Navigating the Laws on Unfair Dismissal

The laws on unfair dismissal can be complicated and difficult to navigate. The purpose of this article is to provide some information to help the readers navigate this often complicated system.

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No Double Applications

When an employee is terminated, they have the right to lodge many different types of applications, including an unfair dismissal application, general protections application, and even a discrimination application in the Human Rights Commission.

Sections 725 and 734 of the Fair Work Act 2009 specify that an employee can only make one such application if they are dismissed.

If an employee makes two applications, then only one will be permitted to remain active and the others will be dismissed because it contravenes this rule. The policy consideration behind this rule is to minimise the number of claims that the Commission and the courts hear regarding issues involving termination of employment. This rule forces an employee to make a decision on which application they are to commence. Sometimes this decision is difficult, because an employee may, for example, have the right to file both an unfair dismissal claim anda general protections claim.

Cost Orders

The unfair dismissal laws specify that, generally, a party to an unfair dismissal application will have to carry their own legal costs. In most instances, this will be the case. However, there are some exceptions to this general rule which anyone commencing such an application should be aware of.

The Fair Work Act 2009 is the primary legislation which governs the law on unfair dismissal.

Sections 400A and 611 of the Act sets out the circumstances in which legal costs can be ordered to be paid by one of the parties to the proceedings. These sectionsspecify that the Commission can order a party to pay the costs incurred by the other party if such costs arose because of an “unreasonable act or omission” in connection with the unfair dismissal application.

What counts as an unreasonable act may include things such as rejecting a reasonable settlement offer in circumstances where the offer is close to or equal to what a party may obtain if they are successful at trial. In unfair dismissal claims, an employee is entitled to a maximum of six months’ wages or salary, or 50% of the annual high-income threshold, less allowable deductions such as payments made in lieu of notice to the employee.

For example, if the employee is offered six months’ salary less the four weeks’ notice which was paid to the employee in lieu upon termination, this would represent a very generous offer. This would represent the maximum the employee would be entitled to if the employee were successful at the hearing. Therefore, if the employee rejects such an offer, it is likely that the employee would need to pay the employer’s legal costs because a rejection of this offer would clearly fall within the meaning of unreasonable act as specified in the legislation.

Alternatively, if an employee has lodges claim that would be unlikely to succeed at trial and the employee rejects a reasonable offer made by the employer, then if it can be shown that the employee’s case had no reasonable prospect of success at the time that the offer was rejected, then that would also amount to an unreasonable act which will entitle the employer to obtain legal costs if the matter proceeded to hearing.

Costs can also be obtained against a party if they commence legal proceedings which have no basis and are doomed to fail.

The decision on whether or not a case has no reasonable prospect of success must be determined objectively at the time of filing the proceedings. The law specifies that such a conclusion  should only be reached with extreme caution.

Reaching such a finding is generally difficult in practice. A common example where such a finding would be made would be if the employee and the employer reached a settlement agreement under which the employee agreed to release the employer from all claims, including the unfair dismissal claim. If the employee continues with the unfair dismissal claim, then the employee would be running a case that has no reasonable prospect of success (because of the settlement agreement). In this situation, the employee is at risk of having costs ordered against them.

Unfair dismissal and drug use by employees

Employers take a hard line on dismissing employees for drug use during work hours. Although it is recommended that employers have in place and follow zero drug use policies in order to prevent unfair dismissal claims, the Fair Work Commission has upheld terminations of employment even where no such policies existed, and even where employees have been denied procedural fairness.

This is usually due to the serious nature of the employee conduct.

Procedural fairness, a stipulation of unlawful termination laws, entails putting any allegations or accusations of misconduct to an employee before their employment is terminated, and allowing them to respond to those allegations.

In a recent case, Albert v Alice Springs Town Council, it was held that a council worker was fairly dismissed despite the fact that his employer did not give him the opportunity to respond to drug test results. The worker was involved in a car accident during work hours while he was driving a council truck. The truck was hit by someone who failed to give way at an intersection. After the accident the worker was required to undergo a urine test which found THC levels in his system that were 73 times higher than the council’s cut-off levels. He was dismissed summarily as the council argued that the extremely high levels of THC meant that he posed a danger to himself, the public and other employees.

The employee made a claim for unfair dismissal on the basis that he had not been allowed to see the results of his drug test, and had not been given the relevant paperwork when taking the urine test. The Commission held that even though this had not been done, and the employee had in fact been denied procedural fairness, the termination of his employment was still valid. This was because of the seriousness of his conduct, and the fact that safety was critical in his job.

The Commission found that even if the worker was given procedural fairness, the outcome would have been the same because of the extremely high levels of THC. Therefore, his unfair dismissal claim failed.

While this is an example of where the employer was not required to provide procedural fairness, it is a rare example. The conduct would usually have to be very serious for this to happen, and it is recommended that employers always provide employees with procedural fairness as a matter of good practice, even where there has been serious misconduct by an employee.  This means putting allegations and evidence to employees, and giving them an adequate opportunity to respond to those allegations.

Employers should also have in place clear drug and alcohol policies which specify what will happen to employees if they return a positive test result.

Our unlawful termination lawyers Perthadvise that employees should know that when they engage in serious misconduct, especially relating to drug and alcohol use, employers can summarily dismiss them for serious misconduct, and in some rare cases such as the above, do this without affording them proper procedural fairness.

Extension of Time Granted for Filing In the Wrong Jurisdiction

On 10 October 2016, Mr Pritchard was terminated by his former employer, and on 24 November 2016, he made an application with the Fair Work Commission for unfair dismissal in accordance to section 394 of the Fair Work Act.

On 1 December 2016, the respondent raised an issue that the applicant made the Fair Work Commission application outside of the 21-day time period.  The issue before the Fair Work Commission was whether to grant the extension of time for Mr Pritchard’s application.

On 30 October 2016, Mr Pritchard filed an application with the WAIRC.  On 22 November 2016, the parties met at a conciliation conference where the matter did not settle.  On 24 November 2016, Mr Pritchard received advice from the Chamber of Commerce and Industry of Western Australia that he made an application to the wrong industrial body.  Thirty minutes later, after receiving this advice, Mr Pritchard filed an unfair dismissal claim with the Fair Work Commission.

The Fair Work Commission will grant an extension of time under Section 394 of the Fair Work Act if there are exceptional circumstances.  The Fair Work Commission made a finding that there were exceptional circumstances and the extension of time was granted for the following reasons:

  1. Mr Pritchard was unaware that his former employer was a constitutional corporation as there was no “Pty Ltd” at the end of the employer’s trading name, and Mr Pritchard thought the employer was trading as a trust.
  1. Mr Pritchard, being a layperson, was “not well-versed in industrial relations law”.
  1. Within minutes of getting advice from the CCIWA on 24 November 2016, Mr Pritchard promptly lodged an FWC unfair dismissal claim.
  1. There was no prejudice to the former employer.
  1. Mr Pritchard had credible explanation why the three days was out of time and the delay for filing out of time.
  1. Fairness was relevant to other persons in similar situations.

While statutory time frames are enforced strictly by courts and commissions, this case highlights that there is scope for an extension to be granted in exceptional circumstances.

It’s important to remember that establishing special circumstances is not easy to do. We find that most cases do not meet the criteria. The most common reason for someone filing late is that they were not aware of their rights. The courts and commission have said time and time again that this is not good enough reason to justify an extension of time. The legal position  is ignorance of the law is no excuse.

If you believe you have a claim but you are out-of-time, it’s best to contact an employment lawyer to obtain the best advice in relation to how to move forward.  Your claim may be in the category where an extension can be granted.

 

What Exactly is Unlawful Termination and How is it Different to Other Claims?

unfair-dismissal

Some people confuse the unlawful termination with the general protections and the unfair dismissal laws. While the protections of each can overlap, there are distinct differences that people should be aware of if they intend to lodge a claim challenging a dismissal.

Unlawful termination protection applies to an employee who is not covered in the Federal law system. In Western Australia, people who don’t fall in the Federal law system include State Government workers, employees who work for a partnership, and employees who work for a sole trader. Employees who work for a company or the Federal Government fall under the Federal system and should file a general protections claim, not an unlawful termination claim.

The unlawful termination provisions essentially replicate the general protections provisions.

An employee will have the right to lodge an unlawful termination claim if their employment was terminated for a prohibited reason. The prohibited reasons include:

• If the employee is terminated because they took time from work due to an illness or injury.
• They had their employment terminated because they engaged in union activities or they became a member of a trade union.
• The employee did not wish to be a member of a trade union.
• The employee sought a position as an employee representative in some form; an example of this is if the employee wished to be the safety representative in the workplace.
• The employee makes a complaint against the employer arising from some breach of the law or is actively involved in such proceedings. An example would be if the employee makes a complaint to Work Safe for a breach of the safety regulations.
• If dismissal arises from any established discrimination grounds. In Australia, there are well-established laws which state that people are entitled to be protected from discrimination relating to their skin colour, ethnicity, gender, sexual preference, age, disability, marriage status, any responsibility they have to care for their family or children, pregnancy, religious beliefs, political persuasion, country of birth, and a person’s social class or background.
• If an employee takes time off work due to maternity leave or any other time off relating to caring for children.
• If the employee takes time off work to assist emergency volunteers, to assist in volunteer work, or to manage the activities of that organisation, provided the absence is reasonable taking into account all the circumstances.

Unlawful termination laws do not apply to contractors, employees who resigned ( if termination was not a result of the conduct of the employer), and to people who are employed as trainees for a specific period of time and were terminated at the end of their training arrangement.

The unlawful termination laws state there is a time limit of 21 days after the termination takes effect to lodge a claim with the Fair Work Commission. Exceptional circumstances are required to extend this time limit if a claim is filed out of time.

If you have any questions about the contents of this article, please contact us for a no-obligation discussion with one of our unlawful termination lawyers.