Complaints of unfair or
unlawful dismissal begin with lodging an application with the AIRC 21 days
after the termination takes effect.[15] There must be a termination at the initiative
of the employer.[16] s170CD(1B) specifically excludes a demotion
as falling under the definition of a termination as long as the employee
remains with the same employer and has not suffered a significant reduction in
his/her remuneration. A fee of $50
applies in each lodgement.[17] Although the fee was introduced to discourage
frivolous and vexatious claims, it also prevents some employees (who may now be
unemployed) from making genuine claims.
AIRC must first attempt to
conciliate a complaint of unfair or unlawful dismissal.[18] Where all attempts at conciliation are
unsuccessful, the AIRC is required to issue a certificate stating to that
effect and provide an assessment of the merits of the application.[19] This provision is curious because it requires
a tribunal to predict the outcome of the dispute without the benefit of having
the full facts and arguments considered.
Worthy applicants may abandon their claims at this point as a result of
the AIRC’s (not fully informed) assessment.
Moreover, possible future costs orders against the employee under s170CJ
should he/she proceed to arbitration or court operates as a further
disincentive. The section allows the
AIRC to order costs against parties who act unreasonably in failing to agree to
terms of settlement. The concept of
unreasonableness has been criticised as disadvantaging employees relative to
employers.[20] It is imposing an objective test on
applicants who are commonly distressed and anxious and are making difficult
decisions in short time frames.
Employers on the other hand are much less likely to behave unreasonably
as they are able to take a more distanced 'business approach' to the
proceedings. They are also much more
likely to have previous experience in handling these claims.
While there are merits in
making parties conciliate in unfair dismissal claims (as these situations often
rest upon misunderstandings), it is more difficult to see why claims for
unlawful dismissals must also start with conciliation. Although contraventions in Subdivision C are
not offences, they are still conduct sufficiently serious for the imposition of
a fine by the court.[21] It may be argued there is a public interest
in having the employer punished in those circumstances. A settlement between the parties will mean
the employer escapes liability.
Failing conciliation,
s170CFA puts the applicant for election between doing nothing or proceed to
arbitration by the AIRC (for unfair dismissals) or proceed to court (for
unlawful dismissal). s170CFA has been
criticised for its complexity.[22] The complexity is likely to disadvantage the
uninformed employee relative to an employer.
The employee also has to make that election within seven days which is
an unreasonably short amount of time to seek and act on advice. There is also criticism that employees who
may legitimately wish to pursue a complaint raising both unfairness and
unlawfulness issues must contemplate running actions in two separate forums.[23]
Under the NSW provisions,
there must be a "dismissal" at the initiative of the employer.[24] Since "dismissal" is defined to
include threatened dismissal, this provides broader protection compared to
allegations of "termination" under the Federal provisions. It also potentially affords protection in a
situation of demotion. In Advertiser
Newspapers Pty Ltd v Industrial Relations Commission of SA[25], the
South Australian Supreme Court held that so long as the demotion puts an end to
the contract under which the employee had been engaged, there has been a
“dismissal”. The employee does not lose
the right to complain merely because he/she accepted what is in effect an offer
to perform a different job.
Under s86, the NSWIRC is
similarly required to attempt conciliation of the dispute. Failing conciliation, the dispute is
arbitrated by the commission. However,
the section is set out in much simpler terms compared to s170CFA. There is no requirement for the commission to
make certified statements or provide an assessment of the likely outcome. Employees are hence less likely to be
confused or abandon worthy claims prematurely.
"Fair go all
round"
s170CA(2) provides that the
unfair and unlawful dismissal procedures and remedies are to be determined
subjected to an overriding consideration of "fair go all round" for
employers and employees. This concept is
of vague import. There is much to be
said of the view that the provisions of Part VIA Division 3 should not be
directed to achieving some balance between the interests of employers and
employees in particular cases.[26] They are a charter of rights for employees
directed towards protecting their jobs.
Although it is easier to understand how a balancing process might apply
in assessing remedies for unfair dismissal, it is more difficult to see a
legitimate role for such a concept when assessing whether there has been a
contravention of Subdivision C constituting unlawful termination. Where someone has been dismissed on a
discriminatory ground, attention should be directed at public policy at large
and not upon the fairness between the employee and employer in the immediate
case.
In determining whether a
dismissal was harsh, unjust or unreasonable, the AIRC must consider a mandatory
list of factors including existence of valid reason for dismissal relating to
operational requirements, or conduct or capacity of employee;[27]
notification of the reason;[28]
opportunity to respond;[29]
warning of unsatisfactory conduct;[30]
degree of employer's undertaking, establishment, or service;[31]
and absence of human resources management.[32] As these factors are considered in a single
test, the failure of an employer to fulfil one or more of these factors will
not of itself constitute unfair dismissal.
Its potential impact on employment protection rights has been subjected
to much criticism. As the ACTU comments,
"if the employer does not have a valid reason for the
dismissal…then the dismissal should automatically be unfair. An employer with no good reason for
dismissing an employee is clearly acting unfairly."[33]
It is also difficult to see
why the degree of the employer's undertaking should be a relevant factor in
determining unfair dismissals. As Lacy
SDP says in Pergaminos v Thian Pty,[34] the
significance of this factor in relation to termination procedures is not
reasonably evident:
"Employees who are
about to lose their employment are entitled to expect a fair go, regardless of
the size of the employer's undertaking."[35]
The NSW equivalent of
s170CE(1) is found in s88. Although the
list of factors to be taken into account when determining unfair dismissals
under the IRA (NSW) is largely similar to the WRA (Cth), several differences may
be observed: valid reasons for termination
is not limited to employees' capacity and conduct, or employers' operational
requirements.[36] Similarly, the employee's opportunity to
respond to the reason for termination is not limited to capacity or conduct or
operational requirements.[37] In addition, where the employee seeks
reinstatement and reinstatement is refused, the presence or absence of a reason
for refusal is also a relevant factor.[38] In substance however, little may turn on
these differences. Even though the NSW
provisions do not specifically mention the three valid reasons for dismissal,
s88(b) requires consideration to be given to the nature of the reason
given. It would be difficult to envisage
a fair dismissal which does not relate to conduct, capacity, or operational
requirements. Perhaps the one difference
of substance is that the NSWIRC has the discretion to consider the factors in
s88 but does not have to account for all factors.[39] The NSWIRC’s decisions may hence be less
susceptible to appeal.
Having determined a termination
was harsh, unjust or unreasonable under s170CE(1), two main types of remedies may
be available at the AIRC's discretion: reinstatement and compensation.[40] This is in contrast to an action for breach
of contract under the common law where a remedy would be awarded as of
right. Reinstatement is the primary
remedy and compensation is only to be awarded if reinstatement is
inappropriate.[41] A broad range of factors are considered in
determining appropriateness.[42] The granting of a remedy is limited by s170CH(2),
which provides that a remedy shall not be awarded unless certain factors are
considered. One of the more contentious
factors is "the effect of the order
on the viability of the employer's undertaking, establishment or service."[43]
As with other sections
purporting to exempt small businesses, s170CH(2) should be criticised for
introducing discrimination in remedies between employees based on the size of
their employers, a factor beyond most employees' control.
Despite the legislative
assertion that reinstatement is the primary remedy, compensation orders have
been the remedy in an overwhelming majority of cases in practice.[44] While this may in part reflect the employee's
desire for monetary awards, there is concern that the amount of compensation
awarded tends to be low.[45] The Commission tends to concentrate solely on
lost wages or other fringe benefits, and not upon loss of job security,
distress and lost of self-esteem.
Moreover, a statutory cap over compensation applies.[46] There would not have been a similar cap for
back pay ordered following reinstatement.[47] This cap has a severe impact upon older and
unskilled employees who may have difficulties finding alternative sources of
income. It is questionable whether lower
paid workers should be subject to the same cap as managers and professional
employees who are able to negotiate appropriate contractual arrangements.[48] Ironically, the statutory cap can also leave
employers worst off. An employer who
makes an ex gratia payment to a dismissed employee may still be liable to pay
the maximum compensation under the cap.[49] This is because the tribunal first assesses
the full extent of the applicant's loss (which may exceed the limit), then
awards a compensation for that loss which cuts off at the statutory limit.
Where reinstatement is
ordered, there are often procedural difficulties.[50] Under the WRA (Cth), the AIRC bows out of the
dispute after making an order for reinstatement. This leaves often bitter parties to recreate
the employment relationship.
Reinstatement orders are also inherently speculative- the AIRC has to
conclude whether reinstatement is appropriate based on limited evidence, and
prior to any practical attempt by the parties to actually recreate the
employment relationship. It has been
suggested the better approach is to have a two staged process.[51] There should first be a “cooling off” period
where the employer must attempt to reinstate the employee. Should this be unsuccessful, the parties are
able to reappear before the Commission with hard evidence on whether
reinstatement is really appropriate.
Equivalent NSW provisions
are found in s89. Reinstatement (and
reemployment)[52] are the
primary remedies.[53] But unlike s170CH(6), s89(5) provides that
compensation is awarded where reinstatement is "impractical" (as
opposed to "inappropriate").
It may initially be thought that applying a concept of impracticality
creates a stronger presumption of reinstatement than applying a concept of
inappropriateness. In Donaldson,[54] the
court equated practicability with possibility.
This is in contrast to appropriateness, which the court in Australian Meat Holdings[55] held
involves assessing a broader range of factors.
However, Donaldson and Australian Meat Holdings dealt with
the concept of practicability in the context of the former Industrial Relations
Act (Cth). Practicability under the NSW
provisions has been interpreted in a much broader way. In Hollingsworth,[56] the
Full Bench approved the statement in Nicolson v Heaven & Earth[57] where
Wilcox CJ held impracticable requires and permits the court to take into
account all the circumstances of the case, including whether reinstatement is
likely to impose unacceptable problems or embarrassments, or adverse effects to
productivity or harmony.[58] The terms inappropriate and impractical thus
probably do not materially differ.
Unlawful
termination
Subdivision
C of Division 3 provides that termination of employment on a prohibited ground
or without giving proper notice is unlawful.
s170CM(1) provides that an employer must not dismiss an employee unless
there was proper notice or compensation in lieu of notice. No such notice or compensation is required
where the employee is guilty of serious misconduct. Examples of serious misconduct have been
outlined in regulations. The concept of
serious misconduct has been criticised as being insufficiently clear for
employers and employees.[59] The WRA (Cth) increases the length of notice
period by one week for employees over the age of 45 and have provided at least
two years of continuous service to the same employer.[60] While this recognises the difficulties faced
by older workers in seeking alternative employment, an extra week is in reality
inadequate to ameliorate the significant disadvantages they suffer.
s170CK(2)
provides a list of prohibited reasons for termination. Amongst these is s170CK(2)(g): refusing to
make, sign, extend, vary or terminate an AWA.
While this protection should be welcomed, there is criticism over the
lack of similar protection for employees in relation to Certified Agreements.[61]
In
additional to orders for compensation and reinstatement, the Court can impose a
fine on the employer where a claim of unlawful termination is made out.[62] Overall, the weaknesses of the unlawful
termination provisions lay not so much in the substantive law but in its
insufficient recognition of the wider public interest in discouraging such
behaviour in the workplace.
NSW does
not have an equivalent unlawful termination jurisdiction.
Part VIA Division 3 of the
WRA (Cth) fails to provide adequate protection to dismissed employees. The Act ignores the changing nature of
employment practices in the last decade where the hiring of casuals and contractors
has accelerated. The net effect of the
exclusions is to leave the most vulnerable workers without the benefit of
protection from unfair or unlawful dismissals.
For those unfairly dismissed employees who are covered by Division 3,
obtaining a remedy may still be dependent upon factors totally outside their
control, such as the size of their employer.
The provisions on unlawful dismissal can be criticised for
insufficiently recognising the public interest in discouraging such conduct. Various procedures in lodgement and election
also operate to the disadvantage of the employee. The equivalent provisions on termination
under the IRA (NSW) do not materially differ from the WRA (Cth). But where there are differences, the NSW
provisions generally provide greater protection to dismissed workers.
Bibliography
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to the Senate Economics References Committee – Workplace Relations and Other
Legislation Amendment Bill 1996", D No 42/1996
Blackford R, "Unfair dismissal law and the
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Australian Journal of Labour Law 167
Chapman A, "Termination of Employment under
the Workplace Relations Act 1996 (Cth)" (1997) 10 Australian Journal
of Labour Law 89
Creighton, W. B, “Labour
law: an introduction” 3rd ed, Sydney, NSW: Federation Press, 2000
Dickinson L, Moxham B, Redford B, Smiljaric V, and
Symons J, "Unfair Dismissal Protection for Casual Workers", Discussion
Paper, Job Watch Inc. February 2002
Gay E, "Unfair dismissal claims" (2001)
5(3) Inhouse Counsel
Meggiorin H, "Reinstatement under the
Workplace Relations Act (Cth): Is it practicable, appropriate or just plain
speculative?" (1999) 27 Australian Business Law Review 438
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of application to small businesses", (2002) 15 Australian Journal of
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under the Workplace Relations Act 1996- A fair go all round?" (2001) Vol 1 No 1 Macquarie Law Journal 137
[1]
Thereafter referred to as the WRA (Cth).
[2] Thereafter referred to as the IRA (NSW).
[3] Note 1
at s 170CB(1): these are Commonwealth public sector employees, Territory
employees, Federal award employees employed by a constitutional corporation, or
Federal award employees who are waterside workers, maritime employees or flight
crew officers.
[4] Note 1 at s 170CB(3)
[5] The
exclusions have taken effect through Regulations 30B; 30BA; 30BB; 30BC.
[6] Parliamentary Debates, Senate, 16 May 2002 at 1723.
[7] Note 1 at s 170CC(1)(a) and s 170CC(1)(c).
[8] Bourke v Brown Gouge Rosebud (2000) 103 IR 22.
[9] Dickinson L, Moxham B, Redford B, Smiljaric V, and Symons J, "Unfair Dismissal Protection for Casual Workers", Discussion Paper, Job Watch Inc. February 2002 at 13.
[10] Blackford R, "Unfair dismissal law and the termination of contracts for specified periods of time" (2002) 15 Australian Journal of Labour Law 167.
[11] Pittard M, "Unfair dismissal laws: the problem of application to small businesses", (2002) 15 Australian Journal of Labour Law 154 at 169.
[12] Note 2 at s 83(1).
[13] Industrial
Relations (General) Regulation 2001 at c 6(1)(d).
[14] Note 13 at c 6(1)(a).
[15] Note 1 at s 170CE(1).
[16] Note 1 at s 170CE(1).
[17] Regulation 30BD(1).
[18] Note 1 at s 170CF(1).
[19] Note 1 at s 170CF(2).
[20] Chapman A, "Termination of Employment under the Workplace Relations Act 1996 (Cth)" (1997) 10 Australian Journal of Labour Law 89 at 110.
[21] Note 1 at s 170CR(1)(a).
[22] Note 20 at 105.
[23]
Creighton, W. B, “Labour law: an
introduction” 3rd ed, Sydney, NSW: Federation Press, 2000 at 315.
[24] Note 2 at s 85(1).
[25] Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia (1999) 203 LSJS 492.
[26] Note 20 at 94.
[27] Note 1 at s 170CG(3)(a).
[28] Note 1 at s 170CH(3)(b).
[29] Note 1 at s 170CG(3)(c).
[30] Note 1 at s 170CG(3)(d).
[31] Note 1 at s 170CG(3)(da).
[32] Note 1 at s 170CG(3)(db).
[33] ACTU, "Putting Fairness First: ACTU Submission to the Senate Economics References Committee – Workplace Relations and Other Legislation Amendment Bill 1996", D No 42/1996 para 119.
[34] Pergaminos v Thian Pty Ltd t/as Glenhuntly Terrace Print 920123, 16 July 2002.
[35] Note 34 at 10.
[36] Note 2 at s 88(a).
[37] Note 2 at s 88(b).
[38] Note 2 at s 88(a).
[39] s 88 specifies the Commission may if appropriate take into account of the factors.
[40] Note 1 at s 170CH(3) and s 170CH(6).
[41] Note 1 at s 170CH(6).
[42] Cases
show these factors include: the existence of trust and confidence: Bostik
(Australia) Pty Ltd v Gorgevski (No 1) (1992) 41 LR 452; impact of
non-reinstatement on the employee: Australian Meat Holdings v McLaughlan (1998)
84 IR 1.
[43] Note 1 at s 170CH(2)(a).
[44] Note 9 at 8.
[45] Note 23 at 328.
[46] Note 1
at s 170CH(8) and s 170CH(9)
[47] Although it is discretionary. Under s 170CH(4)(b), the AIRC may order an amount for remuneration lost.
[48] Note 23 at 329.
[49] Note 23 at 329.
[50] Meggiorin H, "Reinstatement under the Workplace Relations Act (Cth): Is it practicable, appropriate or just plain speculative?" (1999) 27 Australian Business Law Review 438 at 453.
[51] Note 50 at 456.
[52] Although the WRA (Cth) does not explicitly mention reemployment, s 170CH(3)(b) shows that reemployment is falls within the concept of reinstatement.
[53] Note 2
at s 89(1).
[54] Donaldson v NSW National parks and Wildlife Service (1997) 74 IR 26.
[55] Australian Meat Holdings v McLaughlan (1998) 84 IR 1.
[56] Hollingsworth
v Commissioner of Police (1999) 88 IR 282.
[57] Nicholson v Heaven & Earth Gallery Pty Ltd (1994) 57 IR 50.
[58] Note 57 at 61.
[59] Note 20 at 96.
[60] Note 1 at s 170CK(3)(b)(i).
[61] Note 20 at 98.
[62] Note 1 at s 170CR(1)(a).