The Fair Work Commission (Commission) can rule that an employee has been unfairly dismissed if the employee’s dismissal was harsh, unjust or unreasonable.
When determining if a dismissal is unfair, the Commission must have regard to a number of factors set out in the Fair Work Act 2009 (Cth) (Act). These factors require an employer to have a valid reason for the dismissal, and that a fair process was applied prior to the dismissal.
A valid reason is generally related to the employee’s capacity or conduct. A fair process requires employers to give employees an opportunity to respond to the allegations; provide prior warnings, preferably in writing; enable the employee to have a support person with them in any of the meetings if they choose and; when dismissing the employee, provide the reasons for dismissal.
The employer must also give the employee written notice of the day of the dismissal. For example, it has been found that if for similar conduct or performance issues some employees were only warned and others dismissed, that may make the dismissal unfair, but a zero tolerance drug policy if applied strictly across the business was found not to be unfair even if the employee is long serving.
The Commission makes its own decision independently of the belief of the employer. The Commission determines whether the dismissal was unfair having regard to all the facts and circumstances and the criteria set out in the Act.
Further, an employee who has lodged an unfair dismissal application more than 21 days after the dismissal takes effect, will not be successful in pursuing the claim unless that employee can provide the Commission with an acceptable explanation for the delay.
These are all known as jurisdictional questions and when they are raised, the Commission will require the parties to provide evidence on these issues to enable the Commission to make findings whether it has the power to hear the unfair dismissal claim.
If the Commission finds that the dismissal is unfair, it has the power to order reinstatement or compensation.
Reinstatement is the primary remedy; however it will only be ordered if requested by the employee, and if the Commission finds that the relationship of trust and confidence has not broken down. If the Commission does order reinstatement, it can reinstate the employee to the same or a different position and order backpay to maintain continuity of employment.
If reinstatement is not ordered or not sought, the maximum compensation that the Commission can award is the lower amount between 6 months of the employees’ annual earnings, and $74,350. The compensation is only to cover lost income the employee has lost and will continue losing in the future. Compensation cannot be awarded for hurt feelings or distress.
If the employee has engaged in misconduct, but not enough for the Commission to find that the dismissal was fair, the Commission may reduce the compensation.
Unfair Dismissal applications are one of the most common claims brought by employees as it costs $73.20 to file the claim and in some circumstances the Commission waives the filing fees.
Employers who carry out best practice and fair dismissal processes place themselves in the best possible position to defend an Unfair Dismissal claim filed against their business.
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