relation to an employee, an employer should thoroughly investigate that issue and determine the facts. This is important because if an employer proceeds down the path of dismissal based on incorrect information, then it is likely that the termination of employment will be considered unfair.

An employment law firm can assist employers in investigating workplace issues.

Deeds of release and unfair dismissal claims

A deed of release may be a good option if an employer is dissatisfied with an employee and wishes to terminate their employment. Particularly if they are concerned about the employee lodging an unfair dismissal application.

If an employer needs a deed of release to be prepared, it is imperative to engage a workplace lawyer. Employment lawyers are trained to ensure that deeds of release are enforceable. They must be written in a way that still maintains the employer’s rights against an employee where appropriate.

• offering access to an employee assistance program

• making genuine attempts to help the employee secure alternative employment
• ensuring that the employee is not caught off guard and was aware of issues in the lead-up to the termination
• engaging in open, honest and regular communication

What can employees do if they think they have been unfairly dismissed?

Eligibility to apply for an unfair dismissal remedy

Ensure that you have been employed in your role for at least 6 months.

There is a period that an employee must be employed for when submitting an unfair dismissal application. This is the reason why probationary periods are often set to six months. This is because employers can terminate an employee’s employment for any reason (except discriminatory reasons) during this period. This period increases to 12 months for small businesses.

Submit an application for an unfair dismissal remedy within 21 days

If you are an employee and you think you may have been unfairly dismissed, it is important for you to act quickly. This is because you have 21 days from the date your employment was terminated to bring a legal claim against your employer.

If an employee doesn’t lodge an unfair dismissal application within 21 days, they must seek approval from the Fair Work Commission to extend this period. An employee must be able to demonstrate that there are exceptional circumstances that justified the employee failing to submit the application within the 21-day time period.

Matters that may be considered exceptional circumstances are discussed here.

Ensure that you earn under the high-income threshold

The high-income threshold is determined under the Fair Work Regulations 2009 (Cth). As of 1 July 2021, the high-income threshold is $158,500.

If an employee earns more than the high-income threshold, those employees do not have access to unfair dismissal remedies. Instead, high-income earning employees must seek a remedy against their employer for breach of contract or adverse action.

If you are a high-income earner and believe you have been unfairly dismissed, contact a workplace lawyer to discuss your options.

Ensure that you are not considered to be a casual employee

If an employee is employed on a casual basis, they may not be entitled to an unfair dismissal remedy if they are not also engaged on a regular and systematic basis.

If an employee thinks they are engaged on a regular and systematic basis, even though their employment contract states they are engaged as a casual, the employee can apply for an unfair dismissal remedy and submit these arguments to the Fair Work Commission.

Case law examples of unfair dismissal in Australia

Process of dismissing an employee insufficient

Anderson v Thiess Pty Ltd [2014] FWC 6568

In this case, the Commission found that the dismissal of Mr Anderson’s employment was harsh and reasonable and awarded him $28,000 in compensation. This outcome came to the surprise of many because the conduct of Mr Anderson was particularly poor In that he sent an email to numerous staff that was highly offensive to persons of the Muslim faith.

The reason why the court considered the dismissal was harsh and unreasonable was that:

• Mr Anderson was 65 years of age and would have difficulty obtaining other employment;
• Thiess relied too much on a previous verbal warning given to Mr Anderson for the same conduct; and
• Thiess did not give Mr Anderson enough time to accept that the contents of his emails were inappropriate in the Thiess work environment and to apologise during the show cause process.

The dismissal of the employee was unfair

Morcos v Serco Australia Pty Ltd [2019] FWC 7675

In this matter, the Commission found that the employee had been unfairly dismissed.

The employee was on a rostered day off and had consumed two beers when he was called in to carry out a shift. He was then randomly tested for alcohol, which returned two readings of 0.037 and 0.032 and was then sent home.

The employee worked a shift the next day but was subsequently terminated for coming into work after consuming alcohol, in breach of the employer’s drug and alcohol policy. The Commission found that the employee’s conduct was not serious enough to justify the termination of his employment and his employment was reinstated.

The dismissal process is insufficient and failed to consider factors

Camilleri v IBM Australia Limited [2014] FWC 5894

In this case, the Commission found that the termination of Mr Camilleri’s employment was harsh, unjust and unreasonable and awarded Mr Camilleri 50% of his last remuneration as well as reinstatement. After investigations, the employer discovered that Mr Camilleri had made 141 expense claims that were not approved or authorised.

The Commission came to this decision because they said that there was an excessive delay between the employee’s behaviour and the time of the dismissal. And the employer failed to appropriately consider the employee’s length of service and his offer to reimburse the employer for the expenses.

Not enough notice is given to employees prior to dismissal

Dent v Halliburton Australia Pty Ltd [2014] FWC 5692

In this case, the Commission found that the employee had been unfairly dismissed and awarded the employee 11 weeks’ wages.

The employee was on a first and final warning as a result of using a mobile phone while driving a company vehicle. He was subsequently claimed to have used a company vehicle while using a mobile phone and speeding.

The Commission found that while he was speeding and this would justify the termination of his employment, the employer did not give the employee enough notice prior to the disciplinary meeting and he was therefore denied a fair opportunity to respond to the allegations.

Dismissal reasonable due to employee falling asleep

Sclater v Transdev Harbour City Ferries Pty Ltd [2019] FWC 7968

In this case, the Commission found that a ferry master who had fallen asleep during the time he was supposed to be operating a ferry, was validly terminated.

The employer was not held to have unfairly dismissed the employee. That is because it was a critical part of the employee’s role to remain fully alert when on duty and his failure to do so. Even though the employee took health-related medication. This meant that the employer had a valid right to terminate his employment.

How Can Prosper Law help?

Prosper Law is an online employment law firm. We have helped both employers and employees with their employment law matters.

Having worked on both sides of employment law, we are able to develop strategies to help resolve your employment law matter in the best way.

Contact a workplace lawyer today and ask for a fixed fee quote.

Farrah Motley | Director

PROSPER LAW – Australia’s Online Law Firm

P: 1300 003 077

E: enquiry@prosperlaw.com.au

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