Unfair Dismissal - Is your business affected by it?

Termination of employment, under any circumstances, is a difficult situation for a business owner. A key aspect we often struggle with is to understand the legal implications of the dismissal process.

 

Unfair Dismissal case for reflection: www.fwc.gov.au/decisionssigned/html/2013fwc501.htm

 

In Jan 2013, the Fair Work Commission (FWC) found Dolina Fashion Group had unfairly dismissed Danae Moumtzis, an employee of 17 years.

 

The Commission’s decision was based on the following factors:

  • Dolina Fashion Group had failed to establish a valid reason or sound basis for termination
  • The company had also failed to follow a fair process - whereby appropriate warnings on unsatisfactory performance were not provided
  • Dolina also failed to provide a proper opportunity for Ms. Moumtzis’ performance to improve

The dismissed employee was originally given five weeks' pay in lieu following her termination, but FWC ordered payment of 22 weeks' salary, given she did not wish to return to the company.

 

This is a straightforward case with very clear breaches of the Fair Work Act 2009 but it highlights several simple yet important aspects that should be taken into consideration by business owners.

 

In this article I have addressed five key elements of employment law that business owners need to be aware of. 

  1. When does an unfair dismissal occur?
    It occurs when an employee makes a remedy application to the FWC and the FWC finds that the employee’s dismissal was harsh, unjust and/or unreasonable. In addition to this they may note that the dismissal was not a case of genuine redundancy and was not consistent with the Small Business Fair Dismissal Code (“small business” constituting any business that employs less than 15 employees).

    The unfair dismissal provisions are dealt with in Part 3-2 of FWA . This outlines the concept of unfair dismissal for both the employer and employee. Essentially, the primary objective of the unfair dismissal provisions is to ensure that there is a “fair go all round”. An employee is considered to be unfairly dismissed under section 385 of the Authority (Fair Work Australia).

  2. Can any employee be eligible to make an unfair dismissal remedy application?
    No – in order to lodge an application, an employee should have completed six months of employment with an employer who employs 15 or more employees or have completed one year of employment with an employer who employs less than 15 employees.

     

  3. Is there a timeframe for an employee to lodge an unfair dismissal remedy application?
    Yes, If the employee is deemed to be eligible to make this application they should lodge it within 21 days of the dismissal coming into effect.

     

  4. What are the possible remedies for unfair dismissal?
    If the FWC is satisfied that an employee was unfairly dismissed, it may order the employee's reinstatement into their original role together with continuity of service and payment of lost remuneration, or the payment of compensation (by the former employer) to the employee if the FWC is satisfied that reinstatement is inappropriate.

     

  5. As an employer can you object to the unfair dismissal remedy application?
    Yes - you can object to an application on the basis that the applicant was not dismissed under unfair conditions or that the application is past its “lodge-by” date. Alternatively, if warranted, an appeal can be lodged on the basis that the application was made on frivolous or vexatious grounds.

     

    Termination of employment is indeed a very big challenge in a workplace and it is important to have your process and documents in place before you implement it.

    If you’d like to learn more about this issue, or receive advice on preparing documents such as objections or submissions related to termination of employment, please give us a call today on +03 9685 7578.

References:  

Fair Work Act 2009 (the FWA)

Fair Work Commission website : www.fwc.gov.au/decisionssigned/html/2013fwc501.htm

 

Contact Capaciti today on 1300 347 960 to find out how you can manage unfair dismissal more effectively in your business.