Employers unfamiliar with the unfair dismissal process often overlook an important part of their response to an unfair dismissal application: whether the former employee is even eligible to make a claim!
The Fair Work Act 2009 (Cth) (FW Act) provides protection for certain categories of employee from “unfair dismissal”. Not everyone has access to the jurisdiction. Accordingly, employers should look at each new application carefully and examine:
Generally*, the application must be lodged within 21 days after the termination of employment took effect.
*This timeframe can be extended, but only in very limited circumstances.
At the time of the termination of employment, the employee must have been employed for a minimum of 6 months (or 12 months for small businesses employing less than 15 employees) in order to be eligible to make a claim for unfair dismissal. This is known as the “minimum employment period” – commonly referred to as the probation period.
The minimum employment period is the period set out in the FW Act and cannot be varied (extended / reduced etc). Once the employee has completed the minimum employment period, they are eligible to make lodge an unfair dismissal claim.
The minimum employment period is also relevant if the employee was employed on a casual basis. A casual employee’s period of service can only count towards completion of the minimum employment period if the employment was on a regular and systematic basis and if they had a reasonable expectation of continuing employment of a regular and systematic basis. The means that true casual employees working randomly on an “as needs” basis will not generally be able to show that they have served the minimum employment period.
Employees who are not covered by a modern award or enterprise agreement and are earning more than the high income threshold will not be eligible to make an unfair dismissal claim.
The high income threshold is currently $136,700 per year (due to increase again on 1 July 2016). Under section 332 of the FW Act the amounts included in the threshold amount include wages, amounts directed by the employee or applied on the employee’s behalf and the value of non-monetary benefits. It does not include any amounts which are unable to be determined in advance (eg: commissions or non-guaranteed bonuses), statutory superannuation contributions and reimbursements.
In Savannah Nickel Mines Pty Ltd v Bryan Crowley [2016] FWCFB 2630, the Full Bench held that an employee’s life insurance premium paid by the employer was “an amount applied or dealt with on the behalf the employee” and as such was to be included in the calculation of the employee’s earnings. As a result, the employee was found to have earnings in excess of the high income threshold and the unfair dismissal application was dismissed.
Section 386 of the FW Act provides that an employee who resigned freely or was employed for a specified period, task, seasonal contract or traineeship arrangement and where that the employment was terminated because the specified period, task, seasonal contract or traineeship arrangement came to an end was not “dismissed” from the employment.
For example, employees employed under fixed term contracts when the term of the contract has come to an end will not be considered to be “dismissed”.
An employee whose position was made redundant may not be found to be unfairly dismissed. However, the redundancy must be “genuine” – that is, the elements set out in the FW Act describing a “genuine redundancy” must be met including that the position is no longer required to be performed by anyone, any consultation obligations were complied with and redeployment was not possible.
Review and check each time
These threshold questions are all important ones to be considered every time an unfair dismissal application arrives. These jurisdictional objections are well worth making – even at the Conciliation stage.
Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.
