Unfair dismissal matters can be complex and frustrating for both employers and employees alike. Since the commencement of the Fair Work Act in 2009, employers have had expanded responsibilities to ensure they correctly terminate employees and more employees are able to successfully make unfair dismissal claims.
At the same time employers have narrower exceptions when they’re defending claims.
Terminating a person’s employment is usually stressful and upsetting for everyone concerned, so it’s always important to understand when and how it can be done in a fair and appropriate manner.
Unfair dismissal can also incorporate far reaching issues including employment type, award and enterprise agreement coverage, time limits for claims and the provisions of the legislation.
In addition, the definition of ‘dismissal’ can include a situation where a person resigns but was forced to do so because of conduct, or a course of conduct, engaged in by their employer. This is commonly referred to as ‘constructive dismissal’.
What remains after the legislative changes is that a dismissal must be harsh, unjust or unreasonable for it to be an unfair dismissal under the Act. The primary remedy is said in the Act to be reinstatement, but in practice this does remain the exception rather than the rule. More often than not, compensation is ordered – the Fair Work Commission can order compensation of up six months of the employee’s salary.
There are three elements to a genuine redundancy:
Research by Benoit Freyens, assistant economics professor at the University of Canberra, and Paul Oslington, economics professor at the Australian Catholic University, found that in the change from the Workplace Relations Act 1996 to the Fair Work Act:
Employers need to be vigilant in conforming to process while dismissing somebody. Even when the employer believes they have sufficient reasons to justify dismissal, such as theft. They need to follow the correct process – such as providing warnings and collecting documentary evidence. In the absence of this process it’s very easy to formulate an unfair dismissal claim on the basis of a lack of fair process.
For employers the best way to avoid claims of unfair dismissal is to make sure that your organisation and your employees really understand their obligations under the Fair Work Act when terminating someone’s employment. It also means there should be an internal review of the firm’s policies.
That said, only about 1% of unfair dismissal applicants to the Fair Work Commission successfully achieve reinstatement through arbitration. The most common outcome is a conciliated settlement. Understanding unfair dismissal claims helps parties optimise their outcome in what can be a confusing system.
We represent both employers and employees so if you or your organisation needs assistance or advice on how to proceed please call on (02) 9274 8820 or email email@example.com.