Employers still struggling with unfair dismissal
Unfair dismissal applications have continued to rise in recent years, keeping the Fair Work Commission (FWC) very busy. Last year there were nearly 14,800 unfair dismissal applications lodged. This staggering number suggests that many employers are still struggling with the unfair dismissal laws. Although most cases are settled before any formal hearing takes place, they do provide an unproductive distraction for the employer.
Who can apply for unfair dismissal?
Employers should be mindful of who is covered by the unfair dismissal laws. Not all workers are covered by the unfair dismissal jurisdiction. Generally, employees that earn over $133,000 per year are denied access to the unfair dismissal jurisdiction unless they are covered by an award or enterprise agreement.
Casuals who have worked on a regular and systematic basis for more than six months have access to unfair dismissal.
In order for an employee to be covered by the unfair dismissal laws they must have been in employment for a period of 6 months for most employers and 12 months for small business. Employers should ensure that they make an informed decision about whether they want to retain the new employee prior to this period ending.
What is considered unfair?
A termination will be considered unfair if it was ‘harsh, unjust or unreasonable’. The factors that the FWC must take into consideration in determining whether the termination was unfair include:
- Whether the employer had a valid reason based on the employee’s conduct or capacity
- Whether the employee was notified of that reason and given a reasonable opportunity to respond before a decision was made to terminate
- If the reason for dismissal is unsatisfactory performance, whether the employer gave any warning about it
Each case is decided on a case by case basis and no factor described above is determinative. However, there are numerous areas where employers are continuously getting it wrong when it comes to terminating employment.
Where do employers get it wrong?
Most employers understand that there must be a valid reason for the dismissal of an employee. However, it seems that they fail to realise that a termination may still be considered harsh even though a valid reason exists.
For example, a recent case involved the termination of a truck driver for breaching the company’s mobile phone policies. The FWC held that the employee had been harshly dismissed because the employer failed to take into consideration the circumstances of the driver and the incident in question.
The above case indicates that a company may not always rely on a zero tolerance policy to justify the termination of an employee. It also demonstrates that although an employer may have a valid reason for termination (breaching company policy), the termination might still be deemed harsh by the FWC.
Therefore, it is important that the employer is able to demonstrate that they have taken careful consideration of the individual incident, the surrounding circumstances and any other mitigating circumstances (e.g. employee’s length of service, employee’s record etc.) prior to dismissal.
Employers should also provide ample opportunity to their employees to respond to alleged misconduct or underperformance prior to dismissal. Failing to do so might suggest that the dismissal was unfair.
If you require any further information in regards to unfair dismissal, contact the team of lawyers at The Quinn Group on (02) 9223 9166 or submit an online enquiry.