Unfair Dismissal Under the Fair Work Act 2009

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Unfair Dismissal Under The Fair Work Act

Most of the provisions of the Fair Work Act 2009 (“the Act”), including the new unfair dismissal rules took effect on 1 July 2009. The remaining provisions, including the commencement of the new National Employment Standards and modernised awards commenced on 1 January 2010.

Commencement of unfair dismissal proceedings

National system employees who are unfairly dismissed have 14 days from the date of dismissal to bring an unfair dismissal claim (formerly 21 days).

Fair Work Australia (“FWA”) is responsible for resolving all claims for unfair dismissal. FWA replaces the Australian Industrial Relations Commission (“AIRC”), the Workplace Ombudsman, Workplace Authority and Australia Fair Pay.

FWA has the discretion to extend the time period for bringing unfair dismissal claims.

What is a “small business”?

The Australian Fair Work Act 2009 defines a “small business employer” at a particular time, as a national system employer who employees less than 15 employees at that time. This does not include any casual employees unless they are employed on a regular and systematic basis. The head count does include the person who is being dismissed or whose employment is being terminated.

Note that the employees counted in this number no longer need to be full-time or full-time equivalent employees.

As with the Work Choices legislation, associated entities are taken to be one entity. Accordingly, when determining the number of employees employed by an employer at a particular time, the employees employed by all associated entities are counted. An “Associated Entity” is an Associated Entity (the associate) of another entity (the principal) if:

  • the principal controls the associate; or
  • the associate controls the principal and the operations, resources or affairs of the principal are material to the associate; or
  • the associate has a qualifying investment in the principal and the associate has significant influence over the principal and the interest is material to the associate; or
  • the principal has a qualifying investment in the associate and the principal has significant influence over the associate and the interest is material to the principal; or
  • an entity controls both the principal and the associate and the operations, resources or affairs of the principal and the associate are both material to the entity.

A qualifying investment in another entity is when the first entity has an asset that is an investment in the second entity, or has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.

Minimum employment (qualifying) periods

An employee of a small business employer is only able to bring unfair dismissal proceedings once they have been employed for at least 12 months. For employees of any other business (those with 15 or more employees) they must have been employed for at least 6 months.

The minimum employment periods referred to above start afresh where there is a transfer of business under the Act provided that:

  • the old employer and the new employer are not associated entities; and
  • before the transferring employee commences employment with the new employer it has informed that employee in writing that it does not recognise that employee’s period of service with the old employer.

Limitations to unfair dismissal claims

Under the FWA, an employee cannot be considered as being dismissed if:

  • the person was employed under a contract for a specified length of time, a particular task, or a particular season, and that time, task or season has come to an end; or
  • the person was employed under a training arrangement for a set length of time which has come to an end; or
  • the person resigned without being forced into resignation by the employer.

Further, employees are excluded from bringing an unfair dismissal claim if:

  • they are not governed by an award or workplace agreement; or
  • their annual income exceeds the high income threshold (calculations contained in Reg. 2.13 of the Fair Work Regulations 2009).

Genuine redundancy

An employer has the opportunity to defend unfair dismissal claims where there has been a “genuine redundancy”. This requires the employer to comply with any award or enterprise agreement obligations to consult with employees about the redundancy before proceeding with the dismissal.

Small businesses are exempted from redundancy pay obligations where the dismissal arises out of a genuine redundancy. For all other businesses, the National Employment Standards allow employees up to 16 weeks severance pay in accordance with the federal test scale, in the event of a genuine redundancy.

Issues that FWA must consider before dealing with the merits

Before dealing with the merits of an unfair dismissal claim, FWA must determine whether:

  • the application has been brought within the prescribed time period;
  • the application has been made against a person who is protected from unfair dismissal;
  • whether the dismissal was consistent with the Small Business Fair Dismissal Code (if applicable); and
  • whether the dismissal was as a result of a genuine redundancy.

Harsh, unjust or unreasonable dismissal

Fair Work Australia must take into account a number of matters specified in the Act when determining whether a dismissal was harsh, unjust or unreasonable. In addition to the usual issues relating to having a valid reason for the dismissal related to a person’s capacity or conduct it must take into account:

  • the effect of the person’s conduct on the safety and welfare of other employees; and
  • any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal.

Remedies for unfair dismissal

The primary remedy for unfair dismissal is reinstatement. However, if reinstatement is inappropriate or impossible, the payment of compensation may be awarded.

Legal representation

Fair Work Australia has the discretion to permit either party to be legally represented at a conciliation conference or a hearing.

If you have any queries or require any advice regarding the Fair Work Act or unfair dismissals please contact Tony Pattinson at Ferguson Cannon Lawyers.

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Category: Employment Law, Fact Finders, General, Industrial Relations

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