Unfair Dismissal (Vic)

Unfair dismissal refers to a dismissal from employment that is harsh, unjust or unreasonable. Employees in Victoria are covered by the federal Fair Work Act 2009, and so a claim for unfair dismissal must be made to the Fair Work Commission (FWC).

What is unfair dismissal?

Section 385 of the Act states a person has been unfairly dismissed if the FWC is satisfied that:

• the person has been dismissed; and
• the dismissal was harsh, unjust or unreasonable; and
• the dismissal was not consistent with the Small Business Fair Dismissal Code; and
• the dismissal was not a case of genuine redundancy.

Dismissal is where a person’s employment is ended by the employer, or where a person is forced to resign because of their employer’s conduct. A person is not dismissed if they were contracted, or under a training arrangement, for a specific period and that period has ended.

The Act allows specific rules to be made for small businesses (those that employ fewer than 15 people) in relation to unfair dismissal. These rules are contained in the Small Business Fair Dismissal Code. The code states it is fair for an employer to dismiss an employee without notice or warning if the employer reasonably believes the employee has engaged in serious misconduct. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety rules. In other cases, the code requires the employer to provide the employee with a reason for dismissal.

A dismissal is a case of genuine redundancy if an employer no longer requires the person’s job to be performed by anyone because of operational changes in the business, and the employer has complied with any redundancy obligations under an award or enterprise agreement. If it is reasonable in all the circumstances for the person to be redeployed within the business or an associated entity, the dismissal is not a case of genuine redundancy.

Criteria

In considering a claim, the FWC must take into account factors such as:

• whether there was a valid reason for dismissal related to the employee’s capacity or conduct;
• whether the employee was notified of the reason;
• whether the employee was given an opportunity to respond to the reason;
• whether any warning was given about any unsatisfactory performance if the dismissal was for that reason;
• whether the employee was unreasonably denied a support person present in any dismissal discussions;
• the degree to which the size of the employer’s business would be likely to affect dismissal procedures;
• the degree to which human resources staff or expertise would have affected dismissal procedures.

Making or responding to a claim

An employee must make a claim within 21 days of their dismissal, unless an extension is granted. The application must include:

• contact details for the employee, any representative, and the employer;
• employment details, including the dates the employee started work, was dismissed and finished work;
• reasons given by the employer for dismissal;
• reasons the employee believes dismissal was unfair.

When an employee lodges a claim with the FWC, the commission will send a copy of the application to the employer and seek a response. The employer must respond to the commission and the employee within 7 days. The response must include:

• the dates the employee started work, was dismissed and finished work;
• reasons for the dismissal;
• a response to the employee’s reasons they think the dismissal was unfair;
• any jurisdictional objections (why the dismissed employee does not fall within the FWC’s jurisdiction).

Parties can then opt for conciliation, a voluntary process which aims to resolve a matter informally, in private, and confidentially, using an FWC conciliator. If a settlement is not reached, the matter will go to a conference or formal hearing where a decision will be made by an FWC member.

Outcomes

Conciliation settlements are flexible and are reached via negotiation between the parties. A settlement may include:

• reinstatement;
• continuity (as if the dismissal did not happen);
• payment of wages, entitlements or compensation;
• a statement of service;
• an apology;
• a non-disparagement agreement (where the parties agree not to criticise each other).

If a matter is dealt with by way of conference or hearing, the only possible remedies are reinstatement or compensation for lost wages (up to 26 weeks’ pay).

Reinstatement must be considered before an order for compensation is made. Reinstatement might not be an option in circumstances where, for example, the relationship between the employer and employee cannot be repaired, or the employer would dismiss the employee again.

In deciding compensation, the FWC must consider factors such as the effect of the order on the viability of the employer’s business, and any income earned by the employee between the dismissal and the order for compensation. The amount of compensation can be reduced on account of any misconduct by the employee. Compensation cannot be paid for shock, distress, humiliation or other hurt caused by the dismissal.

For advice or representation in any legal matter, please contact Armstrong Legal.