Recognising a fair dismissal from an

unfair dismissal

What about employees of less than 12 months?

Your employees can not bring an unfair dismissal claim in the first 12 months of their employment, which means they can not take you to the Fair Work Commission simply because they believe their dismissal was “harsh, unjust or unreasonable”.

However, this does not mean you can dismiss an employee for any reason, even in the first 12 months of employment. You are still bound by the general protections in the termination provisions of the Fair Work Act.

Why do small businesses have different standards?

The law understands that small businesses do not usually have access to the same resources as larger ones, so it streamlines the process you need to follow for lawfully terminating a worker’s employment.

Your business will fall under the small business rules if it (and any associated entities) employ fewer than 15 staff. This includes full-time, part-time and permanent employees, but not independent contractors and some casual employees (who have not been employed on a regular and systemic basis).

Can a worker bring an unfair dismissal claim if they resign?

Sometimes an employee can bring an unfair dismissal claim, even if they are the one who ended the employment. For this to happen, they must be able to prove that your actions (or one of your employee’s actions) forced them to resign.

This type of claim is known as a “constructive dismissal” and it can be difficult to prove. However, if a worker does meet the test for constructive dismissal, the Fair Work Commission generally takes an unfavourable view of the employer. You should always consult your solicitor if an employee brings a constructive dismissal claim.

What is a general protections (unlawful termination) claim?

A general protections (unlawful termination) claim is a different concept to unfair dismissal. The general protections provisions, which apply to all workers (regardless of their length of employment), prohibit you from taking adverse action against a worker (including dismissing anyone):

  • Because of their race, colour, sex, sexual orientation, age, religious beliefs, mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin (although it makes an exception if it is an inherent requirement of the job)
  • Because they have been away from work due to illness or injury
  • Because they are or aren’t a union member or are running for office as a union representative
  • Because they are on parental leave, paid or unpaid
  • Because they are away doing emergency volunteer work
  • Because they have filed a complaint or started proceedings against you or someone you employ.

If you dismiss an employee for any of these reasons, it is likely you will face heavy fines (currently up to $10,800 for an individual and $54,000 for a company) as well as the prospect of having to pay the worker compensation or even being made to rehire them.

Usually, a worker has 21 calendar days from the date their dismissal took effect to bring an unlawful termination claim.

When can a business dismiss a worker without notice?

You can dismiss a worker without any notice if they engage in serious misconduct. Examples of serious misconduct include theft, fraud, violence and serious safety breaches.

If you have clear evidence that gives you reasonable grounds that they have stolen, assaulted someone or engaged in other criminal behaviour it is sufficient (although not essential) for a dismissal to be deemed fair if you report the incident to the police before you dismiss them for serious misconduct.

It does not matter whether or not the worker is later charged or convicted with the offence, so long as you have reasonable grounds for believing that they engaged in the serious misconduct.

What happens if an employee brings an unfair dismissal or a general protections (unlawful termination) claim?

If a worker brings an unfair dismissal claim against you, you will need to lodge a written response and show that you have complied with the Small Business Fair Dismissal Code. One of the best tools for doing this is to download and complete a Small Business Fair Dismissal Checklist from the Fair Work Commission website, ideally prior to the dismissal.

If a worker brings a general protections claim against you, you have seven calendar days to respond. If the claim is not resolved the Fair Work Commission will then try to find a solution through conciliation. If this fails the worker can elect to continue their claim by starting proceedings in the Federal Court or Federal Circuit Court and the matter will then go to a full hearing.

If a former employee brings any kind of legal action against you, you should always consult your solicitor, who will help you explore the best, most cost-effective way of resolving the dispute.

How can a solicitor help?

If you are a small business owner considering terminating a worker’s employment your solicitor can help in many ways, including:

  • Advising you on the process you should follow to minimise risk
  • Advising you on the employee’s entitlements
  • Advising you on any alternatives to dismissal
  • Referring your case to the Law Society’s mediation program
  • Representing you in the Fair Work Commission or in later court proceedings.

Get in touch with a solicitor

If you do not yet have a solicitor, do not worry. We have made it easy to find one near you through our online Find a lawyer service.

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