Unfair dismissal is “harsh, unjust, or unreasonable” termination of employment

An unfair dismissal claim is the most well-known action arising from the termination of employment.

Most unfair dismissal claims are brought in the Fair Work Commission. For some workers, such as those employed in the public sector or by local councils,  the unfair dismissal claims are brought in state Industrial Relations Commissions.

Unfair dismissals are a specific kind of claim that are generally quick and informal. In many instances, the matters legal representation increases costs without commensurate benefit.

Unfair dismissal claims are useful for people who have been harshly treated and who are often unable to recover sufficient compensation to meet bills and living expenses until other work can be found. While reinstatement is a potential remedy, most claims resolve for payments in the range of $7,000.00 to $20,000.00.

Most claims settle for payment of money at a conciliation stage. In the event matters run to hearing, the remedy will be either reinstatement (which is very uncommon), or payment of compensation of up to 26 weeks pay.

Who Can Bring a Claim?

Not all employees are entitled to bring an unfair dismissal claim. Under the Fair work Act provisions, employees may bring a claim if they:

• earn less than the high income threshold (currently $158,500 excluding superannuation) or are covered by an Award or enterprise agreement; and
• have been employed by the employer for at least 6 months.

The Fair Work Act provides that a dismissal is unfair if it is “harsh, unjust or unreasonable”. In practice, the primary focus of the Commission is to determine whether or not there was a ‘valid reason’ for the termination.

The Process

The process for an unfair dismissal claim generally involves:

1. Commencing proceedings within 21 days from the date of termination;
2. Within about a month from filing, the matter will be subject to a conciliation conference, in which the parties will attempt to find a negotiated resolution. Negotiated resolutions generally involve the payment of money along with the execution of a deed containing releases along and confidentiality and non-disparagement obligations.
3. In the event there is no negotiated resolution, the matter will be timetabled for a hearing. This timetable will allow for the preparation of statements by both the employee and employer, an outline of submissions, and potentially the production of documents.
4. The hearing will occur before a member of the Fair Work Commission. Hearings generally take place about 3 months after the termination. Following the hearing, the member of the Commission will make a decision as to whether the dismissal was unfair. If there is a finding that the dismissal was unfair, the decision will also provide for compensation or, in rare occasions, reinstatement.

Links and Resources

• Unfair Dismissal Application Form
• The Fair Work Commission website contains a range of useful information about unfair dismissal claims
• How do unfair dismissal claims operate? – A Fair Work Commission youtube video
• When should I get a lawyer involved in my employment dispute

Adverse action claims involving termination arise where there a person is dismissed for a prohibited reason

Adverse action claims are claims brought under the Fair Work Act. Adverse action claims involve allegations that a person has been treated unfairly (including by having their employment terminated) as a result of:

• a prohibited reason such as sex, race, age; or
• a person having exercised or proposed to exercise a workplace right;
• a person having exercised or proposed to exercise an industrial right, such as joined or participated in union activities.

Adverse action claims are more significant and costlier than unfair dismissal claims. Unlike unfair dismissal, there is no cap on the amount of compensation that can be recovered. Compensation can also be recovered, if appropriate, for pain and suffering.

Adverse action claims must be commenced within 21 days of the termination of employment or 6 years if there is no allegation of termination.

Who Can Bring a Claim?

All employees, potential employees, and subcontractors are entitled to bring an adverse action claim. There is no threshold for a minimum period of employment or threshold as to earnings.

The Process

The process for an adverse action claim differs depending on whether the claim involves the termination of employment.

For claims involving termination:

1. Proceedings must be commenced in the Fair Work Commission within 21 days from the date of termination;
2. Within about six weeks from filing, the matter will be subjected to a conciliation conference, where the parties will attempt to come up with a negotiated resolution
3. If there is no negotiated resolution, the Commission will issue a certificate. Following the certificate, the applicant can commence proceedings in the Federal Court or Federal Circuit Court. Alternatively, the parties can agree to have the matter dealt with by the Fair Work Commission.
4. If the parties elect to have the matter be dealt with by the Fair Work Commission, the matter will be timetabled for hearing in a manner similar to that used for unfair dismissals. This timetable will allow for the preparation of statements by both the employee and employer, an outline of submissions, and potentially the production of documents. A hearing will occur before a member of the Fair Work Commission. Hearings generally take place about 3 to 6 months after the date of termination.
5. If the applicant elects to commence proceedings in the Federal Circuit Court or Federal Court, the matter will be listed for directions. The directions will cover the preparation of pleadings, evidence (usually in affidavit form), and other steps.  Commonly, Orders for compulsory mediation will be made.  The matter will then be listed for trial. The trial generally takes place about twelve months after the date of termination and witnesses will be examined and cross examined. The judge will then make a decision as to whether adverse action has taken place. If adverse action is found to have happened, the appropriate orders for compensation and penalties will be made as well.

Links and Resources

• Adverse Action involving dismissal Application Form
• Adverse Action not involving dismissal Application Form
• Useful information on the Fair Work Commission website
• When should I get a lawyer involved in my employment dispute

While a claim for termination in breach of contract is rare, a successful claim will allow you to recover damages amounting to money you would have earned if not for the termination

Common law claims for damages arising from breach of an employment contract are somewhat rare. This is because of the relative ease and cost-effectiveness of bring a statutory action for unfair dismissal, discrimination or adverse action.

However, in certain circumstances it may be appropriate to commence proceedings for breach of contract. The most likely scenario where a claim for damages for breach of contract arises is where an employer terminates an employee’s contract a) without giving appropriate notice as required by the contract or b) prior to the expiration of a fixed-term contract and without good cause.

A successful action for wrongful termination of the contract means that you will recover damages remunerating you for the money you would have earned but for the wrongful termination. This is generally limited to direct financial loss, so that the amount to be recovered will be determined by reference to the salary you were due to be paid under the contract if proper notice of termination had been given, or the contract had been left to run until its expiry.

The value of a common law claim for damages can therefore vary wildly depending on the terms of your employment contract and how much money you were making. These will be important facts to consider before launching court proceedings.