What determines unfair dismissal in NSW?
Unfair dismissal is defined as a termination of employment that is harsh, unjust, or unreasonable. In NSW, the legislation that governs unfair dismissal is primarily derived from the Fair Work Act 2009 (Cth), which is a federal law that applies across Australia, including NSW. The Fair Work Act establishes the national framework for employment relations and provides protection to employees against unfair dismissal. The NSW government also has to govern its own legislation on unfair dismissals, which is known as the Industrial Relations Act 1996 (NSW).
Suppose an employee believes they have been unfairly dismissed. In that case, they can lodge a claim with the Fair Work Commission (‘FWC’), the independent statutory body responsible for administering and enforcing the Fair Work Act. The FWC assesses the case based on the evidence provided by both the employer and the employee, taking into account the circumstances surrounding the dismissal. If the FWC determines that the dismissal was unfair, it may order remedies such as reinstatement or compensation.
What is needed to establish unfair dismissal in NSW?
Certain elements must be considered based on the legislation to prove unfair dismissal in NSW. Here is a summary of what is needed to establish unfair dismissal, under the Fair Work Act:
- Valid reason: The employer must demonstrate that there was a valid reason for the dismissal. Section 387(a) of the Fair Work Act 2009 (Cth) outlines that a valid reason may be related to an employee’s capacity, conduct, or performance.
- Procedural fairness: The employer must have followed a fair process in making the dismissal decision. This includes giving the employee an opportunity to respond to any allegations or concerns before the dismissal. Section 387(b) of the Fair Work Act highlights the importance of procedural fairness.
- Unreasonableness: The dismissal must not have been harsh, unjust, or unreasonable. Section 387(c) of the Fair Work Act states that the overall dismissal decision needs to be considered, taking into account factors such as the size and resources of the employer.
What is the standard of proof required to establish unfair dismissal in NSW?
In NSW, the standard of proof required to establish unfair dismissal is based on the balance of probabilities. This means that the evidence provided must show that it is more likely than not that the dismissal was unfair.
What are valid reasons for dismissal in NSW? Valid Reasons for Dismissal in NSW?
In NSW, valid reasons for dismissal, which may be considered fair, can vary depending on the specific circumstances and facts of each case. However, the Fair Work Act provides some general guidelines regarding valid reasons for dismissal. These reasons are not exhaustive and are subject to interpretation by the FWC based on individual circumstances. Here are some examples of valid reasons for dismissal:
- Unsatisfactory performance: If an employee consistently fails to meet the reasonable expectations of their role and, despite appropriate support and feedback, their performance does not improve.
- Misconduct: Instances of serious misconduct such as theft, fraud, violence, or serious breaches of workplace health and safety rules can be valid reasons for dismissal. However, the severity of the misconduct and whether procedural fairness was followed in the disciplinary process will be considered.
- Incompatibility: If an employee is unable to work harmoniously with their colleagues or superiors despite attempts to resolve the conflicts and maintain a productive work environment.
- Redundancy: When an employer no longer requires an employee’s job to be performed due to operational changes, technological advancements, or business restructuring. Redundancy can be a valid reason for dismissal if proper consultation, notice, and redundancy entitlements are provided.
- Incapacity: If an employee is unable to perform their role adequately due to a lack of necessary skills, qualifications, or capabilities, and reasonable efforts have been made to provide training or alternative roles.
- Breach of employment contract: If an employee breaches a significant term of their employment contract such as unauthorized disclosure of confidential information or serious breaches of company policies.
It’s important to note that the validity of these reasons may vary depending on the specific circumstances, the nature of the employment, and the industry. It’s advisable to consult the Fair Work Act, seek legal advice, or contact the FWC directly for accurate and up-to-date information regarding valid reasons for dismissal in NSW.
How is an Unfair Dismissal Payout Determined in NSW
The amount of an unfair dismissal payout in NSW varies on a case-by-case basis and is dependent on several factors, including the circumstances of the case, the length of employment, the employee’s income, and the remedies sought. There is no fixed or standard amount for unfair dismissal payouts in NSW. If the FWC determines that an employee has been unfairly dismissed, it has the power to order various remedies, which may include:
- Reinstatement: The FWC may order the employer to reinstate the employee to their former position or a comparable position within the company.
- Compensation: The FWC may award compensation to the employee as a form of monetary redress for the unfair dismissal. The compensation amount can vary and is based on factors such as the employee’s financial loss, the impact on their employment prospects, and any mitigating factors.
However, there are statutory limits on the amount of compensation that can be awarded by the FWC. These limits are outlined in the Fair Work Act. The maximum amount of compensation that can be awarded for unfair dismissal is capped at the lesser of:
- The amount of remuneration received by the person, or that they were entitled to receive (whichever is higher) in the 26 weeks before the dismissal, or
- Half the amount of the high-income threshold immediately before the dismissal.
If the employee was on leave or was not receiving full pay, the amount of remuneration will be calculated with reference to reg 3.06 of the Fair Work Regulations.
From 1 July 2021, the high-income threshold was $158,500 per annum and from 1 July 2022, it is $162,000. Therefore, the compensation cap is:
- $79,250 for a dismissal that occurred on or after 1 July 2021 and before 1 July 2022, and
- $81,000 for a dismissal that occurred on or after 1 July 2022.
It is important to note that these compensation limits may change over time as they are subject to periodic review and adjustment by the FWC. Therefore, it is advisable to consult the most up-to-date legislation or seek legal advice for the current statutory limits on unfair dismissal payouts in NSW.
Legal Advice:
If you have any questions or concerns regarding unfair dismissal and your rights as an employee in NSW, Legal Kitz may be able to assist you. Click here to request to book a FREE consultation with one of our highly experienced solicitors today or contact us at [email protected] or by calling 1300 988 954.