What is an unfair dismissal?

These are the introductory observations contained in the Fair Work Commission’s unfair dismissal benchbook as to what constitutes an unfair dismissal.

 

“Part 5 – What makes a dismissal unfair?

Overview

See Fair Work Act s.385(b)

Only after determining that an employee is protected from unfair dismissal, and that the employee has been dismissed, can the Commission determine whether the dismissal was unfair within the meaning of the Fair Work Act.

In doing so the Commission must consider whether the dismissal was harsh, unjust or unreasonable. This is also called determining the merits of the unfair dismissal claim.

There are three substantive elements of an unfair dismissal (apart from the fact of the dismissal itself) that the Commission must be satisfied of:

  1. the dismissal must be harsh, unjust or unreasonable
  2. the dismissal must not be consistent with the Small Business Fair Dismissal Code (where the Code applies), and
  3. the dismissal must not be a case of genuine redundancy.279

The power to grant a remedy cannot be exercised without the Commission being satisfied about these three matters.280

What is harsh, unjust or unreasonable?

See Fair Work Act s.387 It may be that the dismissal is:

  • harsh but not unjust or unreasonable
  • unjust but not harsh or unreasonable, or
  • unreasonable but not harsh or unjust.281

The concepts of harsh, unjust or unreasonable may overlap.282 A dismissal may be:

  • unjust because the employee was not guilty of the alleged misconduct
  • unreasonable because the evidence or material before the employer did not support the conclusion
  • harsh on the employee due to the economic and personal consequences resulting from being dismissed, or

 

279 Fair Work Act s.385.

280 McKerlie v RateIt Australia Pty Ltd t/a RateIt [2020] FWCFB 5131 (Hatcher VP, Anderson DP, Johns C, 24 September 2020) at para. 57.

281 Byrne v Australian Airlines Ltd [1995] HCA 24 (11 October 1995) at para. 128 (McHugh and Gummow JJ), [(1995) 185 CLR 410 at p. 465].

282 ibid.

 

  • harsh because the outcome is disproportionate to the gravity of the misconduct (the punishment does not fit the crime).283

Criteria for considering harshness etc.

In considering whether a dismissal was harsh, unjust or unreasonable, the Commission must take into account:

  • 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)
  • whether the person was notified of that reason
  • whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
  • any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal
  • if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal
  • the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal
  • 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
  • any other matters that the Commission considers relevant.284”