What is an unfair dismissal
Here is an extract from a Fair Work Commission decision which is the closest thing to an explanation of an unfair dismissal as case law provides.
“Before coming to the particular circumstances involved in this matter it is noted again that previous decisions have had regard to what is required in order to conclude that there was “a valid reason for the dismissal related to the person’s capacity or conduct.” The judgement of Northrop J in Selvachandran v Peteron Plastics Pty Ltd 10 is often referred to in this context. His Honour came to the following conclusions:
“The reasons of an employer for terminating the employment of an employee are solely within the knowledge of the employer. The employer may state a reason but that reason need not be the actual reason nor need it be the only reason. This is the rationale for the onus of proof provisions contained in s 170EDA.
Section 170DE(1) refers to ‘‘a valid reason, or valid reasons’’, but the Act does not give a meaning to those phrases or the adjective ‘‘valid’’. A reference to dictionaries shows that the word ‘‘valid’’ has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: ‘‘2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.’’ In the Macquarie Dictionary the relevant meaning is ‘‘sound, just, or well founded; a valid reason’’
In its context in s 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must ‘be applied in a practical, commonsense way to ensure that’ the employer and employee are each treated fairly…” 11
[77] In Parmalat Food Products Pty Ltd v Wililo 12 the Full Bench also concluded that:
“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination. Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open.” 13
[78] The Full Bench majority in B, C and D v Australian Postal Corporation T/A Australia Post 14 (“Australian Postal Corporation”) also provides a useful summary of the approach to be taken by the Commission in weighing the factors to be considered:
“Reaching an overall determination of whether a given dismissal was “harsh, unjust or unreasonable” notwithstanding the existence of a “valid reason” involves a weighing process. The Commission is required to consider all of the circumstances of the case, having particular regard to the matters specified in s.387, and then weigh:
(i) the gravity of the misconduct and other circumstances weighing in favour of the dismissal not being harsh, unjust or unreasonable;
against
(ii) the mitigating circumstances and other relevant matters that may properly be brought to account as weighing against a finding that dismissal was a fair and proportionate response to the particular misconduct.” 15
[79] It is also clear that the reason must be valid when viewed objectively. It is not sufficient that the employer believed it had a valid reason for termination. This was made clear in the Full Bench decision in Rode v Burwood Mitsubishi 16 when it stated:
“…the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.” 17
[80] These authorities make clear that the existence of a “valid reason” is often the most important consideration among the matters in s.387 that the Commission must have regard to. It is also clear that a “valid reason” must be one that is “sound, defensible and well founded” as opposed to one that is capricious, spiteful or prejudiced. It must also be valid in the context of both the employee’s capacity or conduct, and the operational requirements of the business. The test must also be applied in a practical, common sense way to ensure the parties are treated fairly in circumstances where each has rights and privileges, but duties and obligations as well. I have sought to adopt the approach of these authorities in coming to a decision in this matter.
[81] It has also been made clear that the Commission’s role in dealing with an unfair dismissal application is not to stand in the shoes of the employer, and to then decide whether the decision made by the employer was the same one that would have been made by the Commission in the same circumstances. Its role is, instead, to determine whether, on the basis of the available evidence, the circumstances that existed at the time can be said to have justified the decision to terminate the employee.”
Do v MSS Security Pty Ltd (2019) FWC 8010 delivered 27 November 2019 per Gregory C