Employment Definition - Am I protected by unfair dismissal laws?
Most workers in Australia are protected from unfair dismissal by the provisions of the Fair Work Act 2009 (Cth) (the ‘Act’). There are however certain classes of workers who are excluded from the protections set out in the Act.
Employees, rather than contractors, are entitled to commence unfair dismissal proceedings. ‘Employees’ includes casual employees. Just because an individual is referred to as a ‘contractor’ does not necessarily mean that they are precluded from commencing unfair dismissal proceedings.
Whether an individual is considered to be an employee or a contractor at law is not determined by their title or even the wording of their contract. It means considering a number of indicia which may include the following (which are non-exhaustive):
1) Whether the worker controls how and when work is performed
2) Whether the worker is provided with tools, equipment, uniforms or business cards
3) Whether the worker is paid a periodic wage or for invoices upon the completion of task
In fact, employers will often use the terminology of ‘contractor’ to obscure the true nature of the employment relationship, and such workers are routinely held to be employees by the Fair Work Commission. Please contact us if you are unsure as to whether you are an employee or a contractor.
Exceptions to unfair dismissal protection: Non- national system employers.
The Act applies only to those who are employed by those employers who are defined in the Act as ‘National System Employers’. National System Employers include the following categories (which are non-exhaustive):
1) Commonwealth government employers
2) Private sector employers in Queensland and New South Wales
3) All employers in Victoria and the Australian Capital Territory (with the exception of some high managerial public service positions)
Notably, the state and local governments of Queensland and New South Wales are excluded from the system.
Have I been an employee for long enough to be covered by unfair dismissal law?
In order to utilise the benefit of the unfair dismissal provisions under the Act, an employee must have been employed by the employer for a duration in accordance with the below:
1) For employers with more than 15 employees — for at least six months
2) For employers with less than 15 employers — for at least 12 months
Does the Small Business Fair Dismissal Code apply to my employment?
For businesses with less than 15 employees, a separate and less onerous set of rules apply and employees will not be entitled to commence an application for unfair dismissal. As there are still obligations that such employees must comply with, however, it is important for small business owners and employees alike to seek legal advice in relation to any termination.
Do I come under the high-income threshold?
In order to be entitled to commence unfair dismissal proceedings, the employee must earn less than the high-income threshold or covered by a modern award or enterprise agreement. The high-income threshold changes from year to year, however at the time of writing in January 2020, it is set at $148,700.00. This generally refers to base salary and various types of bonuses and allowances may be treated differently in determining whether an employee falls under the threshold.
There are certain cases where the employee earns significantly more than the high-income threshold but is nevertheless covered by a modern award or enterprise agreement. If you are unsure as to whether you fall under the high-income threshold or are covered by a modern award or enterprise agreement, we are able to assist in making a determination.
What is constructive dismissal?
It is self-explanatory that in order to be eligible to commence unfair dismissal proceedings, a dismissal must have occurred. Such dismissal must be at the initiative of the employer (rather than a choice made by the employee).
There is an exception to this rule in circumstances where the employee essentially had no choice to resign due to the conduct of the employer. For instance, where an employer engages in conduct which results in the employee not properly being able to do their job. In these circumstances, while the employee may have resigned, the Fair Work Commission may hold that a constructive dismissal has occurred.
Was my dismissal harsh, unjust or unreasonable?
In order for an unfair dismissal to exist on a set of facts, it is not sufficient merely that a dismissal has occurred. Otherwise employees would be able to bring applications where they were dismissed for good reason! Therefore section 385 of the Act provides that a dismissal may only be an unfair dismissal in circumstances where the dismissal could be characterised as at least one of the following (or where a purported redundancy is a non-genuine redundancy):
1) Harsh (for instance, where the dismissal was not proportionate to the employee’s misconduct and constituted an over-reaction)
2) Unjust (for instance, if there was no misconduct on the part of the employee or such misconduct was trivial)
3) Unreasonable (for instance, where the decision of the employer to terminate the employee appears to be unreasonable in all the circumstances)
In determining as to whether a dismissal is harsh, unjust or unreasonable, section 387 of the Act sets out a number of criteria for the Fair Work Commission to consider, which may include the following:
1) Whether there was a valid reason for the dismissal relating to the employee’s capacity or conduct
2) Whether the employee was notified of the reason for their dismissal
3) Whether the employee was given an opportunity to respond to the reason given
4) Whether the employer unreasonably refused to allow the employee to have a support person present at any discussions relating to the dismissal
5) Whether any warnings were previously given in relation to unsatisfactory performance
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Valid reasons for termination of employment.
The first point for the Fair Work Commission to consider in determining as to whether a dismissal is unfair is whether a valid reason existed for the dismissal. The dismissal cannot simply be at the whim of the employer. Some examples of reasons which have been held by the Fair Work Commission to be valid in the past are as follows (noting that every case is different and in certain circumstances a different finding may be made):
1) Dishonest conduct and lying to superiors or co-workers
2) Embezzlement of monies or theft of the employer’s or co-worker’s property
3) Endangering the safety of co-workers (which may include physical violence, drinking or taking illicit drugs on the job)
4) Repeatedly (and, if sufficiently serious, on a single occasion) breaching the policies and procedures of the employer
5) Abusing co-workers or clients
6) Failing to follow the clear direction of a superior
7) Damaging the reputation of the employer (for instance, by disparaging the employer on social media)
8) Continued poor performance despite being warned
9) Being consistently absent from work without a valid reason (such as sick leave or personal leave)
Would the Fair Work Commission class the warnings before dismissal as reasonable?
In circumstances where the reason given for an employee’s dismissal is connected with their performance (as opposed to a serious misconduct issue), it is usually necessary for the employer to give the employee a warning about the poor performance. There is a common misconception that three warnings are required to be given however this is not necessarily the case, as what constitutes a reasonable degree of warning will depend upon the circumstances.
Following the issue of the warning, the employer must generally allow the employee with a reasonable period of time in which to improve their performance. Where a warning has not been given or a reasonable time period has not been allowed to improve performance, the Fair Work Commission will often find the dismissal to have been harsh, unjust or unreasonable and therefore unfair.
Was my dismissal due to a genuine redundancy?
As touched upon above, in addition to dismissals deemed to be harsh, unjust or unreasonable, there is a further category of dismissals which may be considered to be unfair dismissals by the Fair Work Commission. This category is known as ‘non-genuine redundancies’, which occur where an employee is ‘made redundant’ in circumstances where a genuine redundancy does not exist on the facts.
Section 389 of the Act provides that a redundancy is only genuine if the following three factors exist:
1) The employee no longer requires the employee’s job to be performed by anyone due to operational changes
2) The employer complied with any redundancy provisions in the relevant modern award or enterprise agreement
3) It was impossible to re-deploy the employee into another job within the employer’s business or an associated entity thereof
These provisions exist due to a history of employers determining to make an employee ‘redundant’ when in reality they simply wish to terminate the employee but lack a valid reason to do so. Often, the employee will later discover that another person has been employed to do their old job (maybe with a new title or some responsibilities shuffled between other employees).
Time limits on unfair dismissal cases.
Strict time limits apply for employees wishing to lodge an unfair dismissal application. The application must be lodged within 21 days of the date upon which the dismissal took effect. There are only extremely limited exceptions to this rule. Therefore it is imperative to seek legal advice immediately upon a dismissal occurring to avoid being out of time.
Forge Legal has a team of employment law experts, possessing extensive experience spanning the last 30 years. We have acted countless times for both employers and employees in relation to unfair dismissal disputes. Regardless of the situation, we are best placed to provide advice to avoid ‘false accusations’ or provide relevant advice and guidance with advocacy and/or representation.
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