An employee is unfairly dismissed within the meaning of the Fair Work Act if the dismissal was harsh, unjust or unreasonable; was not a genuine redundancy; and was not consistent with the Small Business Fair Dismissal Code (if the employer is a small business). In order to be eligible to apply, an employee must earn less than the high-income threshold or be covered by an award or enterprise agreement, and must have completed the minimum employment period.

An unfair dismissal application must be lodged within 21 days after the dismissal took effect, although the Commission can grant an extension of time in exceptional circumstances.

The Commission’s processes are designed to be quick, flexible and informal. Unfair dismissal applications are usually referred for conciliation by specialist staff conciliators as a first step. With the assistance of a staff conciliator, the employee and employer attempt to resolve the dispute themselves. If a matter cannot be resolved with the assistance of a staff conciliator, it is referred to a Member of the Commission.

In many unfair dismissal cases, the parties are self-represented and the case is their first interaction with the Commission. The Commission’s website provides tools to help self‑represented parties understand the process and how the Fair Work Act applies to their case, including short videos, a quiz for employees about whether they are eligible to apply. The Commission’s benchbook is also an important resource that provides guidance to parties by outlining processes and important decisions.

Performance overview

In 2018–19:

• 13,928 unfair dismissal applications were lodged
• 96 per cent of applications (13,422) were finalised, with 50 per cent finalised within 39 days and 90 per cent within 94 days
• the median number of days to a staff conciliation was 32 days from lodgment, within the portfolio budget statement target of 34 days
• 78 per cent of applications conciliated by staff (8,161) were resolved by the agreement of the parties
• 5 per cent of applications (728) were resolved by the Tribunal, through a final decision or order.

The website received 449,951 page views regarding unfair dismissal, 497,219 page views or downloads of the unfair dismissal benchbook, 28,481 views of the unfair dismissal virtual tour, and 96,885 views of the online eligibility quiz for unfair dismissal applications. Staff answered 17,116 telephone enquiries concerning unfair dismissal.

Performance discussion

In 2018–19, the Commission received 13,928 unfair dismissal applications, as shown in Table 2. While the number of lodgments decreased by 4 per cent between 2015–16 and 2016–17, and again between 2016–17 and 2017–18, there was an increase of 2 per cent in lodgments in the reporting period.

Table 2: Unfair dismissal – applications lodged and finalised

Finalisation of cases

Consistent with results in previous years, a large majority of unfair dismissal applications were finalised without a formal hearing – 19 per cent were either resolved or discontinued before staff conciliation, 61 per cent were resolved at conciliation and 14 per cent were resolved after conciliation and before a formal hearing.

Of the total finalised in 2018–19, only 1 per cent (140) of applications were resolved by a decision of a Member that the dismissal was harsh, unjust or unreasonable. This was consistent with results in previous years.

Five per cent of unfair dismissal matters were finalised by a decision issued by a Member in 2018–19. In those 728 matters, the dismissal was found to be harsh, unjust or unreasonable in 19 per cent of cases (140), compared with 20 per cent in 2017–18. Table 3 sets out how unfair dismissal matters were finalised in 2018–19.

Table 3: Unfair dismissal – finalisation of matters

Case study – using plain language to improve user experience in unfair dismissal cases

Clear, accurate and consistent information is essential for providing an accessible, fair and efficient dispute resolution service, particularly for those who are self-represented.

In 2018, as a part of the What’s Next initiative, the Commission committed to a major review of its correspondence, notices and guidance material. In the review, the Commission responded to findings arising from two 2018 unfair dismissal research reports that examined how employees and small to medium-sized employers experience the Commission’s services. One recommendation was that ‘Using plain English in correspondence, forms and other communication tools could improve users’ experience of the overall process.’¹

The Commission started by reviewing 87 unfair dismissal template letters and notices that are sent from our case management system in a range of common scenarios. This is the first time this correspondence has been systematically reviewed since the Fair Work Act commenced.

Initial samples of the most commonly sent letters were redesigned with a plain language expert and then refined by a group of Members and staff who regularly handle unfair dismissal cases. Having created drafting principles, Commission staff drafted all remaining letters.

The Commission published a sample of commonly used letters on its website for public consultation in May. We also sent samples to key industry stakeholders, seeking feedback from the perspective of employees and small to medium employers, as well as seeking comment from both employees and employers who have previously participated in unfair dismissal cases.

Initial feedback has been positive. Insights from user testing and consultation will inform further revisions to the draft letters before they are finalised. We will start using the revised letters when we launch unfair dismissal matters in our new case management system later in 2019.

After we have implemented the revised unfair dismissal letters, the Commission will review unfair dismissal information resources on its website including guides, practice notes and benchbooks. We will also review letters and notices for other individual application types including general protections, anti-bullying and unlawful dismissal. The review will mean that all information available in individual application types is clear, accurate and consistent.

The Commission will also work with its staff in client-facing roles to improve their plain language capabilities.

Staff conciliation outcomes

Conciliation outcomes are agreed by the parties with the assistance of the Commission’s specialist staff conciliators, who facilitate conferences with the parties soon after lodgment of an application. The conferences are usually held by telephone to reduce the need for parties and conciliators to spend time and money on travel.

Conciliation is a highly effective process. In 2018–9, a conciliation conference was held in 10,408 matters. The parties resolved the matter by agreement in 78 per cent of cases.

As well as resolving their unfair dismissal application, the parties regularly seek to resolve other monetary or non-monetary issues – such as payment of outstanding entitlements or provision of references – through conciliation. While the parties themselves resolve the matters, staff conciliators can assist with drafting terms of settlement.

Table D1: Unfair dismissal – conciliation outcomes in Appendix D provides a breakdown of the outcomes of matters resolved at staff conciliation as reported to the Commission. In 2018–19, 63 per cent (5,137) of conciliation resolutions involved both monetary and non-monetary items; 18 per cent (1,500) were resolved on a purely non-monetary basis; and less than 1 per cent (55 conciliations) resulted in an employee being reinstated.

Table D2: Unfair dismissal – conciliation outcomes, monetary payment in Appendix D provides details of monetary amounts (including, but not limited to, compensation) agreed by the parties as part of the terms of settlement. In a substantial majority of matters – 84 per cent (5,543) – the payments were for less than $10,000.

Table D3: Unfair dismissal – conciliation matters, size of employer in Appendix D provides information regarding the size of employers who participated in conciliation conferences in unfair dismissal matters, based on the information provided by employers.

Matters finalised by Members

If an application is not resolved through conciliation or withdrawn, it is dealt with by a Member. The Member considers any jurisdictional objections that were not dealt with earlier in the process, any other basis for dismissing the application, and the merits of the application.

Consideration of objections by the employer

If an employer believes that the Commission does not have the power under the Fair Work Act to deal with the employee’s claim, the employer can object to the application.

In 2018–9, the Commission heard 207 matters in which one or more objections were raised by the employer. Of those matters, 71 per cent (146) were upheld in favour of the employer, resulting in the application being dismissed (as shown in Table D4: Unfair dismissal – employer objections in Appendix D).

The most common successful objections related to the timeliness of the employee’s application, the duration of the employee’s period of employment, and whether the employee had been dismissed.

Of the 61 matters in which the Commission did not uphold the employer’s objection(s), the Commission granted the employee an extension of time to lodge the application in 30 per cent of cases (18 matters).

In focus – using behavioural insights to increase on time lodgment

The Commission is using behavioural insights (BI) to improve the timeliness of unfair dismissal applications. As a part of What’s Next the Commission launched its first BI project in partnership with experts from the Behavioural Insights Team. The project focused on identifying behavioural interventions aimed at increasing the in time lodgment of unfair dismissal applications. Recommendations focused on improving awareness of the implications of lodging an out of time application so that applicants can make earlier, informed decisions on their best course of action. One recommendation targeting scarcity bias and loss aversion was to provide applicants with a date calculator similar to the existing agreements calculator. Using a countdown would highlight to applicants that their opportunity to apply is ‘scarce’, and that they might ‘miss out’ if they don’t act soon.

Significant decision – is a Foodora delivery rider an employee?

The Commission found that a Foodora delivery rider was an employee and not an independent contractor. The rider was not carrying on a trade or business of his own but was working in Foodora’s business, as part of that business.

The Commission found the rider was dismissed without a valid reason and that the dismissal involved an entirely unjust and unreasonable process as Foodora did not give the rider an opportunity to be heard. The Commission ordered Foodora, now in administration, to pay the rider $15,559 within 21 days.

You can read the decision in Klooger v Foodora Australia Pty Ltd at [2018] FWC 6836.

Dismissal on other grounds

aleThe Commission can dismiss unfair dismissal applications on other grounds not raised by the employer as an objection. Under s.587 of the Fair Work Act, an application can be dismissed if it was not made in accordance with the Fair Work Act, is frivolous or vexatious, or has no reasonable prospect of success. Under s.399A of the Fair Work Act, an application can be dismissed for failure to attend a conference or hearing, failure to comply with a direction or order, or failure to discontinue an application after settlement.

Where it is clear on the face of an application that the applicant has not served the minimum employment period required to make an unfair dismissal claim, the matter is referred to the Member for determination.

In 2018–19, the Commission dismissed a total of 353 unfair dismissal applications for one or more reasons not related to objections made by the employer, as shown in Table D5: Unfair dismissal – applications dismissed under s.399A and s.587 of the Fair Work Act in Appendix D. Of the 95 matters that were dismissed by a panel head under s.587 of the Fair Work Act, in 43 per cent of cases (41 matters) the employee had not met the minimum employment period, and in 59 per cent of cases (56 matters) the application was incomplete or the applicant had not paid a filing fee or been granted a fee waiver.

Consideration of the merits of an application

A decision about the merits of an unfair dismissal application concerns whether the dismissal was ‘harsh, unjust or unreasonable’ as defined in the Fair Work Act.

As shown in Table D6: Unfair dismissal – arbitration outcomes in Appendix D, Members made 229 decisions in 2018–9 about the merits of applications, which represented 2 per cent of all finalised unfair dismissal cases. In 39 per cent (89) of those decisions, the Member dismissed the application, determining that the dismissal had been fair.

In the remaining 61 per cent (140) of the applications that were considered on their merits, Members granted remedies for unfair dismissal in the large majority of cases. The remedies were:

• monetary outcomes, in 69 per cent of cases (96 applications)
• reinstatement plus compensation for lost remuneration, in 6 per cent of cases (nine applications)
• reinstatement without compensation for lost remuneration, in 3 per cent of cases (four applications).

The median amount awarded as compensation in 2018–19 was $8,704, which is the equivalent of eight weeks pay, as shown in Table D8: Unfair dismissal – arbitration outcomes, median compensation in Appendix D.

A remedy was not granted in 8 per cent of decisions (11 applications) and was yet to be determined at the end of 2018–19 in 14 per cent of decisions (20 applications).

Details of the decisions and remedies granted in 2018–19 are shown in Tables D6 to D9 in Appendix D: Tables and figures reference data.

Significant decision – can a labour hire company dismiss a worker at a client’s request?

Labour hire firm WorkPac dismissed a casual mine worker after WorkPac was directed by its client, BHP Billiton Mitsubishi Alliance (BMA), to remove her from the work site. The employee was not told why she was being removed from the site and understood from a conversation with WorkPac that she had been dismissed.

The Commission found that, although the employee was not told of the reason for her dismissal, it most likely related to her conduct during a shift a few days earlier. When determining whether there was a valid reason for WorkPac to dismiss the employee, the Commission found that WorkPac failed to ask BMA for any reasons. The Commission found there was no valid reason for dismissing the mine worker and that WorkPac failed to consider an alternative assignment for her before terminating her employment. The Commission said that the failure of WorkPac’s managers to seek further information from BMA about the reason for dismissal was contrary to the usual procedure and to contractual provisions which gave WorkPac some rights to debate a direction from BMA to remove an employee from site.

The Commission found the dismissal to be unfair and left it for the parties to consider their positions on reinstatement. On 22 October 2018, the Federal Court issued an interlocutory decision restraining BMA from stopping the employee from returning to the work site. In response, the Commission ordered reinstatement for the employee to her position with continuity of service from the date of her dismissal.

You can read the Commission decision in Star v WorkPac Pty Ltd at [2018] FWC 4991 and the Federal Court decision at [2018] FCA 1590 and the Commission order at [PR701622].

Timeliness

As shown in Table 4, despite the 2 per cent increase in claims lodged over the period, the Commission met its portfolio budget statements key performance indicator for timeliness in 2018–19: a median of 34 days from lodgment of an unfair dismissal application to a staff conciliation conference. The median in 2018–19 was 32 days.

In 2018–19, unfair dismissal applications were finalised in a median of 39 days, with 90 per cent of matters finalised within 94 days of lodgment.

Table 4: Unfair dismissal – timeliness

In focus – engaging with small business

In 2018-19 the Commission established the Small Business Reference Group (SBRG). A What’s Next initiative, the SBRG is a forum for small businesses and their representatives to provide feedback on Commission initiatives and assist the Commission in continuing to improve its services.

The Commission initiated research in 2017 to identify practical measures to improve the services we provide to small businesses. One of the recommendations arising from the research was to establish ongoing consultation channels with small business, leading to the establishment of the SBRG.

The role of the SBRG is to:

• enable information sharing between small businesses and their representatives and Commission
• assist the Commission in its ongoing work to ensure the information it provides to the public is accessible, accurate and consistent, particularly for small business users
• assist the Commission to identify, develop and implement initiatives to improve its services, particularly for small businesses
• support the Commission in its engagement with small business users including identifying and facilitating opportunities for the Commission to engage with small businesses.

Membership of the SBRG is made up of peak bodies that represent small business, small business operator members of peak bodies and government bodies such as the Fair Work Ombudsman and the Australian Small Business and Family Enterprise Ombudsman.

The SBRG provides a valuable resource to test initiatives aimed at improving the experience for users of the Commission. For example, SBRG members provided feedback on the unfair dismissal documentation redrafted in plain language from the perspective of small business employers. Read more about our project to redraft unfair dismissal correspondence using plain language in the Case study – using plain language to improve user experience in unfair dismissal cases.