Common Myths of Unfair Dismissal Claims in the Fair Work Commission

21 September 2023

The Fair Work Act 2009 (C’th) sets out the first criteria for eligibility for applications for unfair dismissal, namely that the employee must have completed a period of employment for at least the minimum employment period (MEP). 

The MEP is 6 months, unless it is a small business employer in which case it is 12 months.  The 6 months (or 12 months for small business employers) ends at the earlier of the time when the person is given notice of the dismissal or immediately before the dismissal.

However, do not fall into a false sense of security and think that just because an employee is within their first 6 months of employment, there are no other litigation risks for terminating an employee within the MEP.  You would unfortunately, once again, be wrong. 

Employers need to be aware that there are other forms of post-employment litigation that are open to an employee if they are terminated during the MEP.  More commonly, we see employees pursuing a general protections claim or a discrimination complaint.  Less commonly, we see employees considering a breach of contract claim.  But that’s a whole other article!

Myth Number 2:

An employer can extend the MEP

Picture the following scenario:

• A new employee within your organisation in the first few months of their employment have shown red flags. 
• That employee’s supervisor has had informal performance conversations with the employee but there has been no formal performance management. 
• Fast forward to the point where that employee is approaching 6 months of employment and what is supposed to be the end of their probationary period.
• The supervisor says that they need more time to make a decision about whether or not this employee is suitable for the organisation on an ongoing basis. 
• The organisation decides to extend the employee’s probationary period as a result.

There is no discretionary ability for an employer to extend the MEP.  As soon as the employee has completed 6 months’ service, they have the ability to pursue the employer in an unfair dismissal claim.

Therefore, it is important to do the following:

• Address and deal with red flags early and decisively;
• Document any discussions or processes undertaken within the MEP; and
• Provide crystal clear reasoning for termination in the letter of termination (to assist in defending a general protections claim).

Myth Number 3:

A redundancy will avoid any Unfair Dismissal risks

We receive queries where an employer is questioning whether they can “move an employee on” simply by making their position redundant.  This is irrespective of whether or not the role is in fact genuinely redundant!  We sometimes see this query arise where an employer is in the middle of an arduous performance management process that is taking a long time and is taking its toll on the supervisor or where an employee is being problematic and damaging team workplace culture but there is not enough to undertake any disciplinary action.

Do not fall into this trap – “redundancy” is not the golden ticket to solving all of your problems! 

If a role is genuinely no longer required to be performed by anyone and the incumbent in that role has been consulted and all reasonable deployment has been exhausted, the employee will not be eligible to pursue an Unfair Dismissal claim.

The Fair Work Act provides an employer the ability to lodge a jurisdictional objection on the basis of “genuine redundancy”.  The components of a genuine redundancy include the following:

• The person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise;
• The employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy; and
• It will not be a case of genuine redundancy if it would have been reasonable in all circumstances for the person to be redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer.

However, if any of those criteria are not met, an application for unfair dismissal claim can be successful.

In such circumstances, the Fair Work Commission would consider the appropriate remedy including reinstatement or monetary compensation up to 6 months’ salary.  The Fair Work Commission will sometimes consider the amount of severance pay that an employer has already paid, but not always!  In these types of scenarios, reinstatement may be more detrimental than any monetary remedy.

The article has been produced for general information purposes only and is not legal advice.