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Unfair dismissal – new law

Date : 01 Jul 2009

Unfair dismissal law changed on 1 July 2009. The exemption from unfair dismissal for businesses with fewer than 100 employees has been reduced. Employees can complain about unfair dismissal if their business employs 15 or more staff.

Time limit for lodging a claim

Claims for unfair dismissal must be lodged within 14 days of dismissal. The decision makers (Fair Work Australia) may allow extra time in exceptional circumstances.

What is unfair dismissal?

Unfair dismissal may be found where an employee is dismissed in a harsh, unjust or unreasonable way that is not consistent with the small business Fair Dismissal Code (link below).

Dismissal could include an employee being forced to resign because of their employer’s conduct.

Operational reasons will no longer be valid excuse for dismissing an employee.

What is not unfair dismissal?

Unfair dismissal does not include a person employed under a contract or for a particular task if their employment was terminated at the end of the contract or completion of the task. An employee may be eligible if their set contract was written to avoid the employer’s unfair dismissal obligations.

Seasonal and casual workers are not eligible unless the casual work was regular and systematic.

Businesses may dismiss staff if they need to make a genuine redundancy.

Harsh, unjust and unreasonable treatment

When Fair Work Australia is considering whether treatment is harsh, unjust and unreasonable it looks to see if :

there was a valid reason for ending the employment
the person dismissed was notified about the reason
a support person was allowed to be included in discussions about the dismissal
the employee was warned about any unsatisfactory performance beforehand
the size of the business and how this may have impacted on procedures that were followed
the business lacked human resource expertise and whether that would have been likely to impact on the dismissal.
any other things that they think are relevant.

Probation period

Small business employees

An employee must have worked for an employer continuously for one year before they can make a claim for unfair dismissal.

A small business is one that has fewer than 15 full time employees (or equivalent). Casual employees are included in the head count if they are employed on a regular basis. Related business entities are counted as one business.

Larger business employees

Employees in businesses with more than 15 staff must have been continuously employed for six months before they are eligible to apply.

Fair Work Australia

A new independent body has been established under the new law. Although Fair Work Australia will not be fully operational until January 2010, it will make decisions about unfair dismissal from 1 July 2009.

When fully operational it will replace the Industrial Relations Commission, Workplace Authority, Australian Industrial Registry and the Fair Pay Commission to become a single site for multiple functions that relate to industrial relations.

Fair Work Ombudsman

The new ombudsman will provide specialist help for small and medium sized businesses to give advice to employers who are considering dismissal of employees. This ombudsman will replace the Workplace Ombudsman on 1 July 2009.

The Ombudsman’s Office will employ inspectors with powers to enter workplaces and conduct interviews to make sure that the employment laws are being followed.

New court divisions

Fair Work Divisions are established in the Federal Magistrates Court and the Federal Court from 1 July 2009. These divisions will hear cases that arise under the new Act.

More information

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Last reviewed: 26 June 2009 Last modified: 07 July 2009