Eligibility to make an unfair dismissal claim

Part 3-2 of the Fair Work Act 2009 (Cth) (FW Act) allows national system employees to apply for an unfair dismissal remedy if they believe that the termination of their employment was ‘harsh, unjust or unreasonable’. However, certain employees are excluded from making an unfair dismissal claim, and certain types of dismissals may not be the subject of such a claim.

See Which employees are eligible to make an unfair dismissal claim?

See National System Employer Tool.

When is an employee dismissed?

Self-evidently, the occurrence of a “dismissal” is a prerequisite for making an unfair dismissal claim under Part 3-2.

An employee is taken to have been dismissed where:

• • the employee’s employment was terminated on the employer’s initiative; or
• • the employee resigned, but was forced to do so because of conduct (or a course of conduct) engaged in by the employee’s employer — this type of situation is also known as “constructive dismissal”.

However, an employee will not be considered to have been dismissed if:

• • the employee was employed for a specified period of time, for a specified task, or for the duration of a specified season, and the employment was terminated at the end of the period; on completion of the task; or at the end of the season;
• • the employee was employed under a training arrangement for a specified period, and the employment terminated at the end of that period; or
• • the employee was demoted in employment, but the demotion did not involve a significant reduction in remuneration or duties, and the employee remained employed with the employer that effected the demotion.

For more information, see What constitutes a “dismissal” under the FW Act?

Unfair dismissal high income threshold

Unfair dismissal protection does not extend to employees who earn above the high income threshold unless:

• • the employee is covered by an award; or
• • an enterprise agreement applies to the employee.

The effect of this provision is that an award/agreement-free employee who earns at or above the high income threshold is ineligible to make an unfair dismissal claim.

See What impact does the high income threshold have on an unfair dismissal claim?

When is a dismissal unfair?

An employee cannot make an unfair dismissal application if the dismissal was:

• • a case of genuine redundancy; or
• • effected in accordance with the Small Business Fair Dismissal Code (in the case of a small business employer).

A dismissal will be considered unfair if it was “harsh, unjust or unreasonable”. This will depend on a number of factors, including whether:

• • the employer had a “valid reason” for dismissal relating to the employee’s capacity or conduct (see Was there a valid reason for the dismissal?);
• • the employer accorded the employee “procedural fairness” in the process leading to the dismissal (see Was the dismissal procedurally fair?);
• • any other matters that the Fair Work Commission considers relevant, such as the proportionality of the penalty, the consequences of termination upon the employee’s personal and economic circumstances, the employee’s age, length of service and disciplinary record.

Practice and procedure

Unfair dismissal applications are lodged with, and determined by, the FWC.

There is a time limit of 21 days for making an unfair dismissal application which may only be extended in “special circumstances”.

If an employer has any jurisdictional objections to the employee’s application, ie because the dismissal was a case of genuine redundancy, such objections are usually determined before the matter proceeds to a conciliation conference or formal hearing.

See What are the steps involved in initiating and resolving an unfair dismissal claim?

Remedies

A successful unfair dismissal applicant may be reinstated and/or receive an award of compensation. While the FW Act makes reinstatement the default option, in most cases reinstatement is deemed inappropriate because in the view of the FWC there has been an irretrievable breakdown in the parties’ relationship. Accordingly, successful applicants usually receive an award of compensation.

See What remedies are available?

State unfair dismissal laws

The unfair dismissal protections under the FW Act have effectively supplanted the state unfair dismissal laws for most employees. However, state laws continue to operate in relation to the public sector in most states, local government (in some instances) and, to a very limited extent, employees in the private sector in Western Australia.

See What are the unfair dismissal processes available under State laws?