Unlawful verses Unfair dismissal what’s the difference?
Fair work Australia is a broad term when it comes to sorting out Unlawful verses Unfair dismissal what’s the difference? Is a topic we get calls on every day. When an employee is dismissed and they want to contest or challenge their dismissal. There are various applications that can be lodged to several industrial relation bodies, depending on the circumstances. In the Fair work Commission, there are two applications that can be lodged in relation to being terminated. An Unfair Dismissal Application (F2 Application) or a General Protections Application Involving Dismissal (F8 Application). This then begs the question; which application should I lodge? This particularly applicable to casual employees.
Lets work our way through this
Unlawful dismissal is the broad umbrella term used to describe all dismissals or terminations. (it doesn’t matter whether casual or permanent or length of service) that do not comply with the law. This includes unfair dismissal or unfair termination, allegedly contravening the Fair Work Act 2009 (Cth). An unfair dismissal, by definition, is where a person is dismissed and that dismissal is harsh, unjust and unreasonable. Thus, all unfair dismissals are unlawful dismissals but not all unlawful dismissals are unfair dismissals. This is due to the fact that unfair dismissal claims have jurisdictional criteria that an employee must meet or satisfy. Before they are eligible for a remedy under the Fair Work Act 2009 (Cth).
Firstly, an employee must have been dismissed. The term dismissed is defined in the Fair Work Act 2009 (Cth) as a situation where a person’s employment has been terminated at the employer’s initiative. Or a person was forced to resign because of the conduct or course of conduct engaged in by the employer. Secondly, the employee must be an employee, on a regular and systematic basis (for casuals). They must not be a contractor and must not have been employed for a specified period, task, seasonal contract or traineeship arrangement.
Thirdly, the employee must have completed the minimum employment period with the employer. This being six months of continuous service for a large business. One year of continuous service if the employer is a “small business”. Under the Fair Work Act 2009 (Cth) a small business is a business that employs fewer than 15 employees. Includes casual employees that are employed on a regular and systematic basis.
High income threshold issues
In addition, the employee must earn less than the high-income threshold (which is currently $158,500 gross per year) or be covered under a modern award or enterprise agreement.
21 days to lodge a claim
Lastly, the employee must lodge their claim within 21 days of their dismissal taking effect. This time limit is strictly enforced, and claims lodged outside the 21 days, will only be accepted in exceptional circumstances. (extraordinary difficult to over come this timeline, claims have been rejected for being one minute late)
Unlawful verses Unfair dismissal what’s the difference?
Unlike unfair dismissals or unfair terminations, unlawful dismissal claims do not have these jurisdictional pre-requisites. They do however, have a very narrow legal argument which which does not consider general “unfairness” of the dismissal. Thus, lodging an unlawful termination claim is not a consolation prize for when you are ineligible to lodge an unfair dismissal claim. This means that just because you may be unable to lodge an unfair dismissal/termination claim as you do not qualify, you cannot automatically lodge an unlawful termination claim. These two claims have very different arguments and cover different aspects of the Fair Work Act 2009 (Cth).
Aforementioned, unlawful dismissal claims in the Fair Work Commission, are lodged in the form of a General Protections Claim Involving Dismissal (F8 Application). Alleging that the employer has contravened the General Protections provisions, as set out in Part 3-1 of the Fair Work Act 2009 (Cth). The General Protections provisions prohibit employers from taking adverse action against an employee because of a workplace right or industrial activities.
General protections provisions also protects against discriminatory treatment on the basis of protected attributes or sham arrangements. These claims do not consider any principles of fairness regarding the termination itself, as in an unfair dismissal claim. The only consideration for the Fair Work Commission is whether or not an employee has a workplace right or has exercised a workplace right. Whether an employer has acted adversely towards the employee because of this.
An example of a scenario in which an employee will have grounds to lodge a claim could be if they have been dismissed after they made a complaint or enquiry about their pay to their employer. Although the employer may not disclose this as the reason for termination, the Fair Work Commission will look at the probability that the employee was dismissed because of their complaint. Therefore constituting an unlawful dismissal.
Unlawful dismissal claims are difficult to prove
Unlawful dismissal claims are more difficult to make out than an unfair dismissal/termination claim. This is due to the narrow scope of the provisions and the requirement for a causative link between the workplace right and the dismissal. Nevertheless, it is irrelevant whether there was a valid reason for termination. Or whether they received any warnings or whether the procedure was fair. These considerations are only relevant for the unfair dismissal regime.
For an unfair dismissal claim the Fair Work Commission is required to take a number of considerations into account, such as:
- whether there was a valid reason for the termination which relates to the employees’ capacity or conduct.
- That the employee was notified of this reason.
- whether the employee was given any opportunity to respond to that reason.
- was there was any unreasonable refusal by the employer to allow the presence of a support person for any discussion relating to the termination.
- whether the employee was warned about unsatisfactory performance prior to the termination if this was the reason for the termination.
- the degree to which the size of the employer’s enterprise would likely impact on the procedures followed in making the termination.
- the degree to which the absence of dedicated human resource manager specialists or expertise in the employer’s enterprise would be likely to impact on the procedures followed in the termination; and
- any other matters the Commission considers relevant.
If an employee is eligible to lodge either claim, given they satisfy the jurisdictional requirements for an unfair dismissal claim (example the status of a casual employee) or they can link their dismissal to their workplace right, the employee can only choose one claim to pursue in the Fair Work Commission. A person cannot lodge an unfair dismissal and an unlawful dismissal claim for the same set of facts, i.e. for the same termination. The employee must elect which claim they wish to pursue and only lodge that one.
In deciding which application to lodge, the employee must decide what it is that they are seeking. For both applications, an employee can ask for a variety of remedies but most commonly, an employee will seek either reinstatement or compensation remedies. (get the termination turned into a resignation, and get a statement of service reflecting this is quite common. (This will only occur as part of a negotiated settlement).
For unfair dismissal claims, reinstatement is the primary remedy sought but if this is not viable, the Fair Work Commission may order compensation in the form of a weeks of pay for economic loss. Compensation in this form is designed to compensate unfairly terminated employees in lieu of reinstatement for losses reasonably attributable to the unfair dismissal. As a result, compensation cannot be awarded for shock, distress or humiliation. There is also a compensation cap of 26 weeks pay for these unfair termination claims. (length of service is a major consideration in regards this).
Remedies and agreements
However, prior to a formal hearing in which the Fair work Commission would determine the outcome and the subsequent remedies, an employee may strike a without prejudice and confidential deal with their ex-employer. In which the employee may seek compensation, to have their termination rescinded and for the employer to allow them to resign and for the employer to provide them with a Statement of Service.
For an unlawful dismissal claim, the remedies an employee can seek are virtually the same but in addition to seeking compensation for economic loss due to the employee’s dismissal, they can also seek damages for shock, distress or humiliation. However, if the matter does not settle in the conciliation conference, the Fair work Commission does not have the power to decide the outcome, as they do have for unfair termination claims.
If the parties are unsuccessful in reaching an agreement for a General Protections Claim and the Fair Work Commission is satisfied that all reasonable attempts to resolve the dispute have been, or are likely to be, unsuccessful, then the Commission must issue a certificate to that effect. A person has only 14 days after the day the certificate is issued by the Fair Work Commission, to make a general protections court application in the Federal Court or Federal Circuit court.
Compensation, How much?
Unlawful verses unfair dismissal, sometimes you can lodge either.
There is also no cap on the amount of compensation that can be awarded by a Court. (what’s your case worth). This in refence to a unlawful dismissal claim (general protections claim). The court does look to the same factors as in an unfair dismissal claim, when considering an unlawful dismissal claim. Length of service. The remuneration the employee would have received, or would have been likely to receive. If they had not been dismissed, etc.
However, the Court will also look at the non-economic detriment of the employee, when deciding to award damages. This includes medical evidence or doctors’ reports which demonstrate pain and suffering. An employee must therefore decide whether they can afford to pursue the matter through the courts. Because if they cannot, the unfair dismissal claims are a more cost-friendly form of litigation. Commencing any sort of litigation or court action can be an expensive ordeal.
Action under common law
An employee may choose to pursue an action under the common law in the courts but due to the cost of Federal Court actions, the employee may be facing tens of thousands of dollars in legal fees. Luckily, the unfair dismissal regime in the Fair work Commission, is a relatively cost-friendly process. (and a lot quicker). Whilst is is a relatively cost-friendly process, this is why there is a compensation cap and so the employee must decide how much money they’re really seeking. If they can afford to fight for the bigger money with expensive legal court costs. Talk to us at A Whole New Approach P/L, are not lawyers. However on referring the federal court proceedings we have a excellent referral process, give us a call.
Unlawful verses Unfair dismissal what’s the difference?
I hope you enjoyed the article, “Unlawful verses Unfair dismissal what’s the difference?”. The topic has been explained in other blogs. However I’m striving to try and succinctly bring increased clarity to difficult subjects. Example of this is what casual employees can or cannot bring to the FWC.
Got a question or concern give us a call. We are experts on anything to do with the workplace. Fair work Australia and Fair work commission matters, is bread and butter as they say. Scan through the blogs, nobody publishes the workplace commentary the way we do. We are here for you, we will not let you down. We work in all states including, Victoria, NSW, QLD, SA, WA, NT, Tas
Find out and also compare your case to others.
Another article on the unfair v unlawful choice which could be helpful, click here
What is a dismissal, click here
Reinstatement for your unfair dismissal claim, click here
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One of the nations leading workplace advisors, representatives and commentators. Gary has represented some 12,000 clients over some 20 plus years, published some 300 plus articles. He is passionate about employees rights and the test of fairness in the workplace. Have a problem, concern, wants to contribute to the debate or research, call him directly.