Unfair dismissal occurs where your employer dismisses you from your employment for reasons that are harsh, unjust, or unreasonable. The Fair Work Commission (FWC) decides on cases of unfair dismissal. The Fair Work Act (FWA) requires you to make an application for unfair dismissal “within 14 days after the dismissal took effect.”

What Is Unfair Dismissal?

Unfair dismissal is when your employer dismisses you from your job in a harsh, unjust or unreasonable manner.

A common example of unfair dismissal is where an employer dismisses you under the guise of underperformance. However, the true reason for the dismissal is that your job has become redundant. Some employers often engage in this type of conduct because redundancy payouts are more costly than terminating an employee for performance issues. The latter generally attracts no significant payouts. For example: 

Jack works for a marketing agency. An uncontrollable change in the economy is causing the marketing agency to suffer a significant downturn in revenue. Consequently, Jack’s employer no longer has the financial capacity to provide Jack with work. As Jack’s employer does not want to make a redundancy payout, they terminate Jack for underperforming. Here, an unfair dismissal has occurred as Jack had been performing adequately. 

The employee’s dismissal must not be a case of genuine redundancy and not inconsistent with the Small Business Fair Dismissal Code. The Dismissal Code applies only where the employer is a small business employer.

Was the Dismissal Harsh, Unjust or Unreasonable?

Key questions to consider before you make an application for unfair dismissal include:

  • was there a valid reason for the dismissal related to your capacity or conduct;
  • were you notified of the reason, or warned about your unsatisfactory performance;
  • were you given an opportunity to respond to that reason; and
  • was there an unreasonable refusal by your employer to allow you to have a support person present to assist any discussions relating to the dismissal?

Who Can Make an Unfair Dismissal Claim?

You can make an unfair dismissal claim against your employer if you have:

  • completed the minimum employment period;
  • are covered by a modern award (or award‐based transitional instrument) or an enterprise agreement (or agreement‐based transitional instrument) applies to the person; and
  • earn less than the maximum high-income threshold prescribed by the FWA and regulations.

Applying for Unfair Dismissal

To make a claim for unfair dismissal, you must fulfil some criteria. First, you must have been employed for the minimum qualifying period. This period varies depending on whether your employer has fewer than 15 full-time staff or if you are a casual employee. Second, you must have earned less than the high-income threshold or be covered by a Modern Award or Enterprise Agreement. Third, you must have been dismissed by your employer or been given a redundancy that is not genuine. Finally, your employer must have 15 or more staff.

Costs

The fee for lodging an unfair dismissal application with the FWC is $67.20. The FWC can waive the application fee if it is satisfied that you will suffer serious financial hardship if you are required to pay the fee.

Remedy

If Fair Work Australia finds that you have been unfairly dismissed, they can order your employer to give your job back (with back pay). Alternatively, they can order your employer to pay compensation of up to six months’ pay or $59,050 (the lesser of the two amounts). Where you are to be appointed to a position other than your original position, an appointment order will protect your minimum terms and conditions which applied before the dismissal.

Key Considerations

As an employee, you may experience an unfair dismissal by your employer. If this occurs, you have 14 days to apply to the Fair Work Commission for unfair dismissal. Your employer will have 14 days to respond to the application. If you are an employee working for a small business, you have to be employed for at least 12 months before you can make an application for unfair dismissal.

If you have any questions about the nature of your dismissal, contact LegalVision’s employment dispute lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions

What is genuine redundancy?

A genuine redundancy occurs where your job is no longer required to be performed by anyone. This is commonly due to changes in business operations or a downturn in business revenue. Your employer is required to follow the appropriate consultation process before dismissing your role. Your employer also needs to have considered any possible positions that they can redeploy you into, within the business.
Examples of genuine redundancy include: a new machine or technology has automated your job, rendering your job role obsolete; or the business you are working for has suffered a downturn in revenue, meaning your employer no longer has the capacity to employ you.

What is the Small Business Fair Dismissal Code?

Your employer will be able to successfully defend your unfair dismissal claim if it is a small business (with fewer than 15 employees) and can demonstrate that it dismissed you in accordance with the “Small Business Fair Dismissal Code”. If you are a small business employee and your employer cannot demonstrate that it complied with the Code, then the FWC will go on to consider whether or not the dismissal was harsh, unjust or unreasonable.

What happens when I apply for unfair dismissal?

Once you apply, the FWC will make your employer aware of your application. This will allow your employer an opportunity to respond to your application. The FWC will then hold a conciliation session in the hope that you and your employer are able to agree on a resolution to the claim.

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