Unfair dismissal; are you eligible to apply?

The national fair work system entitles almost all of Australian employees to be protected from unfair dismissal. If your employer was a company or other incorporated body, it is likely that you are protected from unfair dismissal by the Fair Work Act 2009.  The potential remedies for unfair dismissal include reinstatement if desired and compensation. If you were employed by a sole trader in Western Australia, your claim can be pursued with the Western Australian Industrial Relations Commission. Some States have transferred their unfair dismissal powers to the Commonwealth.

Under the national fair work system there are five qualifying criteria, called jurisdictional elements by lawyers.

They are

1. You must have been dismissed or constructively dismissed while an employee.
2. You must have been employed by a “national system employer” which essentially means a company or other incorporated body (not a sole trader) which engages in trade and commerce or a federal government institution. Local governments and not for profit NGOs can fall into either system depending upon the extent of their commercial activities.
3. Your annual remuneration, technically called your “annual rate of earnings”, must be less than the “high income threshold”, a sum of $167,500 from 1 July 2023 (this sum increases on 1 July each year) OR an enterprise agreement or modern award applies to your employment; if the claim must be pursued in the Wewstern Australian Industrial relations Commssion the “prescribed amount” $187,800 from 1 July 2023.
4. You must have been employed for at least the minimum qualifying period which is 12 months for employees of small business employers or 6 months for non-small business employers.
5. You must make an application for an unfair dismissal remedy to the Fair Work Commission within 21 days of the dismissal (or such further time as may be granted in exceptional circumstances). The relevant time limit in the Western Australian Industrial Relations Commission is 28 days.

• Of course you should take professional legal advice as soon as you can after a dismissal because the above basic qualifications each have various layers of legal complexity.

Other qualifying criteria apply in the Western Australian system. As an example probation is important in the State system but not in the national fair work system, and the State system has a “prescribed amount” rather than a “high income threshold”. The time limits to apply are also different, although the potential remedies are much the same.

Unfair dismissal benchbook

If you feel that you are a victim of unfair, unlawful or wrongful dismissal then I can help. Or if you are an employer with a tricky dismissal issue, I can help. Unfair and unlawful dismissals in Perth and regional Western Australia are a common occurrence in today’s workplaces. Over the years I have provided honest and straight forward advice to both employees and employers covering all aspects of unlawful and unfair dismissal WA.

The common expression wrongful dismissal is not technically a legal description. It is a popular generic and non literal name for a termination of employment by an employer which is wrong and for which something can be done to seek a remedy for the wrong.

However, strictly speaking dismissals which can be the subject of legal proceedings are either unfair, in which event a remedy ( typically reinstatement and/or monetary compensation) can be sought in an industrial tribunal with appropriate jurisdiction, or unlawful, which means that legal action can lie for a dismissal which contravenes a law of the land, most commonly the general protections provisions of the Fair Work Act. Furthermore, the issue of whether an employer’s obligations in a termination of employment fall under the federal fair work system or the Western Australian industrial relations system, which has completely different rules, is often very complicated. Many parties have chosen the wrong jurisdiction and found themselves marooned by the tight time limits without recourse to a remedy.

An unlawful termination may arise from the employer failing to apply the obligations upon the employer provided for by a contract (for example, by failing to give appropriate notice) or in the sense that an illegal act is involved (for example, by dismissing an employee for a prohibited reason such as a temporary absence from work due to illness, or through discrimination on a prohibited ground such as gender, race or age).

Curiously, a dismissal may be perfectly fair by community standards, yet be unlawful whereas a dismissal may be unfair but perfectly lawful. Both of these are included the the common expression wrongful dismissal. Paradoxically, there may be a valid reason for a dismissal but it might still be held to be unfair.

It probably should not be this way, but the termination of employment by employers can be very perilous.

The Fair Work Act 2009 is the Commonwealth government’s employment law bible (so to speak). It contains most of the laws which govern the contemporary legal relationship between Australian employers and employees. It deals with modern awards and enterprise agreements, the collective industrial instruments which apply to most Australian employers and employees, and also contains the national unfair and unlawful dismissal laws.

A small number of Australian employers and employees are covered by the State industrial relations system, and in Western Australian this is provided by the Industrial Relations Act 1979. It covers State government agencies, sole traders and partnerships, and their employees.

Case Study

The following text is drawn from a decision of a highly respected and wise Fair Work Commissioner and summarises some of the fundamental legal principles which attend a determination of an unfair dismissal case.

“The employer must have a valid reason for the dismissal of the employee, although it need not be the reason given to the employee at the time of the dismissal. Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373, 377-8. The reason for the dismissal should be “sound, defensible and well founded” (Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373) and should not be “capricious, fanciful, spiteful or prejudiced”.

The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer. Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681 at 685. The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees).

In cases relating to alleged conduct, the Commission must make a finding, on the evidence provided, whether, on the balance of probabilities, the conduct occurred. King v Freshmore (Vic) Pty Ltd (unreported, AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) Print S4213 [24]. It is not enough for an employer to establish that it had a reasonable belief that the termination was for a valid reason.

In cases, such as the present, where allegations of misconduct are made, the standard of proof in relation to the alleged conduct remains the balance of probabilities but “the nature of the issue necessarily affects the process by which reasonable satisfaction is attained” Briginshaw v Briginshaw (1938) 60 CLR 336 per Dixon J at p 363 and such satisfaction “should not be produced by inexact proofs, indefinite testimony, or indirect inferences” or “by slender and exiguous proofs or circumstances pointing with a wavering finger to an affirmative conclusion”. Put another way, the application of the Briginshaw standard means that I should not lightly make a finding that an employee engaged in the misconduct alleged against him or her. Sodeman v The King [1936] HCA 75; (1936) 55 CLR 192 at 216 per Dixon J……..

Section 387(h) of the Act provides the Commission with a broad scope to consider any other matters it considers relevant.

The basis upon which a dismissal may be found to be harsh, unjust or unreasonable, notwithstanding a finding that there was a valid reason for dismissal based upon conduct in breach of employer policy was explained by the Full Bench majority in B, C and D v Australian Postal Corporation T/A Australia Post 32 in the following terms:

“[41] Nevertheless, it remains a bedrock principle in unfair dismissal jurisprudence of the Commission that a dismissal may be “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason”for the dismissal”: Australian Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1; J Boag & Son Brewing Pty Ltd v John Button [2010] FWAFB 4022; Windsor Smith v Liu [1998] Print Q3462; Caspanello v Telstra Corporation Limited [2002] AIRC 1171; King v Freshmore (Vic) Pty Ltd [2000] Print S4213; Dahlstrom v Wagstaff Cranbourne Pty Ltd [2000] Print T1001; Erskine v Chalmers Industries Pty Ltd[2001] PR902746 citing Allied Express Transport Pty Ltd (1998) 81 IR 410 at 413; Qantas Airways Limited v Cornwall (1998) 82 IR 102 at 109; ALH Group Pty Ltd T/A the Royal Exchange Hotel v Mulhall[2002] PR919205. That principle reflects the approach of the High Court in Victoria v Commonwealth and is a consequence of the reality that in any given case there may be “relevant matters” that do not bear upon whether there was a “valid reason” for the dismissal but do bear upon whether the dismissal was “harsh, unjust or unreasonable”.

[42] Broadly speaking, circumstances bearing upon whether a dismissal for misconduct is harsh, unjust or unreasonable fall into three broad categories:

(1) The acts or omissions that constitute the alleged misconduct on which the employer relied (together with the employee’s disciplinary history and any warnings, if relied upon by the employer at the time of dismissal) but otherwise considered in isolation from the broader context in which those acts or omissions occurred.

(2) The broader context in the workplace in which those acts or omissions occurred. [This may include such matters as a history of toleration or condonation of the misconduct by the employer or inconsistent treatment of other employees guilty of the same misconduct.]

(3) The personal or private circumstances of the employee that bear upon the substantive fairness of the dismissal. [This includes, matters such as length of service, the absence of any disciplinary history and the harshness of the consequences of dismissal for the employee and his or her dependents.]

[43] The determination of whether there was a “valid reason” proceeds by reference to the matters in category (1) and occurs before there is a consideration of what Northrop J described as “substantive fairness” from the perspective of the employee. Matters in categories (2) and (3) are then properly brought to account in the overall consideration of the whether the dismissal was “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason”….

[47] In Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 41 IR 452 Sheppard and Heerey JJ observed (at p 460):

“Employers can promulgate polices and give directions to employees as they see fit, but they cannot exclude the possibility that instant dismissal of an individual employee for non-compliance may, in the particular circumstances of an individual case, be harsh, unjust and unreasonable.”

[48] Thus, a finding that an employee has failed to comply with policies and procedures does not mean that a dismissal is not harsh, unjust or unreasonable. The Commission has consistently applied the proposition that instant dismissal of an employee for non-compliance with his or her employer’s policies may, in the particular circumstances of an individual case, be harsh, unjust and unreasonable: Kangan Batman TAFE v Hart [2005] PR958003, Ross VP, Kaufman SDP and Foggo C at para [51]; Fearnley v Tenix Defence Systems Pty Ltd [2000] Print S6238, Ross VP, Polites SDP and Smith C (Fearnley) at [61]);Atfield v Jupiters Ltd (2003) 124 IR 217 (Jupiters) at [12]-[13].”

Parish v Mt Arthur Coal Pty Ltd (2016) (2016) FWC 6427 decision delivered 13 September 2016 per Saunders C