Certain elements of the Federal Government’s “Fair Work Act” (“FWA”) took effect from 1 July 2009.  Included in these were new laws governing dismissal.

What is Unfair Dismissal

The FWA determines that a person has been unfairly dismissed if Fair Work Australia (the body set up by the FWA to largely administer the FWA), determines that:

• The employee was dismissed;  and
• The dismissal was harsh, unjust and unreasonable;  and
• The dismissal was not a case of genuine redundancy;  and
• The dismissal was not consistent with the Small Business Fair Dismissal Code, where the employee was employed by a small business.  A copy of the Small Business Fair Dismissal Code can be found on Fair Work Australia’s website, www.fwa.gov.au.

Note that a small business is a business that employs less than 15 full-time equivalent employees.

Who is covered by Unfair Dismissal Laws

The FWA will only regulate dismissal in circumstances where employees are covered by the national workplace relations system.  Other employees will normally have access to State legislation and tribunals.  The national scheme covers employees either (this includes most Pty Ltd companies):

1. employed in either the ACT, the Northern Territory or Victoria;
2. employed by the Commonwealth Government or a Commonwealth authority;
3. employed as a waterside employee, maritime employee or flight crew.

The FWA does not cover contractors or those employees under a contract for a specified period of time, a specified task or employed for the duration of a specified season.  It also does not cover trainees, whose employment was for a specified period of time and who are dismissed at the end of the training arrangement or agreement.  Furthermore it does not cover employees who have been demoted, but who have had no significant reduction in their remuneration or duties and remain employed by the employer.


Minimum Employment Periods

The FWA sets out a minimum employment period, such that:

• where the employer employs less than 15 full-time equivalent employees, a period of one year is required;
• where the employer employs 15 or more full-time equivalent employees, a period of six months is defined.

In addition to this, if a person earns more than a prescribed (currently $108,300 per year), they must be either covered by an award or an enterprise agreement.

So what might be regarded by Fair Work Australia as harsh, unjust or unreasonable.

The following will be considered:

1. Was there a valid reason for the dismissal relating to the employee’s capacity or conduct (this may include the affect on safety and welfare of other employees);  and
2. Did the employer notify the employee of that reason;  and
3. Was the employee given an opportunity to respond to any reason related to the capacity or conduct of the employee;  and
4. Was there an unreasonable refusal by the employer to allow the person to have a witness or support person present to assist in any discussions relating to the dismissal;  and
5. If the employee’s dismissal was related to unsatisfactory performance, whether the employee had been warned about that unsatisfactory performance before the dismissal;  and
6. The degree to which the size of the employer’s enterprise or business might be likely to impact on the procedures followed, in carrying out the dismissal;  and
7. Whether there was a dedicated HR management specialist or other expertise in the business and whether the absence of those resources (as the case may be) was likely to impact upon the procedures followed;  and
8. Any other matter which Fair Work Australia considers relevant.

So What is a Genuine Redundancy

The FWA considers genuine redundancy in cases where:

1. The employer no longer required the employee’s job to be performed by anyone because of changes in the operational requirements of the business or enterprise;  and
2. The employer has complied with obligations in a “modern award” or enterprise agreement that applied to the employment to consult about redundancy.

Please note that genuine redundancy will not be considered to have occurred where it would have been reasonable in all the circumstances for the person to be redeployed either within the employer’s business or in a business of an associated entity of the employer.

How Long After Dismissal Does an Employee Have to Make an Application to Fair Work Australia

Applications must be lodged within 14 days of the dismissal coming into effect.  In exceptional circumstances, Fair Work Australia will accept late applications.

How are Applications Made

Fair Work Australia has issued relevant application forms and at the present time an application fee of $59.50 is payable upon lodgement.  This fee can be waived where it might cause “serious hardship”.

What Remedies are Available for Unfair Dismissal

If Fair Work Australia is satisfied that an employee was dismissed unfairly, then it may order the employee’s reinstatement, together with continuity of service and lost remuneration or perhaps the payment of compensation to the employee if satisfied that reinstatement is inappropriate. 

However, there is a ceiling on the amount of compensation which can be paid and must not include a component of compensation for shock, duress or humiliation or other analogous hurt caused to the employee.  The compensation cap is in general terms to that either received or to which the employee was entitled (whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal.

General Protections

The FWA sets outs rights known as “general protections”.

Under the FWA a person, such as an employer, must not take any “adverse action” against another person, such as an employee, in circumstances where that other person has a workplace right, has exercised a workplace right or proposes to exercise a workplace right. 

“What is a workplace right” has a very broad meaning.  It may be an entitlement under an award or agreement or a workplace law or where a right to initiate a proceeding might exist or a right to make a complaint or enquiry in relation to their employment, may exist.

An “adverse action” will include dismissing or refusing to employ someone.  It would also include discriminating against such a person or otherwise “injuring” their employment (this would include demotion).

Accordingly, an employer must not take adverse action against an employee because that employee has engaged in lawful industrial action or belongs or participates in a Union.  Similarly, an employer cannot dismiss an employee because the employee is “temporarily absent” from work because of illness or injury (this if generally where the employee has been absent from work due to injury or illness for a period of 3 consecutive months or a cumulative period of 3 months in the previous 12.  Similarly, an employer must not take adverse action against an employee or prospective employee because of race, colour, creed, sex or sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, political opinion, nationality or social origin.

These General Protections May Lead to Another Form of Action Known as Unlawful Termination

A claim for a breach of a general protection right is made by different application form and an employee has 60 days from date of dismissal taking effect to bring an action for unlawful termination.  Similar to unfair dismissal, a fee of $59.50 currently applies.

How Best to Deal with the New Laws

Everyone involved in business or employment needs to maintain clearly documented records.  From an employer’s point of view, a review and update of all documents, including employment agreements, terms of employment, codes of conduct, workplace discrimination policies, probationary periods, performance reviews and any procedures including disciplinary procedures, ought be implemented and maintained. 

From an employee’s point of view, a clear record of all letters of engagement, employment agreements, terms of employment, performance reviews, records of disciplinary procedures and any other documents signed or provided during the course of employment, should be maintained.


This Newsletter does not constitute specific advice and is provided in the nature of general information only.  It is not to be relied upon as specific legal advice.  Should you have any circumstance which requires specific advice, please contact us for that purpose.