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When can you NOT claim unfair dismissal?

in Employment Law by Aron Neilson on
When can you NOT claim unfair dismissal?

Some employees covered by the federal industrial relations system can rely upon the Fair Work Act 2009 (Cth) that provides redress to those who have been dismissed from their job in a harsh, unjust or unreasonable way.

However, not everyone can bring an unfair dismissal claim and not all situations where an employee has been let go will be considered ‘unfair’.

Who are not covered by the protections?

Less than 6 months service

If a worker has been in the job for less than six months they cannot make an unfair dismissal claim. And if they were employed by a small business, a continuous period of 12 months of employment is required before they will be eligible for an unfair dismissal claim.

Earning $138,900 or more as at March 2017 (this cap increases every year on 1 July)

If an employee is earning $138,900 or more a year, they are not eligible to make an unfair dismissal application. This is the so called ‘high income threshold’ and the amount changes from year to year.

This income threshold is not just about wages though. For example if a guaranteed bonus, a novated car lease, or a superannuation contribution from the employer exceeding the guaranteed 9.5% tips income above the $138,900 mark, then an unfair dismissal may not be possible.

Casuals and contractors? It depends really

Usually, a contractor on a fixed term contract that reaches its conclusion and is not renewed will not be able to bring an unfair dismissal claim. Similarly, an independent contractor cannot make a claim. However, ‘independent contractors’ who are actually employees (if the employment relationship can be established) can bring a claim.

Casual workers doing haphazard, intermittent hours are unlikely to be eligible. But if a casual can show they were in “regular and systematic” work, and had a reasonable expectation of ongoing employment, they might be covered provided they have been working there for 12 months or more.

Not in the federal system

Employees not covered by the federal workplace relations system are not eligible to make an unfair dismissal claim under the Fair Work Act.

State government employees in New South Wales, Queensland, Western Australia, South Australia and Tasmania are not covered, nor are local government employees in New South Wales, Queensland and South Australia. These employees need to make an unfair dismissal application through the state based industrial relations commission or tribunal.

In Victoria, the Northern Territory and the Australian Capital Territory all employees are covered by the federal system.

Employees in Western Australia need to be employed by a ‘constitutional corporation’ (including Pty Ltd companies) to be able to bring a claim for unfair dismissal under the Fair Work Act.

When is it not a dismissal?

An employee who resigns cannot claim to have been unfairly dismissed unless they were forced to quit as a result of their employer’s conduct. It needs to be shown that the resignation was not voluntary.

In some circumstances a demotion can be construed as a dismissal.

What was the reason for the dismissal?

Even if an employee is covered by the Fair Work Act’s unfair dismissal protections it still needs to be shown that the dismissal was harsh, unjust or unreasonable.

The Fair Work Commission will look at all the circumstances of the dismissal and the employment in coming to a decision about whether it is harsh, unjust or unreasonable.  

As part of its process, the Commission will also look at whether the employee was notified of the reason for the dismissal, was given an opportunity to respond and where there was a performance issue, whether the employee was given warnings before the termination occurred.

How late is too late?

There is a strict 21 day time limit to make an unfair dismissal application. This is calculated from the day following the dismissal, and the Commission does not generally permit out of time applications although it does have some discretion.