Is it Worth Applying for an Unfair Dismissal Claim?

Applying for an Unfair Dismissal Claim?

You just left your job, you are disgruntled and you think your boss dismissed you unfairly. Hold on! Before you decide to lodge an unfair dismissal case; you need to know if you are on the right track or just about to sink deeper into the quagmire of lawsuits.

To many, finding the perfect workplace might seem like an illusion. It is even scarier being dismissed from your job to face unemployment. If the condition of your dismissal is unfavourable, then you should gear up to square things up with your employer.

You can pursue a claim for unfair dismissal for various reasons ranging from compensation, seeking revenge, or helping your coworkers in the workplace. Whatever your reasons, ensure you have the appropriate information to proceed with your claim.

Unfair dismissal, is it worth it? Read on to find your answers.

What Constitutes an Unfair Dismissal?

An employee has been dismissed from their employment when:

  • Their employment has been terminated by the employer.
  • They have resigned their employment but the resignation was coerced by the employer’s actions.

Unfair dismissal occurs when your employer ends your contract of employment, with or without notice. According to the Fair Work Commission, “If you have been dismissed from your employment you may be able to make an application to the Fair Work Commission under either unfair dismissal or general protections dismissal laws.”

You can claim unfair dismissal if you were dismissed for these reasons:

  • Your dismissal is deemed to be harsh, unjust, or unreasonable. For example, a person being terminated for poor performance with no prior warnings after numerous years of continuous service. The criteria for considering harshness can be found in section 387 of the Fair Works Act 2009.
  • Your dismissal was not a case of genuine redundancy.
  • You were employed by a small business, but your dismissal was not consistent with the Small Business Fair Dismissal Code. A Small Business employer is one that employed fewer than 15 employees at the time of your dismissal.

You must have been dismissed to bring a claim for unfair dismissal. The only exception is in cases of constructive dismissal, where your employer’s actions towards you forced you to resign from the job. A dismissal is automatically presumed to be unfair unless your employer can show substantial reasons to justify it.

The high-income threshold for unfair dismissal currently sits at $158,500 as of 1 July 2021. If you earn more than the high-income threshold, you may not be eligible to lodge an unfair dismissal application. A successful unfair dismissal claim can either result in reinstatement, (when you are being returned to your job), or compensation (when you are given monetary payment).

Harsh, unjust or unreasonable – What does it mean?

The Fair Work Commission may find that your dismissal was:

  • Harsh: The dismissal was a disproportionate response to the misconduct/poor performance of the employee.
  • Unjust: The employer did not have a valid reason for the dismissal.
  • Unreasonable: The evidence relied on by the employer did not prove that dismissal was necessary. Or the employer acted unreasonably leading up to the dismissal. For instance, denying procedural fairness.

To apply for an unfair dismissal claim, you need to:

  • Do so within 21 days of dismissal becoming effective. After this period, your case is considered void.
  • Be covered by the national workplace relations system.
  • Have already been dismissed by your employer.
  • Meet eligibility criteria, including the minimum employment period.

What is the minimum employment period?

To be eligible to make an unfair dismissal claim, you must have been employed for at least six months. However, if you were employed by a small business, you must have been employed for at least 12 months. For your employer to classify as a small business, it must have had fewer than 15 employees at the time that you were dismissed.

Can casual employees make an unfair dismissal claim?

It is possible for casual employees to make an unfair dismissal claim. However, their employment must have been characterised by the following:

  • It was regular and systematic (that is, the employee had a regular roster of shifts). And;
  • There was good reason to believe that this regular and systematic pattern of work would continue.
  • Based on this criteria, the Fair Work Commission will objectively consider the manner and frequency of work performed by the casual employee. If it is satisfied that the criteria is met, the unfair dismissal claim will proceed (granted all other eligibility criteria is met).
making an unfair dismissal claim with AWNA couldn't get any easier

What is not regarded as unfair dismissal?

It is pertinent to note that not all dismissal is unfair. An employer can have valid reasons to dismiss you from your workplace such as:

  • Incompetence at your assigned responsibility or task.
  • Gross misconduct at work.
  • Inability to continue working in a position you previously held.
  • Redundancy. A redundancy situation arises if your job ceases to exist and you are not replaced. This is a fair reason for dismissal.
  • If remaining in your position would lead to the contravention of some legal provision, either on your part or on the part of your employer.

I was dismissed for out of hours misconduct – is that unfair?

There are some situations where out of hours misconduct can be used as a valid reason for dismissal. For this to happen, there must be a relevant connection between the misconduct that took place and the employment relationship.

The Fair Work Act 2009 requires that certain criteria must be met. This was outlined in the seminal unfair dismissal case Rose vs Telstra Corporation Limited. It states that the out of hours misconduct must have:

  • Seriously damaged the employee-employer relationship. Or;
  • Damaged the employer’s interests (for example, their public reputation). Or;
  • Was not compatible with the employee’s duty to the employer.

The onus is on the employer to prove that this criteria was met when making the decision to dismiss the employee. It is their responsibility to prove that there is a connection between the out of hours misconduct and the employment relationship.

Unfair dismissal, Is it worth it?

For every case of unfair dismissal, you need to gauge the worthiness of lodging such a claim. Try to ascertain what you stand to gain and more importantly, lose. A handful of worthy reasons you might need to go ahead with an unfair dismissal claim include:

Career Prospects

Getting dismissed from work might harm your future career prospect. You must do your utmost best to clear your name if you believe you have been dismissed unfairly. Part of your conditions for settlement in an unfair dismissal claim can be getting your employer to allow you to resign and possibly receive a reference letter.

Guarantee Confidentiality

When an agreement is reached between an employer and the employee before a formal hearing, such will be documented in a document known as a “Terms of Settlement” or a “Deed of Release”. Such documents formalize the mutual understanding between both parties and guarantee the confidentiality of such proceedings. It will also ensure they do not make mocking comments about each other and prevent future lawsuits. In the event of allegations of misconduct or animosity between the parties, a document of this type will prove to be valuable to both parties.

Get Compensation From Your Former Employer

The hassle of being unfairly dismissed coupled with the emotional distress that follows could be a strong reason to go on with your claim. An interesting part of an unfair dismissal claim is the possibility of financial or monetary compensation. It is noteworthy to highlight that there is a statutory cap regarding the amount of money you can seek. Unfair dismissal claims have a compensation cap of 26 weeks or half the amount of the high-income threshold immediately before the termination, whichever is lesser.

This can be explored during conciliation or can be awarded by a member of the Fair Work Commission if they are satisfied that reinstatement is unsuitable. Compensation is designed to reimburse unfairly terminated employees in place of reinstatement for losses reasonably attributable to the unfair termination. This makes it difficult to award compensation for emotional distress or humiliation.

Denied procedural fairness? You can make an unfair dismissal claim.

Australia’s workplace laws ensure that all workers have the right to procedural fairness. Otherwise known as natural justice, procedural fairness relates to the processes and decision-making that takes place prior to a dismissal.

Procedural fairness must come into effect when an employer makes an allegation against an employee and is considering dismissing them. For instance, if they have committed serious misconduct. It must also come into effect if an employer is considering dismissing an employee for poor work performance.

Prior to making a final decision to dismiss the employee, the employer must:

  • Clearly communicate to the employee the allegation for which they are considering dismissing them for.
  • Give the employee the chance to respond to the allegation to provide their side of the story and raise any potential mitigating circumstances.
  • Allow the employee a sufficient amount of time to respond to the allegation.
  • Sufficiently take into account the employee’s response to the allegation.
  • Take into account all relevant evidence when making a decision to dismiss the employee.
  • Provide the employee with the opportunity to have a support person present during any meetings concerning their potential dismissal.

Factory worker denied procedural fairness wins unfair dismissal claim

There have been many unfair dismissal cases where the Fair Work Commission deemed there was a valid reason to dismiss the employee. However, because they were denied procedural fairness, their dismissal was ruled as unfair.

One such recent unfair dismissal case is Bostock v Austmont Pty Ltd [2022]. In this case, a factory foreman was dismissed due to bullying complaints made against him. The next month, the foreman became sick and took leave, lodging two workers’ compensation claims. One of these claims alleged psychological injury caused by Austmont.

About nine months later, the foreman was dismissed by Austmont, with the reason being that he wasn’t capable of performing his role. The dismissal took place while the foreman was on sick leave for a recurring medical condition.

Fair Work Commission faults employer for lack of procedural fairness

At the unfair dismissal hearing, Austmont provided medical documentation proving that the foreman was suffering from acute depression. Therefore, he was unable to return to work and perform the inherent duties of his role.

Based on this evidence, the Fair Work Commission ruled that there was a valid reason for the foreman’s dismissal. However, it also found that there had been multiple procedural fairness violations leading up to the dismissal.

The Fair Work Commission found that prior to dismissing the foreman, Austmont had failed to inform him of the reason for his dismissal. This meant that the foreman wasn’t afforded the chance to provide a response to the reason.

Fair Work Commission rules the dismissal as unfair

Austmont argued to the Fair Work Commission that it was within its rights to assume that a response from the foreman wasn’t needed. The company believed this to be the case because the foreman was not able to return to work due to his depression. Also, because he had not responded to previous attempts to make contact with him. And because if the foreman had provided a response, Austmont was still planning to dismiss him.

The Fair Work Commission accepted that the foreman’s response was not likely to change the decision to dismiss him. However, under Australian workplace laws, the foreman still should have been afforded the chance to provide a response. The Fair Work Commission believed this was even more imperative given the employee’s 33 years of service to the company.

The Fair Work Commission, despite finding there was a valid reason for the dismissal, ruled it as harsh and therefore unfair.

fairness and workplace rights

What is conciliation?

When your unfair dismissal claim is received by the Fair Work Commission, the first step in the resolution process is conciliation. This is the most likely outcome of an unfair dismissal claim. 78 per cent of unfair dismissal claims achieve a resolution during conciliation, according to the Fair Work Commission FWC.

A conciliation between you and your employer is voluntary. It is organised as soon as your unfair dismissal claim is received by the Fair Work Commission. It typically takes two to five weeks to come to fruition. If you do not wish to proceed with a conciliation, your unfair dismissal claim will proceed as normal.

How does conciliation work?

A conciliation typically lasts for 90 minutes. However, it can potentially last for a day or longer. It is a private meeting that is facilitated by an independent conciliator. Their role is to foster a discussion between you and your employer to determine the facts surrounding your dismissal. Their aim is to determine who may be right or wrong, and for you and your employer to reach a settlement.

A settlement is a written legal document that outlines the agreement you and your employer have come to during conciliation. It requires signatures from both parties. Typically, agreements between the employee and employer consist of an apology from the latter. Or reinstatement of the employee to their role. Or it might include a payout for the employee.

If you and your employer do not come to an agreement during conciliation, your unfair dismissal claim will advance to a determinative conference or formal hearing or with the Fair Work Commission.

Fair Work Commission hearings & conferences

An unfair dismissal determinative conference or formal hearing takes place before a member of the Fair Work Commission. Both these proceedings aim to come to a decision of whether the employee’s dismissal was unfair or not.

A determinative conference takes place in private. The only people in attendance are those that the Fair Work Commission requires to perform its functions. At the conference, a member of the Fair Work Commission will consider the particulars of situation involving the employee and employer.

While a determinative conference takes place in private, the Fair Work Commission will still make public the reasons for a decision reached.

A hearing is typically more formal than a determinative conference and is held in public. They are conducted only if deemed appropriate by the Fair Work Commission. It will come to this decision by considering the views of both the employee and employer. Also, by determining whether a hearing is the most effective and efficient manner to decide the unfair dismissal claim.

Sometimes, it is possible for the Fair Work Commission to decide an unfair dismissal claim without the need for a determinative conference or hearing. They can come to this outcome by considering written submission from the employee and or employer. This outcome is called making a determination ‘on the papers.’ This can only happen if written submission provided to the Fair Work Commission do not contain facts that are in dispute.

Can I represent myself at a conference or hearing?

The Fair Work Commission provides employees the right to represent themselves at a conference or hearing. However, it is not a wise idea. Many employees feel like they are up to the task, but are soon overwhelmed by the pressure and difficulty of taking on their employer.

The situation can seem like smooth sailing until your employer turns up to arbitration with multiple witnesses who are bending the truth and sometimes outright lying.

Not only is the law surrounding unfair dismissals difficult to understand. The unfair dismissal process itself is often a highly stressful ordeal to handle on your own. It may engender certain emotions in you that will hamper your ability to act rationally and objectively.

If there is one way to dramatically increase the likelihood that your unfair dismissal claim will fail, it is to represent yourself. The vast majority of successfully unfair dismissal claims and higher payouts are those of employees who sought representation.

What happens if your unfair dismissal claim is a success?

There are typically two remedies that the Fair Work Commission will decide to pursue if it deems that you were unfairly dismissed. This includes either reinstatement to your job. Or an unfair dismissal payout paid by your former employer.

There are typically two remedies that the Fair Work Commission will decide to pursue if it deems that you were unfairly dismissed. This includes either reinstatement to your job. Or an unfair dismissal payout paid by your former employer.

Reinstatement

When considering a remedy, the Fair Work Commission will aim to reinstatement employer before considering a payout. If reinstatement is deemed appropriate, the Fair Work Commission will order the employer to reinstate the employee to:

  • The role that they previously occupied just prior to their dismissal. Or;
  • To another role no less favourable than that which the employee previously occupied just prior to their dismissal.

It is important to note that the Fair Work Commission is not required to outline a specific position that the employee must be reinstated to. The employer has the right to choose the position.

In some circumstances, the Fair Work Commission may deem that reinstatement is not appropriate. This can be the case if:

  • The employer’s business is no longer in operation.
  • The employee is unable to be reinstated due to their medical issues.
  • The trust and confidence between the employer and employee has been lost. And so much so that the employment relationship has been irreparably damaged.
  • ·Reinstating the employee would most likely result in another dismissal.

Unfair Dismissal Payout

The Fair Work Commission will only order an employer to pay financial compensation if the employee’s reinstatement is not possible. An unfair dismissal payout aims to provide the employee with compensation for any losses that can be reasonably attributed to the unfair dismissal.

When deciding the amount of compensation, the Fair Work Commission will consider:

  • How the compensation order may affect the viability of the employer’s business.
  • How long the employee worked at the employer.
  • The pay the employee would have accrued, or likely accrued, if they had not been dismissed.
  • If the employee has made any effort to attenuate the loss they have endured due to their dismissal.
  • If the employee has accrued any remuneration from work conducted since their dismissal.
  • If the employee is likely to earn any income after an order for compensation is made and before receiving the compensation.

None of these considerations are regarded as having more weight than another by the Fair Work Commission. It can also consider any other factors deemed relevant when deciding on the amount of the unfair dismissal payout.

How much is an unfair dismissal payout?

The median amount of compensation awarded by the Fair Work Commission for successful unfair dismissal claims is $8,704. This median is according to the latest figures from the Fair Work Commission.

There is a cap on the maximum amount of compensation that an unfairly dismissed employee can receive. The amount will be the lower of the following:

The Fair Work Commission has the power to decrease the amount of compensation if it finds that:

  • The dismissal did not cause the employee to endure any financial loss.
  • The employee exhibited bad behaviour (or misconduct), and therefore deserves a decreased amount.

How is an unfair dismissal payout calculated?

To determine the amount of compensation afforded to an unfairly dismissed employee, the Fair Work Commission uses the Sprigg formula. This formula requires the Fair Work Commission to undertake a certain process to calculate the amount of compensation. It requires estimating the amount of pay the employee would have accrued had they not been dismissed. Also, reducing the compensation by the amount of income the employee has accrued since their dismissal.

You can understand the Sprigg formula in more detail on the Fair Work Commission website.

Where To Find Help

The Fair Work Commission tribunal acts as a court to mediate on issues bordering on the employer-employee relationship. It is an impartial body and will not take sides with either party. It provides an alternative dispute resolution strategy to avoid a formal hearing. When you apply with the Fair Work Commission, it is deliberated first in a private conciliation conference by an independent conciliator. This meeting will give grounds for resolution and help you reach a favourable agreement with your employer, saving you the time and money for court proceedings.

In the Fair Work Commission 2018-2019 Annual Report, out of a total of 13,928 applications, 8161 (78%) were resolved in these conciliation conferences. This shows the success rate of these proceedings, however, finding excellent guidance on how best to proceed with a case of unfair dismissal will guarantee your success. That is why we are here.

Person holding a expert advice card

In Conclusion

Filing an unfair dismissal claim is not as easy as it sounds. Without proper guidance and representation, you might end up complicating issues or worse, lose out on your compensation (if need be). You will also need to carefully determine if you left your job due to the unbearable conditions meted out by your employer, giving room for a case of constructive dismissal.

The Fair Work Commission tribunal is an impartial body and you shouldn’t let the misconception of justice being costly deter you from seeking representation and going ahead with your claim. You can work out a no-win, no-fee arrangement with a lawyer or paid agent and go on to clear your name.

If you have just been dismissed from work and you wish to initiate a case of unfair dismissal against your employer, you can call us on 1300 766 700 to help us guide you through the process and highlight the worthiness of such a claim.