Unfair Dismissal in the ACT

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In Australia, employment law systems exist at both federal and state level. However, in the ACT and Northern Territory, all employees are covered by the national workplace relations system, which is set out in the Fair Work Act 2009.  Therefore, if a person was employed in the ACT and believes that their employer has dismissed them unfairly, they can make a claim of unfair dismissal to the Australian Fair Work Commission. This page outlines the processes involved.

What is unfair dismissal in the ACT?

The Fair Work Act 2009 defines ‘unfair dismissal’ as any dismissal from employment that is harsh, unreasonable or unjust and is not a genuine redundancy.

For the purposes of the unfair dismissal laws, a person is ‘dismissed’ if:

• their employment is terminated;
• they resign under pressure because of their employer’s behaviour. 

It is important to note, however, that if a person resigns because of their employer’s conduct, they will need to demonstrate that the resignation was effectively ‘forced’ or that they had no alternative but to resign. 

Small businesses

For small business employers (businesses with less than 15 employees), a dismissal may be unfair if it was not done in compliance with the Small Business Fair Dismissal Code. The Small Business Fair Dismissal Code provides guidance to small business owners on when a dismissal is justified. For example, a small business may summarily dismiss an employee for stealing from their employer.

An employee may be found to have been unfairly dismissed from a small business where:

• a redundancy is not a genuine redundancy
• no reason is given to the employee for the dismissal
• the employee was not informed of the reasons for their dismissal, or
• the employee was dismissed for poor performance without being warned that they were performing poorly.

What is not unfair dismissal in the ACT?

An employee is not eligible to make a claim for unfair dismissal if:

• they resigned voluntarily
• their dismissal was due to a ‘genuine redundancy’
• the person was employed for a fixed period and the contract was not renewed when that period ended.   

A dismissal is a genuine redundancy if the job is no longer required to be performed by anyone, and the employer complied with any obligations it had under an award or enterprise agreement regarding consultation and redeployment prior to making the dismissal.

Who can bring an unfair dismissal claim?

Only certain employees are eligible to bring an unfair dismissal claim before the Fair Work Commission.

Firstly, an employee must have completed a continuous period of service with their employer of at least six months (or 12 months if the employer has fewer than 15 employees).  

Secondly, the worker’s annual earnings must be less than the threshold (currently $167,500 per annum) unless they are covered by an award or enterprise agreement. The high-income threshold excludes compulsory superannuation contributions and reimbursements.

Procedure for unfair dismissal claims

Applications for unfair dismissal claims must generally be lodged with the Fair Work Commission within 21 days of the dismissal. However, the Commission may allow a person to make a late application if there were exceptional circumstances that prevented them from making the application within that time limit.  

Conciliation

After the application form has been lodged with the Fair Work Commission, a member of the Commission will contact the applicant and their former employer to arrange a conciliation meeting. This meeting will be run by an independent conciliator from the Commission.  The conciliator will assist the parties to try to reach an agreement to resolve the situation.

Conciliation may result in:

• a financial settlement
• a retrospective resignation
• an apology, or
• any other agreement.

Conference or arbitration

If conciliation is unsuccessful, the Commission will issue parties with a ‘Notice of Listing’, informing them of whether their matter will be proceeding to a determinative conference or to an arbitration hearing.

A determinative conference is more informal that a hearing. The parties will attend a private conference that will result in a decision, which the Commission will publish.

A hearing is a more formal proceeding, which is conducted in public. A hearing will only be conducted if the Commission considers it is appropriate in the circumstances. At a hearing, evidence may be given by witnesses either orally or in the form of affidavits. Each party will have the opportunity to make submissions and the Commission will then make a binding decision.

Parties represent themselves at determinative conferences and arbitration hearings. A party will generally require permission to be represented by a lawyer at a conference or an arbitration hearing.  

The Commissioner overseeing the conference or hearing is required to decide whether the dismissal was harsh, unreasonable or unjust.  In making this decision, a number of factors must be taken into account.  

These include:

• whether a valid reason existed for the dismissal
• whether the applicant was told why they were being dismissed and given a chance to respond
• whether they were previously warned about performing their duties poorly (if this was the reason you were dismissed), and
• any other factors that are relevant.

The Commission may order that the claim be dismissed if it does not find that the dismissal was unfair.  

If the Commission finds that the dismissal was unfair, it may order:

• that the applicant be reinstated into the job and receive back pay;
• that the applicant be paid financial compensation.

The maximum amount of compensation is usually the equivalent of 26 weeks of pay or, if the applicant’s earnings are more than $167,500 per annum, half of that amount. The maximum compensation amount is rarely awarded.

Appealing a decision

If a claim of unfair dismissal is unsuccessful, the applicant cannot appeal the decision of the Fair Work Commission unless it grants them the right to do so. The Fair Work Commission will only grant the right to appeal if it considers it to be in the public interest to allow an appeal.

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