LEASING

Unfair dismissal occurs when an employee is dismissed from their job in a harsh, unjust or unreasonable manner.

The Fair Work Act 2009 (Cth) set out the factors that are considered in deciding when a dismissal is considered to be “harsh, unjust or unreasonable.”

Generally, an unfair dismissal application will be successful if you have been dismissed:

• without being given a clear reason; or
• without being given a fair chance to respond to the reasons for dismissal;
• for poor performance, but you were not given clear warnings or opportunities to improve your performance.

Most employees will be able to make a claim for unfair dismissal. If you want to commence an unfair dismissal claim, you must satisfy the following criteria:

Minimum Employment Period

You must have been employed for more than the relevant period of time. The relevant period of time is 6 months, unless your employer is a small business employer (less than 15 employees), in which case the relevant period of time is 12 months.

High Income Threshold

Your annual income must be less than the ‘Unfair Dismissal High Income Threshold’ unless you are covered by an award or enterprise agreement. The high income threshold is set under the Fair Work Act 2009 (Cth) and increases each year on 1 July. As of 1 July 2021, the high income threshold is $158,500 per year.

It is important to note that you are not entitled to make a claim for unfair dismissal if:

• you are on probation at the time of  dismissal;
• you are a casual employee or contractor;
• the dismissal was a case of genuine redundancy;
• the employer was a small business employer which complied with the Small Business Fair Dismissal Code.

The Fair Work Commission will consider the following in determining whether your dismissal was harsh, unjust or unreasonable:

• whether there was a valid reason for the dismissal related to your capacity or conduct (including its effect on the safety and welfare of other employees);
• whether you were notified of that reason and given an opportunity to respond;
• any unreasonable refusal by the employer to allow you to have a support person present at any discussions relating to dismissal;
• if the dismissal related to your unsatisfactory performance, whether you had been warned about that unsatisfactory performance before the dismissal; and
• the degree to which the size of the employer’s business would be likely to impact on the procedures followed in dismissing you;
• the degree to which the absence of dedicated human resource management expertise in the business would be likely to impact the procedures of the dismissal; and
• any other matters that the Fair Work Commission considers relevant.

The remedy you can be awarded depends on the circumstances of your dismissal. 

If the Fair Work Commission is satisfied that you were unfairly dismissed, they will either order compensation or reinstatement. 

Given reinstatement is often inappropriate, there is a good chance that you will be compensated for your dismissal. Where you are entitled to compensation, the amount of compensation that can be ordered is capped at 6 months of pay. 

Note: The maximum compensation cap is generally awarded in the most serious of cases.

There is a strict 21-day time limit for bringing an unfair dismissal claim. If your claim is lodged more than 21 days after your dismissal, it will only be considered by the Fair Work Commission in exceptional circumstances.

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