To help you to avoid the costly consequences (in time and legal fees) of a claim proceeding unnecessarily, here are some important jurisdictional objections to unfair dismissal claims that every employer should be aware of.
WHAT YOU NEED TO KNOW:
- There is a strict 21-day time limit in which an unfair dismissal application must be filed.
- Not everyone is able to make an unfair dismissal claim. Employees are protected from unfair dismissal. Whereas, independent contractors, volunteers or vocational placement workers are not.
- There is a minimum period of employment that needs to be met before an employee is entitled to make an unfair dismissal claim.
- Ultimately, the Fair Work Commission will have the final say over unfair dismissal jurisdictional objections.
JURISDICTIONAL OBJECTIONS TO UNFAIR DISMISSAL CLAIMS
- The application was lodged more than 21 days after the dismissal took effect
Whether the application was made within the required time period (currently 21 days) is a matter that must be determined by the Fair Work Commission (the Commission) before the merits of the application can be considered.
If the application has been filed out of time (namely, more than 21 days after the dismissal took effect), the application will generally be dismissed by the Commission. This is a very good reason to ensure that you check, in every instance, whether the application has been filed in time.
The Commission does have the power to accept an application that has been filed out of time where there were 'exceptional circumstances' for the late lodgement. Therefore, it is important to be aware that even if you do raise it as an 'out-of-time' objection, the matter may proceed to a jurisdictional hearing in order for the Commission to determine whether there are any 'exceptional circumstances' which would justify the exercise of its discretion to accept the 'out-of-time' application.
As a general rule, the longer the time period between the expiry of the 21 days and the lodging of the application, the less likely that the Commission will exercise its discretion to accept the 'out-of-time' application.
- The applicant is not an employee
Only employees are protected from unfair dismissal. Accordingly, independent contractors, volunteers and workers on vocational placements are not entitled to make unfair dismissal claims. Likewise, labour hire workers are not employed by the host business and are therefore not entitled to bring unfair dismissal claims against the host business.
- The applicant was not dismissed
The fact that an employee has resigned from his/her employment does not necessarily mean that the employee has not been dismissed (at least for the purposes of the unfair dismissal jurisdiction). Section 386 of the Fair Work Act 2009 (Cth) (the Act) extends the definition of 'dismissed' to situations where:
- a person's employment has been terminated at the employer's initiative; or
- a person was forced to resign because of the conduct or course of conduct engaged in by the employer (commonly known as a constructive dismissal).
However, a dismissal does not include situations where a person was employed under a term contract (i.e. for a specified period of time, specified task or for the duration of a specified season) and the employment comes to an end of that period.
- The dismissal was a case of genuine redundancy
An unfair dismissal application cannot be made if the dismissal was a case of genuine redundancy. For a dismissal to be a genuine redundancy, the following requirements need to be satisfied:
- the employer no longer requires the person's job to be performed by anyone because of changes in the operational requirements of the employer's enterprise; and
- the employer has complied with any obligation imposed by an applicable modern award or enterprise agreement to consult about the redundancy; and
- it was not reasonable in all of the circumstances to redeploy the person within the employer's enterprise or the enterprise of an associated entity of the employer.
If the above points are not satisfied, the dismissal will not be a case of genuine redundancy.
- The applicant did not meet the minimum employment period
An employee may only make an application for an unfair dismissal remedy if they have completed a requisite minimum employment period which is either:
- six months; or
- one year where the employer is a small business employer.
A small business employer is a business that employs fewer than 15 employees. The number of employees is determined by a head count of all:
- full-time and part-time employees;
- casual employees who are employed on a regular and systematic basis; and
- employees of any associated entities of the business.
- The applicant earnt more than the high income threshold
At the outset, it is important to note that if an employee is covered by a modern award or enterprise agreement, it is irrelevant that the employee earns more than the high income threshold. This jurisdictional objection only applies where an employee is award/ agreement free.
The current high income threshold is $138,900 per annum. This figure is adjusted annually on 1 July.
For the purposes of calculating whether an employee earns more than the high income threshold (where an employee's wages are not clearly in excess of the threshold), the following are taken into account:
- the employee's wages;
- amounts applied or dealt with in any way on the employee's behalf or as the employee directs;
- the agreed value of non-monetary benefits (i.e. company motor vehicles, mobile phone plans and life insurance policies); and
- amounts or benefits prescribed by the Fair Work Regulations.
- The dismissal was consistent with the Small Business Fair Dismissal Code
A person has not been unfairly dismissed if the employer is a small business employer (as defined in point 5 above) and the Commission is satisfied that the dismissal was consistent with the Small Business Fair Dismissal Code (the Code). The Code is available on the Commission website and should be accessed and utilised by all small business employer when implementing any dismissal.
There are a range of other jurisdictional objections that can be raised to unfair dismissal applications including the following:
- the applicant was not a national system employee;
- the applicant was a casual employee and was not regularly and systematically employed and had no reasonable expectation of continuing employment;
- the application has been brought against an entity who is not the employer; and
- the applicant has made multiple applications regarding the dismissal.
Whilst it is important to raise any jurisdictional objections, employers should note that doing so will not automatically result in the unfair dismissal application being dismissed. All jurisdictional objections must be determined by the Commission, which may be done on the papers or by a member holding a conference or hearing (which may occur at the same time as the hearing that deals with the merits of the application dependent on the objection raised) and making a formal decision. As a part of this process, an employer may be required to provide evidence and/or submissions with regard to its objections.
Nonetheless, it is important for employers to ensure that any jurisdictional objections are identified and raised, as doing so may limit the liability of the employer in respect of the claim.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.