What makes a dismissal unfair?

See Fair Work Act 2009 s.385(b)

Only after determining that an employee is protected from unfair dismissal, and that the employee has been dismissed, can the Fair Work Commission determine whether the dismissal was unfair within the meaning of the Fair Work Act.

In doing so the Commission must consider whether the dismissal was harsh, unjust or unreasonable. This is also called determining the merits of the unfair dismissal claim.

There are 3 substantive elements of an unfair dismissal (apart from the fact of the dismissal itself) that the Commission must be satisfied of:

1. the dismissal must be harsh, unjust or unreasonable
2. the dismissal must not be consistent with the Small Business Fair Dismissal Code (where the Code applies), and
3. the dismissal must not be a case of genuine redundancy.[1]

The power to grant a remedy cannot be exercised without the Commission being satisfied about these 3 matters.[2]

See Fair Work Act s.387

It may be that the dismissal is:

• harsh but not unjust or unreasonable
• unjust but not harsh or unreasonable, or
• unreasonable but not harsh or unjust.[3]

The concepts of harsh, unjust or unreasonable may overlap.[4]

A dismissal may be:

• unjust because the employee was not guilty of the alleged misconduct
• unreasonable because the evidence or material before the employer did not support the conclusion
• harsh on the employee due to the economic and personal consequences resulting from being dismissed, or
• harsh because the outcome is disproportionate to the gravity of the misconduct (the punishment does not fit the crime).[5]

In considering whether a dismissal was harsh, unjust or unreasonable, the Commission 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)
• whether the person was notified of that reason
• whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
• any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal
• if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal
• the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal
• 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 the Commission considers relevant.[6]

The phrase 'must take into account' means that each of the above criteria are mandatory and must be considered in determining whether a dismissal is harsh, unjust or unreasonable.[7]

The criteria need only be taken into account to the extent that they are relevant.[8]

Failure to take account of each of the criteria is a significant error of law[9] (and may provide a basis for appeal).

Whether a circumstance existed must then be taken into account, considered and given due weight as a fundamental element in determining whether the termination was harsh, unjust or unreasonable.[10]

The Commission has ultimate discretion in weighing each matter carefully in arriving at a decision.[11]

Facts acquired after dismissal

Facts justifying dismissal, which existed at the time of the dismissal, should be considered, even if the employer was unaware of those facts and did not rely on them at the time of dismissal.[12]

Facts which existed at the time of the dismissal, but came to light after the dismissal may:

• justify the dismissal when it would otherwise be harsh, unjust or unreasonable, or
• render the dismissal harsh, unjust or unreasonable.[13]

Ultimately, the Commission is bound to determine whether, on the evidence provided, facts existed at the time of termination that justified the dismissal.[14]

The reason for the termination need not be that which was given by the employer. It can be any reason underpinned by the evidence provided to the Commission.[15] If the employer seeks to rely on a reason for dismissal other than the reason given or relied upon at the time of the dismissal 'they will have to contend with the consequences of not giving the employee an opportunity to respond to such reason'.[16]