Unfair Dismissal

When is a person dismissed?

Dismissal occurs where an employer has terminated the employee’s employment at the employer’s initiative or the employee was forced to resign because of the conduct engaged in by the employer.

Dismissal generally does not occur where:

• a person is demoted, unless it involves a significant reduction in the employee’s duties or remuneration;
• a person is employed under a contract and the contract comes to an end;
• a person had a training arrangement with the employer which specified the employment was limited to the duration of the training arrangement and whose employment ends at the end of the training arrangement.

What is unfair dismissal?

A person has been unfairly dismissed if the dismissal was:

• harsh, unjust or unreasonable; and
• not consistent with the Small Business Fair Dismissal Code (in the case of employees of a small business); and
• not a case of a genuine redundancy.

What is harsh, unjust or unreasonable?

The following factors must be taken into account when determining whether dismissal is ‘harsh’, ‘unjust’ or ‘unreasonable’:

• Whether there was a valid reason for the dismissal related to the person’s capacity or conduct;
• Whether the person was notified of that reason;
• Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;
• Any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to the dismissal;
• If the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal;
• The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal;
• The degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
• Any other matters that the Commission considers relevant.

What is a small business?

A small business is one that has less than 15 employees. This includes all employees (full-time and part-time) and casual employees that work on a regular and systematic basis.

A small business employer is subject to different rules regarding dismissal of employees. The Small Business Fair Dismissal Code provides protection for small businesses if they abide by the Code.

When is a person eligible to make an application for unfair dismissal?

A person is eligible to make an application to the Fair Work Commission for unfair dismissal if:

• they have completed the minimum period of employment; and
• they earn less than the high-income threshold; or
• a modern award covers their employment; or
• an enterprise agreement applies to their employment.

What is the minimum period of employment under the FWA?

A person is only able to make an application for unfair dismissal if, at the time of dismissal, they have completed the minimum period of employment. This is 6 months or 12 months if the employer is a ‘small business’.

What is the high-income threshold?

The high-income threshold is adjusted annually on 1 July each year. It relates to the annual rate of ‘earnings’ by an employee.

‘Earnings’ include wages, other amounts paid on an employee’s behalf or as the employee directs and the agreed money value of non-monetary benefits.

There is a broad range of benefits that may not constitute ‘earnings’ depending on the circumstances, such as payments which cannot be determined in advance (eg: commissions and overtime in certain circumstances), reimbursements, compulsory contributions to a superannuation fund and fringe benefit tax.

When is a person excluded from relying on unfair dismissal laws?

A person may be excluded from relying on unfair dismissal laws where:

• the person is not an employee because there is no contract of employment, either written or oral (eg: an independent contractor);
• the person has entered into a work contract with a labour hire agency (eg: a nurse who is working for a nursing agency or a security guard working for a security agency);
• a person is on ‘vocational placement’ (where the person is serving a placement with an employer for which no entitlement to remuneration arises);
• A volunteer.

What is the time period for making an application for unfair dismissal?

The time limit for applying for an unfair dismissal claim is 21 days after the dismissal takes effect or any further time the Commission allows if there are exceptional circumstances. It is important to lodge your claim within the 21 day timeframe as there is no guarantee that the FWC will allow an extension of time.

What about State Government and Local Council employees?

Employees and employers of the Queensland Government, as well as local councils are generally covered by the IRA and matters will be heard in the Queensland Industrial Relations Commission (‘QIRC’).

Under the IRA, a dismissal will be unfair if it is harsh, unjust or unreasonable.

When deciding whether a dismissal is harsh, unjust or unreasonable, the QIRC must consider:

• whether the employee was notified of the reason for the dismissal; and
• whether the dismissal relates to the operational requirements of the employer’s undertaking, establishment or service or the employee’s conduct, capacity or performance; and
• if the dismissal relates to the employee’s conduct, capacity or performance, whether the employee had been warned about the conduct, capacity or performance or whether the employee was given an opportunity to respond to the claim about the conduct, capacity or performance.

A state government of local council employee cannot pursue a claim for unfair dismissal if:

• their probation period has not been served (3 months unless otherwise provided);
• they are a ‘short term’ casual employee;
• they were engaged for a specific task;
• they earned over the high income threshold (under the FWA) and no industrial instrument applied and they were not a public service officer with tenure.

The time limit for applying for an unfair dismissal claim is 21 days after the dismissal takes effect or any further time the Commission allows if there are exceptional circumstances.

Get help

Claims for ‘unfair dismissal’ can be complex and factually difficult depending on the circumstances of the matter. Immediate action is crucial if you believe you have a claim for unfair dismissal to ensure your claim is lodged within the 21-day time limit. Should you wish to pursue a claim for unfair dismissal you should seek legal advice from a Gilshenan & Luton employment lawyer as soon as possible after your dismissal.