When a person is dismissed from employment, the dismissal may either be fair or unfair. Fair dismissals are those made because of proper reasons and cannot be challenged. However, unfair dismissals are those that are harsh, unjust or unreasonable and may be challenged in the Fair Work Commission. Unfair dismissal is governed by the Fair Work Act 2009 (Cth).
If a case does not constitute unfair dismissal, there may be a claim under the ‘general protections’ of the Fair Work Act 2009 (Cth) if, for example, a dismissal was due to a discriminatory reason.
A copy of the Fair Work Act 2009 (NSW) can be found here.
Who is Protected?
Under the Fair Work Act 2009 (Cth) s 382, a person is protected from unfair dismissal if their period of employment is greater than the ‘minimum employment period’ and one of the following applies:
- The person is covered by a ‘modern award’;
- The person is covered by an ‘enterprise agreement’; or
- The person’s income is less than the ‘high income threshold’.
The ‘minimum employment period’ is one year for small businesses (defined in the Small Business Fair Dismissal Code as businesses employing fewer than 15 employees) or 6 months for other businesses under Fair Work Act 2009 (Cth) s 383.
The current ‘high income threshold’ is $175,000.00 (calculated as the full-time equivalent income) for FY 2024-25 financial year. The threshold was $167,500.00 for FY 2023-24 (which applies to dismissals that occurred in FY 2023-24).
What is Unfair Dismissal?
Unfair dismissal occurs if the dismissal is harsh, unjust or unreasonable, the dismissal was not a case of genuine redundancy and the dismissal was not consistent with the Small Business Fair Dismissal Code (if applicable): Fair Work Act 2009 (Cth) s 385. Relevant factors for determining whether the dismissal was harsh, unjust or unreasonable include whether there was a valid reason, whether the reason was communicated, whether there was an opportunity to respond and whether there had been warnings (if the dismissal was related to performance): Fair Work Act 2009 (Cth) s 387.
In addition, if the worker is covered by a ‘modern award’ or ‘enterprise agreement’, there may be additional procedures or conditions if an employer wishes to make an employee redundant.
The Small Business Fair Dismissal Code governs unfair dismissal for small businesses, defined as businesses employing fewer than 15 employees, and provides additional requirements.
Under the Code, dismissal without notice or warning may occur if the employer reasonably believes that employee’s conduct constitutes serious misconduct e.g. theft, fraud, violence and serious breaches of occupational health and safety procedures. It is sufficient (but not essential) that an allegation of theft, fraud or violence be reported to the police for the dismissal to be deemed fair.
In all other dismissals under the Code, the employer must provide a reason for dismissal. In addition, there must be warnings to the employee (preferably in writing but the warnings may be verbal) about the risk of being dismissed if there is no improvement before dismissal, and the employer must provide the employee with an opportunity to respond and a reasonable chance to rectify the issue.
How do I Apply for Unfair Dismissal?
Under Fair Work Act 2009 (Cth) s 394, applications for unfair dismissal must be made to the Fair Work Commission within 21 days from the date the dismissal takes effect. This may or may not be the date that the dismissal is communicated to the employee.
If successful, the Fair Work Commission may make an order of reinstatement under Fair Work Act 2009 (Cth) s 391 or an order for compensation in lieu of reinstatement under Fair Work Act 2009 (Cth) s 392.
If you have any queries, please do not hesitate to contact us at admin@valorumlaw.com.au or voregan@valorumlaw.com.au. Our employment lawyers are on hand to assist you in navigating unfair dismissal claims, and proceedings in the Fair Work Commission and in other courts and tribunals.
The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.
Contributors: Harry Chen
