What is unfair dismissal?

The Fair Work Commission’s 2023-2024 Annual Report breaks down the types of 40,190 lodgements (previously referred to as “applications”) received from employees in that year. Most common? 14,772 unfair dismissal applications, representing 37% of total lodgements.

But what is unfair dismissal? Can anyone who’s been dismissed make an application? And where can employers find help? Let’s demystify the whole unfair dismissal topic in the hope it helps you better manage the matter as an employer.

What does “dismissed” mean?

Section 386 of the Fair Work Act 2009 defines “dismissed” as a situation where:

1. a person’s employment has been terminated at the employer’s initiative, or
2. a person was forced to resign because of the conduct or course of conduct engaged in by the employer.

What is an unfair dismissal?

A person has been unfairly dismissed if the Fair Work Commission (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; and

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

What makes a dismissal harsh, unjust or unreasonable?

A dismissal may be unfair if it is one of, two of, or all three of the terms “harsh”, “unjust” or “unreasonable”.

Examples of “harsh” dismissal

• the dismissal is an extreme response to the situation
• the dismissal has a very large (‘disproportionate’) impact on the employee’s economic and personal situation.

Example of “unjust” dismissal

• the employee is not guilty of the action or behaviour the employer used as the reason to dismiss them.

Example of “unreasonable” dismissal

• the evidence does not support the decision to dismiss the employee.

Why should employers understand what constitutes unfair dismissal?

While not every application for unfair dismissal results in a finding in favour of the employee, the time alone incurred in responding to an application for unfair dismissal is significant…particularly if you’re a newbie to the whole process. What level of details should you include on the FWC “F3 Employer Response Form” when you’re informed an ex-employee has lodged an application? How long do you have to respond? Do you have to respond in every case? What’s the difference between a FWC unfair dismissal conciliation and hearing? Should you engage a lawyer? What costs might result? There’s a lot to consider.

But help is at hand…from someone with an understanding of the system and experience in the best way for employers to respond. Our advice? Make an informed decision before putting yourself in the situation in the first place. Learn what unfair dismissal is and understand the risks you carry prior to pulling the  trigger on a dismissal. Like to know more? Give Bare Bones Consulting a call: we got your back.