Unfair dismissal: your rights and what to look out for

Losing your job can be one of the most challenging experiences in your life. You’ve lost an important income source, you've experienced a personal setback, and you may also have to start a new journey into the stressful world of job-seeking.

But it’s important to remember that workers in Australia are legally protected against unfair dismissal. If your employment is terminated, it must be done in the right way and for lawful reasons. If you’ve lost your job but your employer didn’t follow the rules, it might be a case of unfair dismissal – and you might be eligible for compensation, or even entitled to get your old job back. These cases can be complicated – and that’s why it’s essential to know where you stand and what your rights are.

We’re experts at representing employees in unfair dismissal cases. Although these cases are usually settled out of court, sometimes employers stand their ground and the case must be decided through the Fair Work Commission. Whether you’re negotiating a settlement or going to the Commission, having experienced employment lawyers and advocates by your side can help you achieve the best possible outcome.

We recently helped a sacked worker win very significant compensation after a case the Fair Work Commission ultimately described as a “textbook example of unfair dismissal”. This employee was granted a total compensation of $71,187, even though his employers fought the case.

Crowley v Modcon – a “textbook example”

When our client was sacked from his construction job, his employer claimed that the dismissal was legitimate. They accused him of misconduct and said they’d followed all the right procedures.

We took the case on and proved in the Commission that it was unfair dismissal. That’s why our client was awarded such significant compensation.

This is  example of how we help employees who have been unfairly dismissed. It’s also a great case study that we can use to look at what unfair dismissal means and how you can win the compensation you are entitled to, either through a settlement or in the Fair Work Commission.

Harsh, unjust, or unreasonable: what is an unfair dismissal?

The basic concept of unfair dismissal is simple. If employers are going to make the life-changing decision to terminate someone’s employment, they must do it for a good reason – and they must follow a fair process. But to prove it to a legal standard, you need to meet some specific requirements that are outlined in the law. That’s where it gets complex.

According to the provisions of the Fair Work Act 2009 (Cth), employment termination needs to be “harsh, unjust or unreasonable” to be considered an unfair dismissal. This rule only applies to businesses with more than 15 employees.

How do you know if a dismissal was “harsh, unjust or unreasonable”? The Fair Work Commission is required to consider several factors. The first is whether there was a “valid reason… related to the person’s capacity or conduct”.

In any workplace, there can be disagreements, mistakes and tensions. These don’t necessarily amount to a “valid reason” for a dismissal. To add to the complexity, employers and employees might disagree about the facts of what happened.

In Crowley v Modcon, the employers claimed they had valid reasons for the dismissal, but because they were unable to prove them, their evidence was not found to be credible.

This outcome highlights the fact that, even if an employer might claim they have a valid reason to terminate your employment, it still may not be legally correct. If you’ve lost your job and you think your employer’s decision was wrong and that there was no valid reason, you might have a claim for unfair dismissal.

The wrong way to terminate a job: four ways a dismissal can become unfair

It’s not just about the underlying reason. When employment is terminated, a proper procedure should be followed. If the procedure is bad, that can lead to a dismissal being seen as harsh, unjust, or unreasonable.

If a termination is challenged and ends up being considered by the Fair Work Commission, the Commission must consider:

• whether the employee was told of the reasons for the termination
• whether they had a chance to respond
• whether they had been warned before the dismissal that their performance was unsatisfactory
• whether they were able to have a support person present during any discussions relating to the dismissal, if they asked for one.

These aren’t ironclad rules. There are no specific procedures that all bosses must follow when they terminate someone’s employment. If these procedures aren’t followed, it doesn’t necessarily prove a sacking was an unfair dismissal, but it will be considered. The more problems there were with the process, the more chance there is that a termination will be considered “harsh, unjust, or unreasonable”.

In Crowley v Modcon, the employers claimed that they had followed correct procedures by giving their employee notice and allowing an opportunity to respond. However, they found that the “opportunity to respond” wasn’t genuine, as they’d already made their mind up. Additionally, the notice was unclear about the reasons for the sacking. So, even though the employer claimed to have followed the proper procedure, they did not meet the required standard of fairness.

Different standards for different businesses

Smaller businesses are subject to different expectations. If a business has less than 15 employees, the standard unfair dismissal rules don’t apply. They have more flexibility.

If a company doesn’t have a proper human resources department, or is generally under-resourced, the Commission will take that into account. A large, well-resourced company might be expected to follow procedures to a higher standard.

In Crowley v Modcon, the company had more than 15 employees and was subject to the general rules around unfair dismissal. Even though it was a small company without a significant human resources department, the Commission still found that they sacked their workers with such bad procedures and a lack of “common courtesy” that the sacking was below the legal standard expected of a business of their size.

If a company has more than 15 employees, it must follow the rules outlined in the Fair Work Act. Higher standards may be expected of bigger and better resourced companies, but all employers must follow the law. But even if an employer claims they followed the rules, they might not have met the required standards of fairness. A consultation with an employment lawyer can help you find out if you have a case.

Compensation for unfair dismissal: how it works

If your sacking was found to be a case of unfair dismissal, you might be eligible for compensation. Calculating compensation is a complex process. Employers might want to argue that they should pay low, or even no compensation, even if the unfair dismissal claim has been upheld. Employment lawyers can help build a strong case for compensation.

In many cases, compensation will be negotiated and agreed on without the Commission deciding it. We specialise in these negotiations and can help make sure you get a fair settlement. If an employer refuses to settle, you might need to take your matter through a hearing, arbitration, or a decision from the Fair Work Commission.

In Crowley v Modcon, the employers were ordered to pay $71,187 in monthly instalments over a period of six months. This recognised the economic loss experienced by their ex-employee. We achieved this compensation through our successful advocacy, arguing that the dismissal was unfair, and that the compensation should be on the higher end.

What to do when you’ve lost your job

Unfair dismissal claims need to be lodged within 21 days of the dismissal taking effect. Only in exceptionally rare circumstances will the Commission consider a claim that is lodged later than that.

If you think your sacking was unfair, you should gather all the documentation you can, as soon as you can. Collect any emails, letters, notes from meetings, or other documents that might establish what happened. These might be important evidence proving that your employers did the wrong thing.

We can help you decide your next steps and know where you stand. You might have a case that could lead to compensation that will provide justice for you, as well as the financial help you need to navigate your next steps and begin a new chapter. It doesn’t cost you anything to know where you stand.