A. MINIMUM ENTITLEMENTS TO NOTICE

So, you have been sacked or given notice of termination or you wish to resign from your job. Even if you do not wish to pursue the issue of whether a termination was unfair or unlawful, you should still ensure that you receive the proper notice according to law and have received payment of your other accrued entitlements. To check whether you have received appropriate notice, you need to consider both your contract and minimum legislative entitlements. There is a minimum entitlement to notice under the Workplace Relations Act and state legislation which operates where a written contract is silent on the issue of notice or provides for less than the minimum required by legislation. The only exception to this requirement is if an employee has been sacked for gross misconduct and there is no challenge to the validity of the sacking. If an employee accepts that their termination is due to their gross misconduct, they will not be entitled to payment for notice although they will be entitled to payment for any annual leave owed.

The minimum entitlements to notice under both federal and state legislation are:

It is important to note that these are minimum entitlements only and an employee may be entitled to a greater period of notice according to the circumstances of the case.

An employer may require you to serve out the notice period or may choose to terminate your employment with immediate effect (or within the next few days) and pay you an amount in lieu of notice.

It is common for written contracts to enable either party to terminate the contract on the provision of notice. Often the contract provision merely reflects the statutory minimums for notice. It is also common for contracts to contain periods of a fortnight or a month. It is important to note that if a contract provides for a period of notice which is less than the statutory requirement, it is still necessary to comply with the statutory requirements for notice.

If you are resigning your employment, then you should be careful to provide the appropriate notice to your employer. If you do not, the employer may be within their rights to withhold an equivalent amount from you, eg from any annual leave due and payable to you.

In addition to any notice, you are also entitled to payment for any outstanding annual leave entitlements and, in the case of long serving employees, long service leave entitlements. If you have worked for the one employer for more than seven years but less than 10 years, you may be entitled to payment for pro-rata long service leave in certain circumstances. See Minimum Terms and Conditions

What happens if your job is made redundant? The first question to ask is whether it is a genuine redundancy or not. Where the employer decides that it does not wish a job performed by the employee to be performed anymore, or proposes to redistribute the duties of the job amongst other employees, the position may be made redundant. The important thing about redundancy is that it relates to the position itself rather than the person holding the position. In those circumstances, the employer should consult with the employee about the proposed redundancy and endeavour to re-employ the employee elsewhere in the organisation.

There is no statutory requirement for additional amounts to be paid to employees whose positions are made redundant above and beyond the statutory minimum notice mentioned above. Awards and collective agreements will often contain a requirement for an additional payment (often called a “severance” payment) and this may also be a requirement in the employment contract itself or the policies of the employer. If not, then it may be necessary to obtain advice about whether an appropriate amount of notice of termination of employment has been given.

If you have not been paid your proper entitlements, you may make a complaint to the federal Workplace Ombudsman – www.wo.gov.au. This is a federal government authority established to provide a free service to assist employees obtain their proper entitlements. You may also contact the equivalent authority in each state. In Queensland, this is the Workplace Rights Ombudsman – www.wro.qld.gov.au and the Department of Industrial Relations – www.wageline.qld.gov.au.

If these government agencies cannot help you, you may need to obtain legal advice and assistance about recovering money due to you. Several self help kits are available from the courts.

B. WHAT LEGAL ACTION CAN YOU TAKE FOR UNFAIR DISMISSAL?

There are several possible forms of legal action open to a dismissed employee. The main types of action generally available on termination of employment are:

1. Unfair dismissal claim in the Australian Industrial Relations Commission or state industrial relations commission;

 

2. Unlawful dismissal claim in the Australian Industrial Relations Commission/Federal Court/Federal Magistrates Court or state industrial relations commission;

 

3. Discrimination claim under state anti-discrimination legislation or federal human rights and equal opportunity legislation;

 

4. Civil claim for breach of contract in the state common law courts;

 

5. Civil claim for breach of the Trade Practices Act 1974 in the state common law and federal courts.

1. Unfair dismissal claim in the Australian Industrial Relations Commission

As a general rule, the quickest, cheapest and most practical way of making a claim of unfair dismissal is to lodge an application for reinstatement/compensation in the industrial relations commission with coverage of your employment. For those employees covered by federal law, this is the Australian Industrial Relations Commission. For those employees not covered by federal law, this will be the relevant state industrial relations commission.

1. Time limit for lodging application

The single most important thing to remember is that an application for reinstatement/compensation must be lodged with the registry of the industrial relations commission by no later than 21 days after the date of termination of employment. There are very strict rules about extensions of time and extensions will not normally be granted. You should try and lodge a claim a day or two before the time limitation expires in case of any complications. You should also keep in mind that many registries close at 4.00pm and it may not be possible to lodge an application until the next day if you arrive after 4.00pm.

2. Is your unfair dismissal claim excluded?

After making sure your claim is in time, the next thing to check is whether your unfair dismissal claim is specifically excluded by legislation. You should note that this does not mean that the registry of the industrial relations commission will not accept your application (unless you obviously fall within the probationary period and are not claiming unlawful dismissal). What it does mean is that the respondent employer can object to your application and seek its dismissal at an early stage. If an application is filed with the Australian Industrial Relations Commission which involves one of these restrictions, the employer will normally file a document objecting to the jurisdiction of the Commission and the issue may need to be the subject of a preliminary hearing (either in person or by written submissions) before proceeding further.

The major grounds of exclusion are set out below.

i. Probation

The dismissal provisions of the federal and state legislation do not apply to employees during their first three (3) months of employment which is deemed to be a probationary period (subject to the proviso that an employee can at no time be dismissed for an invalid reason under the Act). An employee may serve a longer or shorter period of probation if there is agreement between the parties BEFORE the employment starts. An employer cannot unilaterally extend the period of probation during or after the probation period and cannot reintroduce a further probationary period later in the employment.

It is not necessary for an employer to give reasons for termination if the employment is ended during the probation period. However, an employee terminated during a probationary period can still take action for unlawful dismissal if they can show the employer terminated the employment for unlawful reasons. This exclusion exists under federal and state industrial law.

ii. Qualifying period

Under the Workplace Relations Act, there is a further restriction which excludes employees bringing an unfair dismissal complaint to the Australian Industrial Relations Commission where the employee has not worked for the employer for more than 6 months. This is known as the “qualifying period”. This exclusion does not exist in most of the state industrial relations commissions.

iii. Does your employer have 100 employees or less?

Employers with 100 or less employees are also protected from unfair dismissal actions in the Australian Industrial Relations Commission. The date for performing this calculation is the date of dismissal, not the date of filing the application or date of hearing. Part time and casual employees are also included in the head count. This exclusion does not exist in most of the state industrial relations commissions.

iv. Other exclusions

Other classes of persons excluded from taking unfair dismissal include:

• Short term casual employees (with less than a years service);

• Employees engaged for a specific period or task;

• Employees earning wages of more than $101,300.00 (this amount is subject to change from time to time) and whose employment is not subject to an award or existing collective agreement;

• Employees dismissed for genuine operational reasons; and

• Casuals and trainees employed under a traineeship agreement.

3. Was the dismissal “harsh, unjust or unreasonable”?

A dismissal will be unfair even if it is not for an invalid reason where it can be shown to be “harsh, unjust or unreasonable”. There is a lot of case law about the meaning of these words but essentially a common sense approach is adopted so that employers are required to give employees “a fair go”.

The Commission will consider both whether the dismissal was procedurally fair and substantively fair. From a procedural point of view, it is relevant whether the employee has been given procedural fairness, i.e. whether allegations were put to an employee in sufficient detail, whether the employee was allowed to respond appropriately and whether the response was taken into account before a decision was made about termination. Apart from considering whether a dismissal was procedurally fair, the Commission will consider whether the dismissal was substantively fair, i.e. procedural fairness might have been given to the employee but the decision to terminate was itself unfair or not called for in the circumstances or some lesser penalty than termination would have been more appropriate.

4. What remedies can the Commission give?

   
   

The Commission must order reinstatement unless it is impracticable (in practice, reinstatement is rarely granted) and/or compensation up to a limit of six (6) months wages. This power is the same at both federal and state levels. The dismissed employee has a duty to mitigate their loss, i.e. you have to try and find other employment and not just sit back and wait for the unfair dismissal hearing. The Commission may reduce the amount awarded to the employee if it feels that the employee hasn’t made an effort to find other work.

CASE EXAMPLE

HOW TO CALCULATE COMPENSATION FOR UNFAIR DISMISSAL

Diana Gabriela Arndt AND Crown Business Solutions Pty Limited, Australian Industrial Relations Commission, Deputy President Ives, Melbourne, 22 July 2003

This case provides a good illustration of the process for calculation of compensation in the industrial relations commissions. The Commission found the employer had imposed quite unreasonable demands on the applicant to complete a database and termination based on failure to meet these demands was not a valid reason for termination. The Commissioner also found that the employer had not warned the applicant about her unsatisfactory performance or provided an opportunity to respond prior to the termination. The Commissioner considered that reinstatement would not be appropriate and turned to the issue of compensation. He adopted the following process:

1. Assess the applicant’s loss by considering:

   • the length of time the applicant would have been likely to remain in the employment had she not been terminated; and

   • what income the applicant would have received in that time.

2. Determine the applicant’s actual earnings since termination.

3. Consider whether the applicant has made reasonable efforts to mitigate their loss.

4. Discount any amount to take account of unknown contingencies such as sickness and accident.

Here, the Commissioner considered the applicant would have only continued working with the employer for a further 4 months because of the extremely demanding nature of the job, the lack of assistance from the employer and the unlikelihood of the applicant moving to another similar position in the company. The second matter is a factual one. In deciding whether reasonable efforts to mitigate loss had been taken, the Commissioner considered the number of job applications submitted and Centrelink’s involvement in seeking work on the applicant’s behalf. Finally, the Commissioner decided that no discount should be made as the likely period of employment had already passed. The Commissioner ordered payment of a gross sum subject to taxation within a period of 3 months.

Whilst the Commission can order reinstatement and compensation, it does not automatically order that a losing party pay the legal costs of the other party. The general rule is that each party bears their own costs. The Commission does have a discretion to award legal costs if a claim is frivolous or vexatious or either party has acted in an unreasonable manner during the conduct of the claim. In practice, costs are only rarely awarded and it is necessary for the dismissed employee to pay for legal costs out of any amount awarded by the Commission for compensation. This can often be a disincentive to engaging lawyers for the trial process.

5. What is the process?

1. File application for reinstatement/compensation

As mentioned above, there is a time limit of 21 days for lodging an application with the industrial relations commission after the date of dismissal. There is a small filing fee payable on the application. The application must generally set out the grounds and facts relied on for the application. Self-help kits are available from the industrial relations commissions which provide assistance in completing the application – see www.airc.gov.au and www.qirc.qld.gov.au. Once the application has been filed, a copy must be sent to the employer as soon as possible.

2. Conciliation conference

After filing and service of the application, (assuming that no application is made by the employer to dismiss the employee’s claim because of one of the exclusions) the Commission will usually convene a conciliation conference of the parties which is held at the Commission’s offices. This is usually held within two to three weeks of the application being filed. This is a round table conference where the parties are able to speak about their claim (and in the case of the employer, their defence) and an Industrial Commissioner attempts to help the parties reach a resolution without the matter progressing further. The conference proceedings are confidential and what is said in the conference cannot generally be raised at a later date. The Commission who conducts the conciliation conference is not the same Commissioner that hears the matter if it proceeds to hearing. After opening statements by the parties, the Commissioner will normally speak with each of the parties privately and seek to negotiate a resolution, whether that be in the form of a money payment, provision of a statement of service, reinstatement or some other form. If the matter is resolved at the conference, then a deed of settlement is usually prepared by one of the parties or the Commission recording the terms of settlement.

Deeds usually contain provisions for payment by the employer to the former employee in exchange for the withdrawal of the employee’s claim, the provision of a statement of service, confidentiality and a binding promise to make no further claims.

If the matter cannot be resolved at the conference, the commissioner must issue a certificate expressing views about the case and the former employee can proceed to the next stage of the process.

3. Intermediate steps to prepare for hearing

If the matter has not been resolved at the conciliation conference and the Commissioner has issued a certificate, the former employee must file a formal document electing to proceed with their claim. Once the notice of election is filed, the Commission will normally call a directions hearing to prepare the matter for hearing. At this directions hearing, the Commission will generally ask the parties for their estimates of the number of witnesses and the length of hearing. Based on these estimates, the Commission will set the claim down for dates of hearing and make directions about dates for disclosure of relevant documents by the parties and the exchange of witness statements prior to the hearing.

Primary evidence (also called evidence in chief) is given by written witness statement with oral cross examination of any witnesses required for cross examination. A great deal of care should be taken with the preparation of witness statements (including the employee’s own witness statement). Notice must be given to the other side if any of their witnesses are required for cross examination. It is important to remember that there is no property in witnesses and it is quite acceptable for the former employer’s representatives to seek to speak with any persons who have filed witness statements in support of your case, just as it may be appropriate for you or your representatives to seek to speak with witnesses of the employer. However, harassment of witnesses or seeking to persuade them not to give evidence is not acceptable behaviour.

4. Hearing and decision

In determining whether a dismissal was harsh, unjust or unreasonable, the industrial commissioner hearing the case (under federal workplace relations law) must consider:

• Whether there was a valid reason for the termination related to the employee’s capacity or conduct;

• Whether the employee was notified of the reason for termination and given any opportunities to respond to any reason relating to their capacity or conduct;

• Whether the employee has received any warnings about unsatisfactory performance before termination occurred;

• The degree to which the size of the employer’s business and/or the absence of a dedicated human resources management specialist would be likely to impact upon the procedures for terminating employment; and

• Any other matters the Commission considers relevant.

Unfair dismissal claims are heard by a single member of the respective industrial relations commissions. After presentation of the primary evidence and any cross examination, each party is able to provide a closing statement to the commissioner hearing the matter and the commissioner will generally then reserve their decision. It is rare for a commissioner to provide a decision immediately after the conclusion of the hearing. It is more normal to have to wait a month or more for the commissioner to consider the evidence and write their decision. The decision is usually released to the parties without their having to appear again. There is the possibility of appeal from a decision of a commissioner but appeals can only be on questions of law and not generally on matters of fact or the credibility of witnesses.

2. Unlawful dismissal claims in the industrial relations commission/federal courts

1. What is unlawful dismissal?

It is a breach of federal and state industrial legislation for employment to be terminated on what are called “unlawful” grounds. Whether an employee is on probation or not, are full-time, part-time or casual, it is not a valid reason to terminate employment on one of these grounds. The major ones covered by federal and state law are:

1. Temporary absence from work because of illness or injury (commonly meaning periods of less than three (3) months in any one year);
2. Trade union membership or participation in trade union activities outside working hours or, with the employer’s consent, during working hours;
3. Non-membership of a trade union;
4. Seeking office as, or acting or having acted in the capacity of, a representative of an employee;
5. Filing a complaint or taking part in proceedings against an employer for alleged violation of laws or regulations or recourse to competent administrative authorities;
6. Refusing to negotiate in connection with or make, sign, extend, vary or terminate an AWA or collective agreement;
7. The employee or their spouse being pregnant or adopting a child, or applying for or being absent on parental leave; or
8. Any of the grounds contained in federal or state anti-discrimination laws, e.g. race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin. 

2. Legal process

A claim of unlawful dismissal in the industrial relations commission can be made in conjunction with a claim of unfair dismissal. In most state industrial relations commissions, including the Queensland Industrial Relations Commission, the Commission can deal with claims of unlawful dismissal through to hearing. The process for hearing these claims is very much the same as the process for unfair dismissal claims. Most of the time, a claim of unlawful dismissal will also include a claim of unfair dismissal.

However, a different process applies at a federal level.

For those claims covered by federal workplace relations law which include a claim of unlawful dismissal, the Australian Industrial Relations Commission can only deal with the application as far as the conciliation conference. If the conciliation conference is not successful in resolving the claim, the claimant must elect whether to continue with the claim or not. If so, then rather than continuing in the Australian Industrial Relations Commission, fresh proceedings must be commenced in either the Federal Court of Australia or, more commonly, the Federal Magistrates Court. Assistance with the forms required to commence these proceedings can be found at the Federal Magistrates Court website – www.fmc.gov.au. There are time limits on the commencement of these proceedings.

Proceedings in the Federal Magistrates Court are, generally speaking, more formal than in the Australian Industrial Relations Commission but the Federal Magistrates Court does try to deal with matters as informally and as quickly as possible. After filing and serving the initiating documents, the court will convene a directions hearing to prepare the case for hearing and will generally set the matter down for hearing once these steps have been completed.

The onus of proving that the termination did not rely on an unlawful ground is on the employer at the hearing.

In addition to the possibility of reinstatement and compensation, the court can also impose a penalty on the former employer for breaching the legislation. At the moment, the maximum penalty that can be imposed at a federal level is $10,000.00. Similar penalties can be imposed by the state industrial relations commissions. As with unfair dismissals, the court cannot award any amount for pain and suffering caused by the manner of the dismissal.

As with the industrial relations commissions, the general rule is that each party bears their own costs. Accordingly, it is necessary to consider the costs and benefits of engaging lawyers as part of this process.

3. Discrimination claims

Click here for information relating to discrimination claims.

4. Civil claim for breach of contract (“wrongful dismissal”)

If you are unable to take one of the forms of legal action above arising from termination of employment, you can consider a legal action in the common law courts claiming a breach of the employment contract by the employer.

1. Legal grounds for action

1. Breach of a specific term of the contract

   
   

The most common claim made is for breach of the obligation in a contract to give reasonable notice. If your employment has been terminated, you should check to see whether your employment contract contains a provision about the amount of notice which the employer has to give you. If there is no provision in the contract, then a term will be implied that the employer can only terminate on reasonable notice. This is a separate requirement to the minimum entitlements under legislation.

If the contract is for a fixed term, then you may be able to claim payment for the rest of the term of the contract if it is terminated early. This may depend on whether the contract provides for termination on any lesser period of notice.

What is reasonable notice will depend on a number of factors and will vary from case to case. Relevant factors include:

• Length of employment;

• Seniority of the position;

• Amount of remuneration/salary;

• Educational qualifications;

• How easy it is to find other employment of a similar nature and level;

• Your age and financial commitments;

• Mobility – i.e., how easy it is for you to locate to another centre in order to find employment;

• The extent to which your conduct was responsible for the dismissal.

There is a duty on you to mitigate your damage. This means that you have to take reasonable steps to find other employment of a similar nature. Any income earned by you will be taken into account in assessing your monetary damages.

Whilst your conduct may be relevant to an assessment of how much notice is reasonable in the circumstances, the same does not apply to the employer. This means that reprehensible conduct by an employer will not result in a greater monetary award in your favour. The employer’s conduct is not strictly relevant to the calculation of reasonable notice.

The amount of notice will vary depending on the facts of each particular case. At its highest, it may be more than a year.

2. Breach of the implied terms of the contract

   
   

This is an area of the law that is receiving increasing attention because of the greater difficulty in making claims to the industrial relations commissions. Of most relevance is the duty of mutual trust and confidence between the employer and employee (otherwise called a duty of fidelity or good faith). This may cover situations where an employer acts unfairly or maliciously in terminating employment. There is relatively little case law about this area of implied terms although it has been the subject of a lot of legal debate.

The common law courts do not have the power to order reinstatement. Monetary damages are the normal remedy. In some circumstances, an application could be made to the court for an injunction to stop an employer from terminating employment. However, this type of claim is rare.

The general purpose of a damages award is to place the dismissed employee in the same position as if the contract had been properly observed. A dismissed employee is generally able to sue for loss of wages and other remuneration which would have been earned but for the dismissal. This may include the loss of superannuation entitlements, employer benefits such as motor vehicle and telephone and bonuses. As with the statutory actions for unfair dismissal and unlawful dismissal, the courts do not award damages for distress and humiliation.

1. Legal process