Complaints of unfair or unlawful dismissal begin with lodging an application with the AIRC 21 days after the termination takes effect. There must be a termination at the initiative of the employer. 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. 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. 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. 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. 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. 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. 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.
Under the NSW provisions, there must be a "dismissal" at the initiative of the employer. 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, 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. 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; notification of the reason; opportunity to respond; warning of unsatisfactory conduct; degree of employer's undertaking, establishment, or service; and absence of human resources management. 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."
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, 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."
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. Similarly, the employee's opportunity to respond to the reason for termination is not limited to capacity or conduct or operational requirements. 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. 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. 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. 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. A broad range of factors are considered in determining appropriateness. 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."
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. 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. 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. There would not have been a similar cap for back pay ordered following reinstatement. 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. 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. 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. 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. 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) are the primary remedies. 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, the court equated practicability with possibility. This is in contrast to appropriateness, which the court in Australian Meat Holdings 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, the Full Bench approved the statement in Nicolson v Heaven & Earth 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. The terms inappropriate and impractical thus probably do not materially differ.
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. 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. 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.
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. 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.
ACTU, "Putting Fairness First: ACTU Submission 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 termination of contracts for specified periods of time" (2002) 15 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
Pittard M, "Unfair dismissal laws: the problem of application to small businesses", (2002) 15 Australian Journal of Labour Law 154
Wheelwright K, "Remedies for unfair dismissal under the Workplace Relations Act 1996- A fair go all round?" (2001) Vol 1 No 1 Macquarie Law Journal 137
 Thereafter referred to as the WRA (Cth).
 Thereafter referred to as the IRA (NSW).
 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.
 Note 1 at s 170CB(3)
 The exclusions have taken effect through Regulations 30B; 30BA; 30BB; 30BC.
 Parliamentary Debates, Senate, 16 May 2002 at 1723.
 Note 1 at s 170CC(1)(a) and s 170CC(1)(c).
 Bourke v Brown Gouge Rosebud (2000) 103 IR 22.
 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.
 Blackford R, "Unfair dismissal law and the termination of contracts for specified periods of time" (2002) 15 Australian Journal of Labour Law 167.
 Pittard M, "Unfair dismissal laws: the problem of application to small businesses", (2002) 15 Australian Journal of Labour Law 154 at 169.
 Note 2 at s 83(1).
 Industrial Relations (General) Regulation 2001 at c 6(1)(d).
 Note 13 at c 6(1)(a).
 Note 1 at s 170CE(1).
 Note 1 at s 170CE(1).
 Regulation 30BD(1).
 Note 1 at s 170CF(1).
 Note 1 at s 170CF(2).
 Chapman A, "Termination of Employment under the Workplace Relations Act 1996 (Cth)" (1997) 10 Australian Journal of Labour Law 89 at 110.
 Note 1 at s 170CR(1)(a).
 Note 20 at 105.
 Creighton, W. B, “Labour law: an introduction” 3rd ed, Sydney, NSW: Federation Press, 2000 at 315.
 Note 2 at s 85(1).
 Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia (1999) 203 LSJS 492.
 Note 20 at 94.
 Note 1 at s 170CG(3)(a).
 Note 1 at s 170CH(3)(b).
 Note 1 at s 170CG(3)(c).
 Note 1 at s 170CG(3)(d).
 Note 1 at s 170CG(3)(da).
 Note 1 at s 170CG(3)(db).
 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.
 Pergaminos v Thian Pty Ltd t/as Glenhuntly Terrace Print 920123, 16 July 2002.
 Note 34 at 10.
 Note 2 at s 88(a).
 Note 2 at s 88(b).
 Note 2 at s 88(a).
 s 88 specifies the Commission may if appropriate take into account of the factors.
 Note 1 at s 170CH(3) and s 170CH(6).
 Note 1 at s 170CH(6).
 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.
 Note 1 at s 170CH(2)(a).
 Note 9 at 8.
 Note 23 at 328.
 Note 1 at s 170CH(8) and s 170CH(9)
 Although it is discretionary. Under s 170CH(4)(b), the AIRC may order an amount for remuneration lost.
 Note 23 at 329.
 Note 23 at 329.
 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.
 Note 50 at 456.
 Although the WRA (Cth) does not explicitly mention reemployment, s 170CH(3)(b) shows that reemployment is falls within the concept of reinstatement.
 Note 2 at s 89(1).
 Donaldson v NSW National parks and Wildlife Service (1997) 74 IR 26.
 Australian Meat Holdings v McLaughlan (1998) 84 IR 1.
 Hollingsworth v Commissioner of Police (1999) 88 IR 282.
 Nicholson v Heaven & Earth Gallery Pty Ltd (1994) 57 IR 50.
 Note 57 at 61.
 Note 20 at 96.
 Note 1 at s 170CK(3)(b)(i).
 Note 20 at 98.
 Note 1 at s 170CR(1)(a).