What is an unfair dismissal

Section 387 of the Fair Work Act is probably the most important section of the Act when identifying the specific matters which must be taken into account by the Fair Work Commission when dealing with an unfair dismissal case. Here is an explanation of the section in an extract from a recent case.

“Section 387 of the Act reads:

387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.”

Findings on each of these matters must be made, even if they are not relevant to the circumstances of a particular case. In this exercise, each matter must be given appropriate weight (including no weight or neutral weight, where not relevant) having regard to the findings of fact made by the Commission and taking into account the submissions of the parties. Where there is a statutory mandate to take into account a particular matter (as in s 387) means that it is a relevant consideration that the Commission is bound to take into account. So much so is evident from the decision of Mason J in Minister for Aboriginal Affairs v Peko-Wallsend and ors (1986) 162 CLR 24 at [15] where His Honour said:

‘The failure of a decision-maker to take into account a relevant consideration in the making of an administrative decision is one instance of an abuse of discretion entitling a party with sufficient standing to seek judicial review of ultra vires administrative action. That ground now appears in s.5(2)(b) of the ADJR Act which, in this regard, is substantially declaratory of the common law. Together with the related ground of taking into account irrelevant considerations, it has been discussed in a number of decided cases, which have established the following propositions’

I summarise the following propositions from His Honour’s judgment:

(a) The ground of failure to take into account a relevant consideration can only be made out if a decision-maker fails to take into account a consideration which he/she is bound to take into account in making that decision.

(b) What factors a decision-maker is bound to consider in making the decision is determined by the construction of the statute conferring the discretion.

(c) Not every consideration that a decision-maker is bound to take into account, but fails to take into account, will justify the court setting aside the impugned decision and ordering that the discretion be re-exercised according to law. A factor might be so insignificant that the failure to take it into account could not have materially affected the decision.

(d) The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned.

The meaning of the phrase ‘harsh, unjust or unreasonable’ in the context of an unfair dismissal case, is found in the oft quoted judgment of the High Court (McHugh and Gummow JJ) in Byrne and Frew v Australian Airlines (1995) 185 CLR 410 at 465:

‘It may be that the termination is harsh but not unjust or unreasonable. unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.’

I turn then to each of the discrete matters in s 387 of the Act.”

Weatherall v Elevate Education Pty Ltd (2020) FWC 6143 delivered 27 November 2020 per Sams DP