Unfair dismissal process times blow out: FWC report

Analysis

Unfair dismissal process times blow out: FWC report

Processing an unfair dismissal claim has blown out to 34 days, according to the Fair Work Commission's annual report, with the vast majority still settled during conciliation. Of those, one in four payouts were in the $6000-8000 range.

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Sorting out an unfair dismissal application – from lodging an application to finalising conciliations – now takes the Fair Work Commission 34 days. That’s a 21.4% increase on the previous year’s figure of 28 days, according to the commission's annual report

The workload of the commission in terms of unfair dismissal applications has remained flat. In 2015-2016 there were 14,694 unfair dismissal cases, compared to 14,624 the previous year. That’s a 0.5% increase. 

General protections applications involving dismissal had been increasing but in 2015–16 plateaued at a level similar to the previous reporting period.

The report noted that commission members held 16,683 hearings and conferences (all types, not just unfair dismissal) in 2015-16 “which is fewer than the previous year”.

Unfair dismissal conciliations


However, nearly 90% of unfair dismissal applications never make it to a final decision or order – most are settled during conciliation. 

“As a result, while unfair dismissals comprised 40% of applications to the commission, they represented just 12 per cent of matters concluded by a decision or order during the year,” the commission says.

Of the 10,850 unfair dismissal conciliations, 5122 (47.2%) were settled with a combined monetary and non-monetary outcome. A further 1712 were settled with money (15.8%) and 1624 (just under 15%) were settled without money. 

A mere 71 (about 0.7% of the total) were settled involving some kind of reinstatement (figures here include both with, and without, money and miscellaneous other). 

Conciliation money


Where there is an unfair dismissal conciliation, about 27% settle on a figure in the $6000 to $8000 range. A further 19% settle in the $15K to $20K range and 13% settle for a couple of thousand dollars. 

Unfair dismissal hearing/conference results


About 1000 unfair dismissals were heard in 2015-2016. Most, 769 (74.3%), were upheld. Objections were dismissed in 265 cases, most under the commission’s s587 power to dismiss if the application is frivolous, vexatious or has no reasonable prospect of success. 

Decisions on merits 


The commission decided 326 unfair dismissal cases on their merits in 2015-2016.
 
Of those, it was decided that in 130 applications the dismissal was fair and the other 196 the dismissal was unfair. Compensation was awarded in 135 of the unfair dismissal cases. A variety of outcomes, including “no remedy”, were recorded in the remaining 61 cases. 

Compensation was awarded in most cases. In about 55% of cases the amount awarded was less than $10,000. In about 18.5% of cases the amounts ordered were in the range of $20,000-plus.  

More phone and video conferences


Geographically, as may be expected, most conferences and hearings (all types, not just unfair dismissal) were held in the major population centres: Melbourne – 2228; Sydney 1817, and Brisbane – 894.

There were also an increasing number of hearings and conferences held by phone and video conferences. In 2015–16 there were 4440 telephone and video conferences and hearings, an  increase of 25.8 per cent over four years. 

What this means for employers


Given the monetary values for settlement by conciliation and/or on merits (more than 55% were heard on merits for less than $10,000), unless the former employee’s application is manifestly so bad as to offend against all principles of natural justice and or community sentiment or is for a large amount of money, then it is much better to try and settle. 

And that’s especially so when all the direct and indirect costs – lawyer fees, the value of HR manager time, line manager time, witness time, travel (and possibly accommodation), and miscellaneous costs are taken into account. 

However, employers may feel that routinely settling runs the risk of so-called “moral hazard” i.e. there would be no reason for former employees not to ‘have a go’ with an application if they feel the employer will cave in.
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