Technically there are two distinct types of unlawful dismissal in fair work law. The first is common law unlawful dismissal, which is the dismissal of an employee in a manner or on terms which is a breach of the employee’s contract. Examples may be where an employer summarily dismisses an employee on the grounds of serious misconduct when the employee’s conduct does not warrant summary dismissal. In that case there would be a breach of contract and the dismissal would be unlawful in the sense that common law contract law would have been contravened. If the employee is protected from unfair dismissal, he or she could launch an unfair dismissal case and sue for breach of contract, although most aggrieved employees in that situation, if properly advised, would no doubt choose one or the other.
The second type of unlawful dismissal is statutory unlawful dismissal, that is to say the dismissal is unlawful because legislation says that it is. The contravention and potential remedy is more correctly known as an unlawful termination dispute.
Under the Fair Work Act, which of course covers most Australian employees, it is provided that an employer must not terminate an employee’s employment for various prohibited reasons. Those prohibited reasons are very similar to (but not precisely the same as) the prohibited reasons in the general protections provisions of the Act for the taking of unlawful adverse action.
However there are a number of fundamental differences between unlawful adverse action and unlawful dismissal, the most prominent being that the former is based upon the corporations’ power of the Australian Constitution and the latter is based upon the ILO convention concerning Termination of Employment at the initiative of the Employer made in Geneva on 22 June 1982, to which Australia is a signatory.
The most prominent (but not the only) jurisdictional requirement for the application of the general protections is that the alleged contravention is by or involves a “constitutionally-covered entity” (Fair Work Act secs 338-339) whereas unlawful dismissal potentially covers all Australian employers (sec 772). The time limit for making an application to the Fair Work Commission is 21 days (sec 774) and like a general protections’ application, the Fair Work Commission will deal with the dispute first by a conference (where conciliation is the preferred but not the only mandated process; sec 776) and if unresolved may be referred to the Federal Court or the Federal Circuit Court or it can be arbitrated by the Fair Work Commission if both parties agree; sec 777.
Critically though, sec 723 provides that a person must not make an unlawful termination application in relation to conduct if the person is entitled to make a general protections court application in relation to the conduct.
Consequently, in practical terms, the unlawful termination rights are intended to be an extension of the general protections to persons not covered by the general protections.