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Unfair dismissal - the importance of procedural fairness

Saturday July 28, 2012

Unfair dismissal - the importance of procedural fairness

When considering the dismissal of an employee, employers must be mindful of the unfair dismissal regime established by Part 3.2 of the Fair Work Act 2009 (Cth) (Act), particularly with respect to the protocol by which they warn employees about performance or conduct.


For most employees, an application to Fair Work Australia (FWA) for unfair dismissal is the most attractive, quick and cost-effective recourse when they feel that they have been unfairly dismissed.

Employers who are found to have unfairly dismissed an employee, in contravention of the Act, can be ordered to reinstate the employee or pay maximum compensation of $59,050. An award of compensation for unfair dismissal does not preclude an employee from seeking additional remedies through other causes of action, such as court proceedings.

To make an application for an unfair dismissal remedy, a dismissed employee must:

  • serve the minimum period of employment required to become eligible, being one year for businesses with fewer than 15 employees or otherwise six months;
  • earn less than $118,100 per year (unless a relevant award or enterprise agreement covers the employment); and
  • lodge an application with FWA within 14 days from the date the dismissal took effect (although this time limit may be extended in some circumstances).

What is ‘Unfair Dismissal’?

An employee is unfairly dismissed if their dismissal is found to be ‘harsh, unjust or unreasonable’ having regard to matters set out in s387 of the Act and is not a case of a genuine redundancy. The Act requires FWA to consider, among other things:

  • whether there was a valid reason for the dismissal, and the employee was notified of that reason and given an opportunity to respond; and
  • whether there had been any unreasonable refusal by the employer to allow the employee to have a support person present in discussions relating to dismissal; and
  • if the dismissal is related to unsatisfactory performance, whether the employee had been warned about same prior to dismissal; and
  • the degree to which the size of the employer or absence of dedicated HR personnel or expertise would be likely to have an impact on the procedures followed in effecting the dismissal.

Recommendation

At a minimum, employers should ensure that:

  • all issues related to competence, conduct or performance are raised with the employee in a timely manner;
  • any meetings or discussion are properly documented;
  • the employee is given the opportunity to respond to any allegations;
  • all warnings to the effect that continued poor performance may result in dismissal are given in writing; and
  • if a decision is made to dismiss the employee, the employee should be provided with clear, written reasons justifying the dismissal.

Michael Kontoudis