What is considered 'Unfair Dismissal'

The Fair Work Act 2009 provides protection to employees who are unfairly dismissed.

What is unfair dismissal?
An employee will be found to have been unfairly dismissed if Fair Work Australia is satisfied that:

• the person has been 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 (which applies where the employer is a ‘small business employer’).

Dismissal may also extend to circumstances where the employee is forced to resign because of the employer’s conduct.

What factors are considered when determining whether dismissal is harsh, unjust or unreasonable?
A range of factors are considered by Fair Work Australia including:

• whether there was a valid reason for the dismissal related to the employee’s capacity or conduct;
• whether the employee was notified of the reason for dismissal;
• whether the employee was given the opportunity to respond;
• any unreasonable refusal by the employer to allow the employee to have a support person present to assist at any discussions relations to the dismissal;
• if the dismissal relayed to unsatisfactory performance – whether the employee has been warned about that unsatisfactory performance before the dismissal;
• the degree to which the size of the employer’s business would be likely to impact upon the procedures followed in dismissing the employee;
• the degree to which the absence of human resources expertise in the business would be likely to impact on the procedures followed in dismissing the employee;
• an other relevant matter.

What is the Small Business Fair Dismissal Code?
Special conditions apply to ‘small business employers’ - employers with fewer than 15 employees (until 1 January 2011, this is 15 full time equivalent employees, but after that time, it is a simple head count, including part time and long term casuals).

For small business employers, a dismissal will not be considered unfair if it complies with the Small Business Fair Dismissal Code (the ‘Code’).

Under the Code, it is fair to dismiss an employee without notice or warning where the employer believes on reasonable grounds that the employee’s conduct is so serious that it justifies immediate dismissal. This may include serious misconduct such as theft, fraud, violence and serious OHS breaches.

This Code sets out procedures that should be followed when terminating an employee, such as:

• giving the employee a reason why she or she is at risk of dismissal (this must be a valid reason based on conduct or capacity to do the job);
• warning the employee (preferably in writing) that they risk being dismissed if they don’t improve;
• providing the employee with an opportunity to respond to the warning;
• giving the employee a reasonable chance to rectify the problem;
• providing additional training and ensuring the employee is award of job expectations.
• allowing the employee to have another person present to assist in discussions where dismissal is possible.

The Code also provides a checklist to assist employers to comply. The Code can be accessed from the Fair Work Australia website: www.fairwork.gov.au or you can contact HIA for a copy.

What is a genuine redundancy?
It is a defence to an unfair dismissal claim if the dismissal is a case of genuine redundancy, which occurs when the employer:

• no longer requires the employee’s job to be performed by anyone because of changes in the operational requirements of the business;
• has complied with any obligation in an applicable modern award or enterprise agreement regarding consultation about the redundancy.

A dismissal will not be a genuine redundancy if it would have been reasonable for the employee to be redeployed in the business (or an associated entity of the employer).

Exemptions
A person is not considered to have been dismissed if:

• they were employed under a contract of employment for a specified period of time, for a specified task, or for a specified season, and the employment has been terminated at the end of the period, task or season;
• a training arrangement applies and the employment was for a specified period of time or was limited to the duration of the training arrangement;
• the person was demoted but the demotion does not involve a significant reduction in his/her remuneration or duties and he/she remains with the employer.

Which employees are protected by the unfair dismissal laws?
An employee is protected from unfair dismissal if one or more of the following apply:

• a modern award covers the employee;
• an enterprise agreement applies to the employee;
• the employee earns less than the high income threshold (currently $108,300 per year)
  and
• the employee has completed the ‘minimum employment period’ of:
  o one year for a ‘small business employer’
  o 6 months for all other employers.

What remedies are available to an employee who is unfairly dismissed?
An employee who feels they have been unfairly dismissed may make an application to Fair Work Australia seeking:

• reinstatement; or
• compensation (which can be awarded if reinstatement is not appropriate).

The application must be made within 14 days (although Fair Work Australia may agree to extend this if there are exceptional circumstances).

It is recommended that guidance is sought before taking steps to terminate an employee.

For more information, call an HIA Workplace Adviser on 1300 650 620

 _{DISCLAIMER – the above is intended to provide general information in summary form. The contents do not constitute specific advice and should not be relied upon as such. Formal specific advice should be sought by members with respect to particular matters before taking action.}