Unfair dismissal — what’s ‘harsh, unjust or unreasonable’?

Analysis

Unfair dismissal — what’s ‘harsh, unjust or unreasonable’?

This article summarises the meaning of ‘harsh, unjust or unreasonable’ in the Fair Work context of unfair dismissal cases.

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This article summarises the meaning of ‘harsh, unjust or unreasonable’ in the Fair Work context of unfair dismissal cases.

A number of different principles must be taken into account by Fair Work Australia (FWA), or the relevant court, when determining a person’s application of unfair dismissal. These principles have existed for many years and their meaning has generally remained unchanged.

While it is critical there must be a valid reason for the applicant’s dismissal (the subject of a previous article in WorkplaceInfo), it may still be considered by FWA to be ‘harsh, unjust or unreasonable’. This article summarises what is meant by this expression, which is prescribed by the Fair Work Act 2009, as well as any other matters that FWA considers relevant.

General meaning of ‘harsh, unjust or unreasonable’

Under s385 of the Fair Work Act, a person has been unfairly dismissed if FWA is satisfied that: 
  • the person has been dismissed; and
  • the dismissal was harsh, unjust or unreasonable; and
  • the dismissal was not consistent with the Small Business Fair Dismissal Code (where the employer employs fewer than 15 employees); and
  • the dismissal was not a case of genuine redundancy.
While the Fair Work Act specifically refers to the matters it must take into account when determining the harshness, etc, of a dismissal, decisions by the relevant industrial courts and tribunals have determined generally the expression ‘harsh, unjust or unreasonable’ to mean:
  • ‘harsh’ — because of its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the alleged offence; or
  • ‘unjust’ — because the employee was not guilty of the alleged offence on which the employer acted; or
  • ‘unreasonable’ — because it was decided on inferences that would not reasonably have been drawn from the material before the employer.
It may be that the termination is harsh but not unjust or unreasonable; unjust but not harsh or unreasonable; or unreasonable but not harsh or unjust. In many cases the concepts will overlap.
Example
 
The one termination of employment may be
  • unjust because the employee is not guilty of misconduct on which the employer acted
  • unreasonable because it was decided on inferences which could not have reasonably been drawn from the material before the employer
  • harsh because the consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the conduct in respect of which the employer acted.
‘Fair go all round’

The unfair dismissal provisions are also based on the notion of ‘a fair go all round’. 

Section 381(2) of the Act states that the procedures and remedies under unfair dismissal law are intended to ensure that ‘a fair go all round’ is accorded both the employer and employee concerned. The application of this principle is the overarching consideration of FWA in unfair dismissal applications.

A legislative note refers to the fact that the expression ‘a fair go all round’ was used in Loty & Holloway v Australian Workers’ Union (1971) AR (NSW) 95.

Eligible employee

Under s382 of the Fair Work Act, a person is protected from unfair dismissal if, at that time, the person is an employee who completed the relevant minimum period of employment (6 months if the employer employs 15 employees or more — 12 months if the employer employs fewer than 15 employees), and a modern award covers the person, or an enterprise agreement applies to the person in relation to the employment, or the sum of the person’s annual rate of earnings and such other amounts (if any) worked out in relation to the person is less than the high income threshold (currently $118,100 pa).

Criteria for considering harshness, etc

Section 387 of the Act provides that in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:
  • whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
  • whether the person was notified of that reason; and
  • whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
  • any unreasonable refusal of the employer to allow the person to have a support person present to assist at any discussions relating to the dismissal; and
  • if the dismissal related to unsatisfactory performance by the person — whether the person had been warned about that unsatisfactory performance before the dismissal; and
  • the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
  • the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
  • any other matters that FWA considers relevant.
In determining the fairness of a dismissal, FWA is obliged to consider each of these matters and their relevance to the particular case.

Any other matters that FWA considers relevant

Under s387 of the Act, there are eight factors to be considered by FWA in an unfair dismissal application, the last being ‘any other matters that FWA considers relevant’. This means an applicant in an unfair dismissal matter may submit that there were mitigating circumstances that should be considered by FWA in relation to their dismissal.

Examples of relevant circumstances in such matters include:
  • an unblemished employment record
  • the applicant’s length of service with the employer
  • that the conduct was not as serious as the employer made out
  • the employer did not follow their own disciplinary processes.

Source: Paul Munro, IR Consultant.

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