You may have heard of the phrase ‘unfair dismissal’ but are unsure what it means. If you dismiss an employee in a manner that is ‘harsh, unjust or unreasonable’, and the dismissal was not a genuine redundancy, you could face a claim for unfair dismissal. In this event, the Fair Work Commission (FWC) will follow a dismissal process to resolve the matter. The FWC is the national workplace relations tribunal. Amongst many of its functions, the FWC regulates employment law in Australia and can enforce minimum workplace requirements. This article provides a step-by-step guide to help you understand the FWC’s unfair dismissal process.
1. Your Employee Lodges a Claim
Your employee can make an unfair dismissal claim if they:
- have worked in your business for at least 6 months, or 12 months if you operate a small business (fewer than 15 employees);
- are covered by a modern award or an enterprise agreement; and
- earn less than the high-income threshold of $167,500 as of 1 July 2023.
Unfair dismissal is where:
- you terminate employment in a way that was harsh, unjust or unreasonable;
- the dismissal was not a case of genuine redundancy; and
- if you are a small business, you failed to dismiss an employee following the Small Business Fair Dismissal Code.
What is ‘harsh, unjust or unreasonable‘ will ultimately depend on the circumstances. Nevertheless, the FWC can deem a dismissal unfair where you had no valid reason for dismissing an employee or failed to give them proper notice of their dismissal.
2. Respond to the Claim
If an employee lodges a claim, the FWC will give you a copy of your employee’s application. Upon receiving the application, you have seven days to respond.
In your response, you might explain why you believe the dismissal was fair. Alternatively, you might object to the application. If you object, the FWC will hold a hearing. The FWC may dismiss the application or continue the claim.
When responding, you should use Form F3. If you object to the application, you can add your objection to your Form F3 or complete a separate Form F4 to send with your response.
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
3. Conciliation
Before resorting to a hearing, the FWC may direct you and your employee to attend a conciliation. An FWC conciliator holds the conciliation, where they meet with you and your employee to try to reach a settlement.
By talking about the issue together, you may be able to achieve a mutually beneficial outcome and avoid the cost and time burdens associated with a hearing. If you agree on a settlement at conciliation, the claim is over, and the FWC will close your employee’s application.
4. Formal Hearing
Whilst conciliation resolves most unfair dismissal claims; there are some instances where parties do not reach an agreement. In this event, the FWC will organise a formal hearing or conference.
A hearing is a proceeding that the FWC generally conducts in public. It is a determinative process, meaning a Member of the FWC will reach a legally binding decision on the matter. On the other hand, a conference is more informal and is generally private. Nevertheless, the Commission will still reach a binding decision.
You should note that the FWC does not provide legal advice. However, you can seek legal advice about the unfair dismissal process and procedure. If you wish to be represented by a lawyer or paid agent at the conference or the hearing, you will need to obtain the consent of the FWC. However, consent is unnecessary when the representative is a union employee or one of your employees.
5. Decision
Once the FWC looks at the evidence, it will decide if the dismissal was fair and issue you and your employee with its decision. If the dismissal was unfair, the FWC might order you to:
- reinstate the employee back in their job; or
- compensate your employee within the limits the law prescribes.
Where you or your employee believes the decision involved a legal or factual error, there may be the option to appeal the FWC’s decision.
Key Takeaways
As an employer, you could face a claim for unfair dismissal, For example, if you dismiss an employee in a harsh, unjust or unreasonable way or if the dismissal was not a case of genuine redundancy. If you face an unfair dismissal claim, it is essential to understand the process ahead with the FWC. This may involve conciliation and can involve a formal hearing.
If you need help responding to a claim for unfair dismissal, our experienced employment lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
The Fair Work Commission (FWC) is the national workplace relations tribunal, and one of its functions is to regulate Australian employment law.
The maximum compensation the FWC can order is the lower of six months’ wages or the compensation cap, which is $79,250 as of 1 July 2021.
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