Making & defending unfair dismissal claims

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Unfair dismissal claims under the Fair Work Act 2009 (Cth) are the most common legal claim brought by employees who have been dismissed. At Burn Legal Australia, we have experience representing employers and employees in unfair dismissal disputes and getting good outcomes for our clients.

We also provide proactive legal advice to employers who are considering dismissing an employee and give practical recommendations for mitigating the risk of a successful unfair dismissal claim.

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Unfair Dismissal under the Fair Work Act 2009 (Cth)

Harsh, unjust or unreasonable

A dismissal will be unfair under the Fair Work Act if it was harsh, unjust or unreasonable. For example, in an unfair dismissal claim, 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.
Harsh because the outcome is disproportionate to the gravity of the misconduct (that is, the punishment does not fit the crime).

Employer's jurisdictional objections

An employer may have a jurisdictional objection to an unfair dismissal claim that, if successful, will mean the employee has not been unfairly dismissed, regardless of the merits of the employee's claim.

Some jurisdictional objections include:

The unfair dismissal claim was made "out of time". An unfair dismissal application must be lodged with the Fair Work Commission within 21 days after the dismissal takes effect. The Fair Work Commission may only allow a further period for lodgment in exceptional circumstances.
The employee was not employed for the "minimum employment period". The minimum period of employment is 6 months (or 12 months for an employee of a small business employer).
The person was not "dismissed" within the meaning of section 386 of the Fair Work Act.
The employee earnt more than the high income threshold (currently $175,000) and there was no award that covered their employment or enterprise agreement that applied.
The dismissal was a case of "genuine redundancy".

Small business employer

There are special unfair dismissal provisions in the Fair Work Act for small business employers that make it more straightforward to dismiss an employee.

frequently asked questions: Unfair dismissal claims

Can a casual employee bring an unfair dismissal claim?

Yes. Importantly, an employee's service as a casual will not count towards satisfying the minimum employment period unless:

the employee was employed on a regular and systematic basis; and
the employee had a reasonable expectation of ongoing employment on that basis.

Is an employee protected from unfair dismissal during probation?

That depends on whether the probation period aligns to the minimum employment period under the Fair Work Act. For example, if a large employer extends the contractual probation period to 9 months, the employee will still be protected from unfair dismissal if the employee has 6-months' service and satisfies the other eligibility criteria.

On the other hand, an employee who has passed a 3-month probation period but has been employed for less than 6 months will not be protected from unfair dismissal.

Can an employee who has a guarantee of annual earnings bring an unfair dismissal claim?

Yes, an employee with a guarantee of annual earnings and earns more than the high income threshold can bring an unfair dismissal claim if the employee satisfies the other eligibility criteria. So the employee would need to satisfy the minimum period of employment, and either:

a modern award covers their employment; or
an enterprise agreement applies to their employment.

Can an independent contractor bring an unfair dismissal claim?

No. If a person is not an employee they cannot bring an unfair dismissal claim under the Fair Work Act.

In some cases, even though a worker has signed a document with the label of "independent contractor agreement", they may actually be characterised as an employee at law, and therefore eligible to bring an unfair dismissal claim (subject to the other eligibility criteria).

What remedy can the FWC order if an employee has been unfairly dismissed?

The primary remedy given to employees who have been unfairly dismissed is reinstatement. If reinstatement is not appropriate, the Fair Work Commission may order compensation. In practice, most of the time if an employee has been unfairly dismissed the Fair Work Commission will order compensation.

The maximum compensation amount is equivalent to the lesser of:

26 weeks' pay; or
Half of the high income threshold.

What is the process for responding to an unfair dismissal claim in the FWC?

An employer is required to lodge a written response with the Fair Work Commission within 7 days after the employer has received the former employee's unfair dismissal application. The response should outline why the dismissal was not unfair and any jurisdictional objections (for example, the employee did not meet the minimum employment period).

The matter will generally then be listed for a conciliation conference, typically conducted via telephone.

Conciliations are generally conducted by FWC staff, but in some situations, a FWC member will conduct the conciliation.
In a conciliation, each party will generally have the opportunity to provide an opening statement summarising their position and addressing the other parties' written materials. Then the conciliator will facilitate negotiations between the parties to explore the possibility of reaching an agreed settlement.
In a conciliation any outcome is possible provided both parties agree to it. Parties are under no obligation to reach a settlement.
If no settlement is reached, the matter will proceed towards a formal FWC hearing.
While there is no requirement for a party to be represented by a lawyer at a conciliation conference, a lawyer can provide a strong opening statement, effective negotiation skills and also take some of the stress out of the conciliation process.

Can an employee file both an unfair dismissal claim and a general protections claim involving dismissal?

No. As a general rule, section 725 of the Fair Work Act 2009 (Cth) prohibits a person from bringing both an unfair dismissal claim and a general protections claim involving dismissal at the same time.

An employee who has been dismissed will need to make a strategic choice about whether to file an unfair dismissal claim or a general protections claim.