Everything You Wanted To Know About Unfair Dismissal – Important Information for Employers and Employees

As a result of the mining downturn in Mackay and the Bowen Basin, job security has become a myth. Many employees have either been laid off or been offered or forced to take redundancy packages. In last month’s newsletter, Aimee Gladman discussed Redundancy: The Facts, explaining the entitlements due to redundant employees.

If you believe that your employment has been terminated unjustly or that an offer of redundancy isn’t genuine, then you may have grounds to lodge a claim for unfair dismissal.

N.B. Any claim for unfair dismissal must be lodged with the governing body (Fair Work Commission) within 21 days from the date of your dismissal.

In accordance with the Fair Work Act 2009 (the Act) a person has been unfairly dismissed, if the Fair Work Australia Commission is satisfied that an employee (who is protected from unfair dismissal) has been dismissed and the dismissal:

• was harsh, unjust or unreasonable; and
• was not consistent with the Small Business Fair Dismissal Code (in the case of employees of a small business); and
• was not a case of genuine redundancy.

Who is protected from Unfair Dismissal?

A person is protected from unfair dismissal at a time if:

1. the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period (either six months or one year in the case of a small business); and
2. one or more of the following apply:
   • a modern award covers the person;
   • an enterprise agreement applies to the person in relation to the employment;
   • the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold (currently $129,300.00).
     • Earnings include: wages; money that is paid on their behalf (e.g. superannuation top-ups or salary sacrifice), and the agreed value of non-monetary benefits (e.g. laptops and mobile phones).
     • Earnings don’t include: payments that can’t be set in advance (e.g. commissions, bonuses or overtime), reimbursements, superannuation contributions that the employer has to make.

Simply put, an employee is protected against unfair dismissal if they work in Queensland, earn less than $129,000.00, have been with their employer for six (or twelve) months and do not work for the State or Local Government. You are also protected if you earn over that amount and are covered by an award or an enterprise agreement.

I’m a Casual Employee – Am I protected? Possibly…

To be protected under the Fair Work Act from Unfair Dismissal, a casual employee must:

• Satisfy point 1 above; and
• Be employed on a regular and systematic basis; and
  • (‘regular’ implies a repetitive pattern and does not mean frequent, often, uniform or constant);
  • (‘systematic’ requires that the engagement be ‘something that could fairly be called a system, method or plan’);
• Had a reasonable expectation of ongoing employment on a regular and systematic basis.
  • The employer or employee may only break continuous service by making it clear to the other party that there will be no further engagements
• For example, where the employer regularly offers work when suitable work is available at times when the employer knows that the employee has generally made themselves available; and
• Work is offered and accepted sufficiently often and that it could no longer be regarded as simply occasional or irregular, then there is a reasonable expectation of ongoing employment. If all those conditions are met, then one is protected from Unfair Dismissal on the same basis as Full-Time Permanent Employees.

Small Business Fair Dismissal Code

Different rules apply for Small Businesses. The definition of a small business under the Act is a business with fewer than 15 employees (this is calculated on a headcount of all employees who are employed on a regular and systematic basis).

The Small Business Fair Dismissal Code (the Code) essentially states that it is fair for an employer to dismiss an employee without notice or warning – (summary dismissal) – when the employer believes, on reasonable grounds, that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct would include actions such as theft, fraud and violence and, understandably, in those circumstances this ground for dismissal is rarely contested. Non-summary dismissal is available if the employee was first given a reason/warning why they were at risk of being dismissed. The warning must be based on a valid reason with respect to the employee’s conduct or capacity to perform their job.

A Small Business employer can terminate an employee’s position providing the employee was given an opportunity to respond to the warning but was unable to reasonably adjust their behaviour or rectify the problem that arose as a result of their conduct.

If an employee makes a claim for unfair dismissal to the Fair Work Commission, Small Business employers will be required to produce documentation evidencing their compliance with the Code. The documentation may include a completed checklist, copies of written warning(s), a statement of termination and/or signed witness statements.

Avoiding an Unfair Dismissal

Generally, if you are an employer and you have a valid reason, relating to the conduct or capacity of the employee, you may terminate the employee. The key point is that you must ensure that a ‘fair go all round’ is given to the employee.

Below are some considerations to assist Employers dealing with problematic employees:

1. Have you discussed the employee’s performance with them?
2. Have you told the employee that their conduct is not acceptable at work?
3. Are you treating the employee’s conduct the same as other employees’ conduct has been treated in the past?
4. If they are a casual employee, have they worked under the minimum time period to be protected from an Unfair Dismissal?
5. Is the employee still working in a dangerous manner even after you have spoken with them?

If you answered no to any of the above questions, then perhaps an employee’s termination may come back to bite you.

Remedies

The Fair Work Commission has the authority to order an employee’s reinstatement and/or the payment of compensation by the employer, if the Commission is satisfied that the employee was unfairly dismissed.

If you find yourself in a bind, and need some assistance, please contact the team at Macrossan & Amiet.