An employee who is dismissed from his or her employment has two different ways to seek compensation under the Fair Work Act 2010, if the dismissal is unlawful.
Claim for unfair dismissal
If an employee has been unfairly dismissed, then an application can be made to the Fair Work Commission within 21 days of the dismissal. Note that the time limit is no longer 14 days – it is 21 days, as it was before the Fair Work Act was first enacted.
Late applications will only be allowed in exceptional circumstances. If an application is even one day late, an employee must first of all obtain the leave of the Commission to allow the unfair dismissal application to be considered. This can be a lengthy and costly exercise, and obtaining leave Commission is not guaranteed.
Therefore, employees should comply strictly with the 21 day lodgment rule so as to avoid the risk of a claim being rejected for being lodged out of time.
Claim for a breach of the General Protections under the Fair Work Act.
An employer can also make an application under the General Protection provisions in the Fair Work Act. This is sometimes referred to as an adverse action claim.
Adverse action means:
(a) an employee has been dismissed;
(b) an employee has been injured in his or her employment;
(c) the position of an employee has been altered to the employee’s prejudice; or
(d) the employee is a victim of workplace discrimination when compared to how other employees are treated.
Adverse action is the effect of an employer’s actions. Adverse action will be unlawful if the action was taken by the employer against the employee because of one of the following reasons:-
(a) violation of a workplace right;
(b) interference with the employee’s rights to engage in lawful industrial activity; or
(c) workplace discrimination (which in this context means a decision taken by the employer because of the employee’s race, color, sex, sexual preferences, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction, or social origin).
So if an employee has been dismissed because of a violation of his or her workplace rights; or because of lawful Union or industrial activity; or because of workplace discrimination, the employee has a further remedy to seek compensation.
An application for an adverse action claim (breach of General Protections) must be lodged within 21 days of the dismissal. However, an employee must decide whether which action to commence: an unfair dismissal claim or an application under the adverse action provisions of the Act. An employee cannot lodge both.
The time limit for the second type claim [adverse action] was 60 days but the Government pegged it back to 21 days to keep in line with the unfair dismissal time limit. This was done to prevent claimants from what is called “forum-shopping”.
In cases where an employee has not been dismissed but seeks compensation for, say workplace discrimination or a violation of workplace rights whilst still employed, there are different time limits and a different pathway to seeking compensation. [See different link for discussion here].
In the case of unfair dismissal, if re-instatement of employment is not deemed appropriate by the Commission, then compensation can be awarded up to a maximum of 26 weeks of the employee’s base remuneration, or $61,650.00, whichever is the higher.
The Fair Work Commission cannot award compensation for “pain and suffering” that is shock, distress or humiliation, or other hurt caused by the manner of the person’s dismissal.
Compensation will be awarded based on largely economic factors such as: the employer’s length of service; what reasonable steps have been taken to get other work [the duty to mitigate loss]; what income has been earned since the dismissal, if any; what would have been earned if the employee had not been dismissed; and the impact of any compensation order on the viability of the employer’s enterprise.
In the case of an adverse action claim, a dismissal case will typically start with a Conciliation Conference in the Fair Work Commission. If the case does settle at the conference and the Commission is satisfied that all reasonable attempts were made to resolve the case, then the Commission will issue a Certificate to that effect.
A claimant can then commence legal proceedings in the Federal Court or the Federal Magistrates’ Court. There is no cap on the amount of compensation in the courts, which can include amounts for pain and suffering.
Claims for adverse action also have the advantage that once a claimant has established the breach, the onus shift to the employer to prove that the dismissal was not unlawful. This is a handy tool for a claimant who has been dismissed unlawfully – the employer must prove otherwise!
Potential claimants are strongly recommended to seek advice as soon as they are dismissed, because in both cases of unfair dismissal or adverse action there is 21 day time limit for lodging claims at the Fair Work Commission.
In some cases, claimants may have an alternative or better claim as a result of a breach of their employment contract; a possible discrimination claim at the Victorian Equal Opportunity & Equal Rights Commission (or at VCAT); or may be able to seek redress from the Fair Work Ombudsman for award breaches or violations of the National Employment Standards which contains the “safety net” of workplace conditions under the Fair Work Act.
For further information or to arrange a consultation, contact our team, Pippa Sampson.
The above is general information only and does not constitute legal advice.
Specific circumstances vary and should be investigated before any action is commenced.