Termination of employment causes significant emotional and financial hardship for employees. Understandably, you may be considering action in response to your dismissal, such as commencing an unfair dismissal application. A range of factors are important in assessing whether you will be successful in such a claim.
At the outset, it is essential to be mindful that you only have 21 days from the date of termination to lodge a claim. This means that as soon as possible after dismissal you should obtain legal advice as to whether you have grounds to lodge an application.
Which employees can lodge an unfair dismissal application?
Not all employees are eligible to lodge a claim. Generally, you can lodge an unfair dismissal application only if:
- You have been dismissed at the employer's initiative (as opposed, for example, to a fixed term employment arranging ending or you resigning);
- You have been employed for longer than 6 months (or 12 months if your employer has fewer than 15 employees);
- You are an employee, rather than an independent contractor;
- Any one of the following apply:
- Your earnings (which includes bonuses and non-monetary benefits like a work car) are below the high-income threshold which is $175,000 for the 2024/5 financial year although this figure is adjusted each financial year; or
- You are covered by a modern award; or
- You are covered by an enterprise agreement.
Navigating these factors can be tricky, particularly determining whether there was a 'dismissal' as well as assessing modern award/enterprise agreement coverage.
For example, while workers who have resigned generally have not been 'dismissed', you may still be eligible if your employer accepted your resignation but made it take effect immediately.
We can assist you to determine whether you are eligible to lodge an unfair dismissal application.
If you are eligible, it is important to consider the key components of the unfair dismissal jurisdiction, which we highlight below.
Valid reason
Employers must have a sound, defensible or well-founded reason to dismiss a worker. A reason which is capricious, fanciful, spiteful or prejudiced is not a valid reason.
Misconduct, poor performance and incapacity to work are common reasons relied on by employers. For example, threatening comments to a colleague, the unauthorised consumption of alcohol while at work and physical incapacity preventing the performance of the inherent requirements of a role for a prolonged period are likely to be valid reasons.
However, not all misconduct, poor performance and incapacity meet the threshold. Incapacity for a short period, particularly due to a work-related injury, is unlikely to be a valid reason. Similarly, relatively minor misconduct like occasional swearing in the workplace might not be a valid reason, particularly if such conduct is generally tolerated by the employer.
Even if a valid reason exists, a dismissal may still be considered unfair, particularly if the dismissal was procedurally unfair or harsh.
Procedural Fairness
In most circumstances, an employer is required to afford an employee with procedural fairness. This obligation may include that:
- The employer must provide the employee with sufficient particulars of the allegations against them (i.e., the alleged misconduct, poor performance or incapacity);
- The employee must be given a sufficient opportunity to respond to allegations;
- The employer cannot unreasonably refuse an employee's request to have a support person at a disciplinary meeting; and
- The employer must give the employee a warning and/or an opportunity to improve performance in certain circumstances.
Although the 'valid reason' component is the most important factor, a dismissal that was procedurally unfair might still result in a successful claim.
For example, in one case, although the employer had a valid reason on the basis that the employee was aggressive to colleagues and refused to return company property, the dismissal was considered unfair. That was on the basis that the employer had already decided to terminate employment prior to providing the employee the opportunity to respond to the alleged misconduct.
Harshness and other factors
Various other factors will be assessed to determine if you have been unfairly dismissed, particularly harshness. Your tenure of employment, employment record (i.e., prior disciplinary matters), any differential treatment of other employees, and the financial/emotional impacts of dismissal are all relevant.
In some cases, a dismissal will be considered 'unfair' on the basis of harshness, even if there was a valid reason to dismiss and the employee was afforded procedural fairness.
What does this mean for you?
There is a lot to assess when considering an unfair dismissal application. You should obtain legal advice as to your prospects in an unfair dismissal case and whether you could obtain the outcome you are seeking, which could include:
- Reinstatement of employment; and/or
- Backpay for time since the dismissal (although there is a requirement to try to mitigate against your loss of income); and/or
- Compensation up to 6 months pay.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
