Termination of Employment - Unfair Dismissal in NSW

Published: 13th January 2012
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Most claims in relation to termination of employment fall into three categories:

unfair dismissals under the FW Act;

dismissals otherwise prohibited under the FW Act; and

Common law claims for wrongful dismissal.

This section will cope with unfair dismissals and Common law claims for wrongful dismissal.

The "General Protections" section of this chapter deals with other dismissals that are otherwise prohibited under the FW Act.

This chapter does not handle claims under other legislation relating to termination of employment, such as equal chance legislation and the Trade Practices Act 1974 (Cth).

Unfair dismissals

Since 1 July 2009 a new program of unfair dismissals has been in operation.

A person has been "unfairly dismissed" under section 385 of those FW Act if all the following apply:

the person has been dismissed; and

the dismissal was harsh, unjust or unreasonable; and

the dismissal was not consistent With all the little organization Fair Dismissal Code; and

the dismissal was not a case of real redundancy.

The person must be protected in one unfair dismissal to be eligible to apply for a solution for unfair dismissal (see: "Persons protected from one unfair dismissal", below).


In considering whether a termination was harsh, unjust or unreasonable, the following have to be considered (s.387 FW Act):

whether there is really a valid reason for the dismissal connected With the employee's capacity or conduct;

whether the employee was notified of The exact reason relied on by the employer;

whether the employee was given an chance to respond to the allegations made in relation to the employee's conduct or performance;

any unreasonable refusal of those employer to allow the employee a person to assist in discussions related to the termination;

if the termination related to performance, whether warnings were given;

the degree to And this the size of these employer impacted upon the procedures followed in effecting the termination; and

the degree to And also this the absence of dedicated human resource management specialists impacted upon the procedures followed in effecting the termination,

as nicely as other relevant matters.

Case study

In Woodman v the Hoyts Corporation [2001] AIRC 694, a full bench of those AIRC reinstated a casual cinema worker who was accused of allowing Yet another off-duty employee to take a company product from the Candy Bar without having paying and later lying concerning the incident. The full bench located that the employee's conduct amounted to a valid reason for termination but that termination in all the cases of the case was disproportionate. The employee had not himself participated in the theft along with other the lie was not premeditated or intended to benefit the employee himself. The AIRC was satisfied "in all the circumstances" that reinstatement was appropriate.


For the purpose of section 385 of those FW Act, the person has been dismissed if they were terminated at the initiative of the employer or they were forced to resign due in to the fact of these conduct or course of conduct of those employer, (s.386).

A person should never be dismissed, towards the purpose of these unfair dismissal provisions, if:

they were employed under a contract of employment to get a specified period or specified task or specified season and the employment ended in the end of those period, task or season;

they were utilised under a training arrangement to get a specified period or to the period of these training and the employment ended at the end of these training; or

they were demoted but the demotion doesn't involve a serious reduction in their remuneration or duties (s.386).

If the person has not been dismissed they would not be able to make out the necessary elements of section 385 of the FW Act to the termination to be an unfair dismissal.


The Minister for Workplace Relations has declared a small enterprise Fair Dismissal Code under section 388(1) of the FW Act. A person's dismissal will possibly be consistent With the Code if the employer was a small business employer in the time of these dismissal as well as the employer has complied With the provisions of those Code in relation into the dismissal (s.388 FW Act).

For the period from one 1 July 2009 to 31 December 2010 the definition of "small enterprise employer", was a enterprise with other less than it is 15 full-time equivalent employees. The procedure of calculating the wide range of full-time equivalent employees is by making use of the average weekly total number of hours worked at the business at the four weeks before the termination divided by 38 (see: Item 2(2) of Schedule 12A of those FW(TPCA) Act).

For the period after 1 January 2010, the definition of "small business employer" is truly a enterprise with other less than 15 employees by head count.

The code states that a dismissal will likely be fair where an employer dismisses an employee where the employer believes on reasonable grounds that the employee's conduct is sufficiently severe to justify immediate dismissal. Therefore, under the Code, an employer doesn't need to prove the misconduct the reality is occurred.

If the employer is actually a "small organization employer" as well as the employer complied With the provision of those code, the termination will likely be deemed to be fair along with the elements of an unfair dismissal required for section 385 will never be made out.

If the employer is not a little enterprise employer or a little business employer has not complied With the code in terminating the employee, then the dismissal should never be consistent With all the little business Fair Dismissal Code and the necessary element of section 385 is going to be made out.


A person's dismissal will likely be a genuine redundancy if both of the following requirements are met (s.389 FW Act):

the person's employer no longer requires the person's job to be accomplished by anyone due into the fact of changes in operational requirements; and

the employer in dismissing the employee complied with other any consultation obligations in a modern award or business agreement.

Under section 389(2) of those FW Act it would not be a actual redundancy if it was reasonable to redeploy the person within the employer's enterprise or an associated entity.

If a person's dismissal was identified to be as a result of a real redundancy, the person would not be able to create out the required element of section 385 of these FW Act to the dismissal to be an unfair dismissal.


To make an application for unfair dismissal the person Generating the application must be protected from unfair dismissal. Under sections 382 to 384 of those FW Act, a person is protected in one unfair dismissal if the following applies to them:

The employee has done a minimum period of employment of:

one year for an employee of a small enterprise employer (as defined above);

six months for an employee of a business other compared to a small organization employer.

One of many following applies into the employee at the time of termination:

the employee was covered by a modern award; or

the employee was covered by an company agreement; or

the person's income was less than the high income threshold, currently $118,100.

If the person was a casual employee of a company other than a little organization employer and was used on a regular and systemic basis for far more than six months, as well as the employee had a reasonable expectation that such employment would continue.

If the person was a casual employee of a little company employer and was used on a regular and systemic basis for much more than one year, and had a reasonable expectation that such employment would continue.


The primary solution to get a dismissal located to be harsh, unjust or unreasonable is to reinstate the employee to the same position or to a comparable position as they held before the termination. FWA has the power in confident cases to reinstate a worker to an equivalent position via an associated entity of the employer. A reinstated worker can seek an amount representing their lost wages between the date of termination and at the same time the reinstatement, and to have all employment positive aspects continue to accrue without loss of continuity.

Where reinstatement is inappropriate (for example, where the position has been filled by An additional worker or where tensions in a little workplace could be insurmountable if the dismissed employee returned to work), compensation can be ordered Rather than reinstatement. The maximum compensation payable to employees covered by an award is six months wages; as well as for non-award employees is half the quantity of the high income threshold (discussed above in "Persons protected from one unfair dismissal") or six months wages, whichever is less.


Applications for a answer for unfair dismissal must be made within Two weeks after the day on And also this the termination took effect, or such period as FWA allows (see: s.394 FW Act). The matters to be taken into account for an extension of time for you to lodge an application happen to be codified in section 394(3) of the FW Act. Importantly, the applicant have to reveal that there were exceptional circumstances.

A great deal of matters must be decided by FWA prior to the merits of an unfair dismissal are considered. These matters are:

whether the application was made within 2 weeks or such further period as FWA allows;

whether the person is protected in one unfair dismissal;

whether the dismissal was consistent With all the little company Fair Dismissal Code;

whether the person was dismissal simply because of real redundancy.

The first step to get a worker who applies to get a remedy for unfair dismissal is often a conciliation conference With all the employer in the AIRC. If the matter is not resolved at that stage, it then frequently proceeds through arbitration. The FW Act provides FWA considerable discretion in relation to the procedure of finalising the claim.

Appeals to a Full Bench of FWA can be made where there has been an error of law or a serious error of fact.

Costs against a party in an unfair dismissal can only be awarded against an Applicant if an application was made vexatiously or without having reasonable cause, or if it need to are already apparent in to the Applicant that the application had no reasonable prospect of success. expenses will only be awarded against a Respondent if the response to an application was made vexatiously or without reasonable cause, or if it ought to have been apparent into the Respondent that the response had no reasonable prospect of success (s.611 FW Act)

Costs can be awarded against a lawyer or paid agent where they caused the other party to incur expenses by some unreasonable act or omission or due into the fact they encouraged a person to begin or continue a matter when it need to happen to be apparent to them that the person had no reasonable prospects of success (s.401).

Common law


Workers who are not entitled to bring proceedings for unfair dismissal may possibly nonetheless be entitled to bring proceedings elsewhere towards the wrongful termination of their contract of employment.

If the contract is for a fixed period, it terminates when that period expires; no special notice is required. If the contract is to get a fixed period and too the contract is terminated by the employer just before the end of these fixed period, the employee maybe able to sue for damages relating to the remainder of the fixed period.

If the contract is not to get a fixed period, as well as the employee is dismissed, or if the employee is dismissed before the end of the contract, then there may be an action for wrongful dismissal. in the absence of misconduct or any other situations justifying immediate dismissal, the employee is entitled to be given notice according to the written contract of employment (if any), or if There is certainly no express term to the period of notice the employee could be entitled to rely upon an implied term of reasonable notice. The question of what's reasonable will depend about the instances (including position, seniority, salary, length of service and age).

An employee who can demonstrate that the dismissal was wrongful has a claim for damages. the quantity of damages may relate into the wages that could have been earned through the "reasonable" period of notice, taking into account whether the employee has in turn identified work.


Unless specifically authorised by an award or employment agreement, an employer has no general right to suspend employees with out pay, but an employee who isn't ready, willing and able to work based on the obligations under the contract of employment may not be entitled to be paid.

At Common law, an employer does not have the correct to stand down employees with out pay when they cannot be usefully employed. Unless There is certainly some provision at the contract of employment or award in to the contrary, an employer who cannot usefully hire their employees has the alternative of either paying them wages through the period or dismissing them. In dismissing an employee in these circumstances, the employer ought to take careful note of the unfair dismissal provisions (see: "Unfair dismissals", above).

Some awards permit deductions of pay where employees cannot be usefully employed for reasons such as a strike, a breakdown of machines or a stoppage of work for And this the employer cannot reasonably be held responsible.

For more information about unfair dismissal and free qualified avice for you or your business, please visit Unfair Dismissal Experts

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