Unfair Dismissal in Victoria

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All Victorian employees are now covered by the federal workplace relations legislation with respect to unfair dismissal in Victoria.  Those laws are contained in the Fair Work Act 2009 (Cth) (FWA).

What is unfair dismissal in Victoria?

Section 385 of the FWA states that a person is unfairly dismissed from his or her job if:

• the dismissal was harsh, unreasonable or unjust
• the employer stated that the termination of employment was due to redundancy, and it was not a genuine redundancy
• in the case of small business employee, the dismissal was not, consistent with the Small Business Fair Dismissal Code. 

For the purposes of the unfair dismissal laws, a person is said to have been dismissed where:

• they have had their employment terminated
• they have been forced to resign as a consequence of their employer’s behaviour (constructive dismissal). 

Common scenarios where an employee may be unfairly dismissed include where a redundancy is not a genuine redundancy, where no reason is given to the employee for the dismissal, where the employee was not informed of the reasons for their dismissal, or where the employee was dismissed for poor performance but never warned that they were performing poorly.

What is not unfair dismissal in Victoria?

A person will not be found to have been dismissed if:

• they have been working under a fixed term contract and the term of that contract expired without a renewal
• the termination of their employment was due to a genuine redundancy

A genuine redundancy exists if the job is no longer required to be performed by anyone, and the employer has complied with any obligations it has under an award or enterprise agreement to consult with the employee regarding redeployment and other required matters, prior to making them redundant.  

Small business employees

A small business employee is a person employed by a business with less than 15 employees.

The Small Business Fair Dismissal Code provides guidance to small business owners on when summary dismissal is justified. A small business employee may be summarily dismissed when their employer believes on reasonable ground that they have behaved in a way that amounts to serious misconduct.

An employee is guilty of serious misconduct if they have committed an act of violence at work, stolen from their employer or committed a serious breach of occupational health and safety procedures.  

In any other situation, an employee must be given a valid reason for their dismissal.

Eligibility to bring an unfair dismissal claim

A person must satisfy eligibility requirements in order to make an unfair dismissal claim before the Fair Work Commission. These eligibility requirements are the first thing that will be checked by the Commission at an unfair dismissal conference or hearing.  

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

Secondly, their annual earnings (excluding superannuation) must be less than the prescribed high-income threshold of $167,500, or, if their earnings are over this amount, they must be covered by an award or enterprise agreement.  

Casual employees are generally excluded from bringing an unfair dismissal application, unless they have regular hours of employment and an ongoing expectation of work.  

Trainees and contractors are also generally excluded from unfair dismissal laws.

Procedure for unfair dismissal claims

Applications for making unfair dismissal claims must be lodged with the Fair Work Commission within 21 days of the dismissal.  This timeframe is strictly enforced and only in rare circumstances will the Commission allow an application to be heard if it is filed after this deadline.  

The application form for unfair dismissals is located here.  After a person has lodged an application, a representative of the Fair Work Commission will contact them to arrange a conciliation meeting with their former employer, which is held by an independent conciliator from the Commission.  

At the conciliation, the parties may agree to settle on terms including:

• providing an apology
• providing a reference or statement of service
• payment of financial compensation
• reemployment.  

If conciliation is unsuccessful, a member of the Fair Work Commission will hold a conference or a hearing to resolve the dispute. Fair Work Conferences are generally private and hearings are held in public. The Commission will inform parties of which way the matter is to be dealt with by issuing a ‘Notice of Listing’. Parties can also give evidence to the Commission in the form of witness statements.

Parties will require permission from FWC to be represented by a lawyer at the conference or hearing unless they are from a union. 

Unfair dismissal decisions

The member overseeing an unfair dismissal conference or hearing must take into account a number of factors in deciding whether the dismissal was harsh, unreasonable or unjust. These include whether a valid reason existed for the dismissal, whether the employee 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 they were dismissed) and any other factors that are considered to be relevant.  

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

• the claim be dismissed
• the employee be reinstated in the job and receive back pay
• the employee be paid financial compensation (the maximum amount of which will usually be the equivalent of 26 weeks of remuneration or, if their earnings are more than $167,500 per annum, half of that amount). The maximum compensation amount is rarely awarded.

Appealing a decision

If a person makes an unfair dismissal claim and it is unsuccessful, they cannot appeal the decision of the Fair Work Commission unless it grants leave to do so. It will only do this if it considers it to be in the public interest to let the person appeal the decision. 

If the appeal is granted, a full bench of members of the FWC will hear the appeal.  If the applicant is unhappy with the decision on appeal, they can make a further appeal to the Federal Court.

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