What is unfair dismissal?

Unfair dismissal occurs when:

1. The employee has been dismissed – the employee’s employment has been terminated by the employer, or if the employer was forced to resign (this is known as ‘constructive dismissal’), or sometimes a demotion can constitute dismissal;
2. The dismissal was ‘harsh, unjust or unreasonable’;
3. The dismissal was not a case of genuine redundancy
4. If the employer is a small business – the dismissal was not consistent with the Small Business Fair Dismissal Code

Who can apply for unfair dismissal?

  1. An employee who has served the minimum employment period:
    • 6 months –  if the employer is not a small business
    • 1 year – if the employer is a small business (a business with less than 15 employees)
  2. An Employee who is covered by:
    • A Modern Award (or an award-transitional instrument)
    • Enterprise Agreement (or an agreement-transitional instrument)
  3. An employee who earns less than the high income threshold (which is currently $142,000 per year)
  4. An employee who has be terminated within 21 days of them making an Unfair Dismissal Application with the Fair Work Commission

What is ‘harsh, just or unreasonable’?

In determining whether the dismissal was ‘harsh, unjust or unreasonable’, the Fair Work Commission will take into account:

  1. Whether there was a valid reason for the dismissal related to the person’s capacity or conduct, and whether they were notified of that reason and given an opportunity to respond;
  2. If the employer unreasonably refused the employee to have a support person to assist in discussions relating to the dismissal
  3. If the employee was dismissed due to performance issues, whether they had been warned about the performance issues
  4. Whether the employer had Human Resources or such expertise to impact the procedures effecting dismissal and the size of the employer’s enterprise which would impact on such procedures
  5. Any other relevant matter

What happens in the employee engaged in serious misconduct?

Serious misconduct is:

  1. conduct that is wilful or deliberate and that is inconsistent with the continuation of the employment
  2. conduct that causes serious and imminent risk to the health and safety of a person or to the reputation, viability or profitability of the employer’s business, for example: theft, fraud, assault, intoxication at work and the refusal to carry out lawful and reasonable instructions consistent with the employment contract

If an employee engages in ‘serious misconduct’, you can terminate their employment on the spot, without giving them the required notice.

However, you need to be very careful managing such circumstances as the Fair Work Commission may find that while there was a valid reason for the dismissal, it was harsh because summary dismissal was a disproportionate response.