4 Steps to Minimise the Risks of Unfair Dismissal Claims

It’s no secret that the number of unfair dismissal claims made against employers by their employees is continuing to increase each year. Did you know that in 2019 alone, there were 14,652 unfair dismissal claims lodged to the Fair Work Commission? This was up from 13,538 in the previous year. 

Despite stimulus programs such as JobKeeper, there’s no doubt that with the economic strains from COVID-19’s impacts on businesses, the number of dismissals has risen — as well as the number of unfair dismissal claims. According to the Fair Work Commission (FWC) reporting in May 2020, there was an increase of more than 70% of unfair dismissal claims lodged to the FWC.

In times where businesses need to think quickly and make decisions, mistakes can be made leading to costly workplace disputes later on. We recommend following the steps below to minimise the risks of an unfair dismissal claim.

1. Educate yourself on unfair dismissals

The Australian Fair Work Act 2009 (‘the Act’) states at Section 385 that a person has been ‘unfairly dismissed’ if the FWC is satisfied that:

a) The person has been dismissed; and

b) The dismissal was harsh, unjust or unreasonable; and

c) The dismissal was not consistent with the Small Business Fair Dismissal Code if you are a small business for the purposes of the Act (employing fewer than 15 employees); and

(d) The dismissal was not a case of genuine redundancy.

The Fair Work Commission takes into consideration the matters listed in Section 387 of the Act when determining whether a termination is harsh, unjust and unreasonable in the circumstances, including:

• whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees)

• whether the person was notified of that reason

• whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

• any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal

• if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal

• the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal

• the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal, and

• any other matters that the Commission considers relevant
  

2. Implement fair procedures

It’s in your best interest as an employer to implement fair procedures to manage underperforming employees before terminating employment. We believe prevention is better than cure in these cases. As well as this, the Fair Work Commission will investigate whether procedural fairness was offered to the dismissed employee in which they had the opportunity to address the performance issues and allegations.

3. Manage and communicate employee expectations

A key way to minimise the risk of an unfair dismissal claim is to communicate with your employees what is expected of them in the workplace. Be consistent and proactive with policies and procedures to ensure staff have a clear understanding of this. 

You must ensure that all employees have read and understood the workplace policies and procedures and they provide some acknowledgement that they have read and understood the policy. You may consider reminding your employees of the policies throughout the year through training and workshops.

4. Be proactive when addressing disputes

When there is a need to enforce the policies, you should handle disputes in a consistent manner and adhere to your own policies and procedures as an employer. Address conduct issues to help staff perceive what is appropriate workplace behaviour and what is not. This also gives the opportunity for your employees to improve and address any underlying issues that may be causing the issue.

If you believe the conduct is serious enough that it could warrant dismissal, then you must ensure that you have met the standards as listed in Section 387 of the Act (listed above) and that the employee has been afforded procedural fairness and natural justice throughout the disciplinary process.

The law surrounding unfair dismissal can be complex and there are any number of matters which can determine whether a dismissal is harsh, unjust or unreasonable. The FWC will look at each dismissal on a case to case basis and make a determination based on the facts and matters above. We strongly recommend that if you are not sure of what your requirements are when considering dismissal of an employee you should seek advice prior to their employment termination.

At Optimum Legal, we work with you as an extension of your business to help make the process simple. Our team of employment lawyers are by your side every step of the way to answer any queries or concerns you may have. 

Book your free initial consultation, here.