Unfair Dismissal Claim Eligibility Criteria
Unfair Dismissal Claim Eligibility Criteria
Kerri Fredericks

10 August 2019

Kerri is a Principal Lawyer in Anderson Fredericks Turner. She regularly assists employees and employers with employment law issues, including for unfair dismissal claims. Having previously worked as a Senior Crown Prosecutor, Kerri is an accomplished court advocate and skilled communicator.

Unfair Dismissal Claim Eligibility Criteria

Unfair Dismissal Claim Eligibility Criteria

If you are contemplating making an unfair dismissal application, or are an employer who has received one, a basic question to ask is “Who is eligible to make an unfair dismissal claim?”. Learning whether you are eligible or ineligible to make an application can allow people to focus on more appropriate claims that are relevant to their situation.

Today I am going to address who is eligible to make an unfair dismissal claim through the Fair Work Commission. I need to add a word of caution that any information I outline should not be interpreted as legal advice or even used as a substitute for legal advice.  If you are unsure about your eligibility to make an unfair dismissal application and you seek professional legal advice, our firm offers a free case assessment on whether we can assist you in your matter.

One Dismissal – Many Potential Legal Claims

It is essential for people to understand that dismissal action by an employer can lead to a range of different types of legal claims and action. There may be a breach of contract claim, or a breach of some protected right or entitlement. A person may have been discriminated against in the workplace, or adversely treated contrary to a workplace protection the law gives them. In such cases, it may not even be in the best interests to pursue an unfair dismissal claim. Some claims are mutually exclusive, meaning if you make one you cannot make the other.

It is for this reason we often sit down with our clients and work out what is the best claims for them. For any person dismissed from the workplace in circumstances they consider harsh, unjust or unreasonable, it can often make sense to begin by thinking about an unfair dismissal claim due to the simplified processes involved.

Who is eligible to make an unfair dismissal claim?

In Australia, the Fair Work Act 2009 (Cth) provides that a person is protected from unfair dismissal if they are an employee who has completed the minimum period of employment, employed under a modern award or enterprise agreement and earns less than the high-income threshold ($148,700 AU).

To replicate the precise language of the Fair Work Act, a person is eligible to make an unfair dismissal claim where:

  1. the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
  2. one or more of the following apply:
    • a modern award covers the person;
    • an enterprise agreement applies to the person in relation to the employment;
    • the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high-income threshold.

In knowing whether you are a ‘protected person’ from unfair dismissal in the eyes of the Fair Work Act, I will break these down further through a series of questions that may clarify these issues a little more clearly.

Related: Employment Law: Disciplinary ActionRelated: Employment Law: Disciplinary Action

Are all employees protected from unfair dismissal?

To be protected from unfair dismissal under the Fair Work Act, the employee must be one who is working for an employer that is defined as a ‘national system employer’.  What this means is that you need to be working for an employer who is a recognised company or private business whose purpose is for financial activity or trade nationally or abroad.  However, it will generally not include volunteers, a person on a vocational placement, sole traders or partnership arrangements. Public sector workers (i.e. public servants) are also not necessarily going to fall within this framework due to the operation of other laws.

I should point out that the above definition serves as a basic starting point.  There are further complications that may arise due to differing State or territory laws that may have exclude certain employers as being a ‘national system employer’. So while experienced employment lawyers generally find the answer to this question relatively straightforward, there are certainly occasions where unexpected exclusions apply that can make people ineligible to make an unfair dismissal claim.

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What does ‘minimum employment period’ mean?

For a person to be eligible to make an application for unfair dismissal in the Fair Work Commission, an applicant must have worked for 12 months or more for a small business, or 6 months or more in the case of a business that is not a small business.

How you are employed during your period of employment is also an important issue to be aware of particularly in situations where you are employed as a casual employee or perhaps you are in a situation where your previous employer has sold the business to another employer.  While the law strictly states that you must show that that there has been continuous service of employment, there are other complications that are seen that can affect whether a person has served the ‘minimum employment period’.

To illustrate some of the complications that can arise, it will assist to deal with some of the frequently asked questions we seen in this area:

Casual employees are protected from unfair dismissal under the Fair Work Act. They are also not subject to any different minimum employment periods. It is common for disputes to centre around whether a ‘casual’ employee was firstly employed on a regular and systematic basis and secondly that they had a reasonable expectation of continuing employment on a regular and systematic basis.

There is a need for employers and employees to understand the nature of the employment relationship and to ensure that employers work within the legal framework set by state and national laws.

If a person is employed on a casual basis prior to being made a permanent employee, it is still possible for all the service to count towards the ‘minimum employment period’.

The situation was clarified in a recent decision of the Fair Work Commission ([2019] FWC 3481). In that case, an issue to be determined was whether the calculation of time could be extended to include a two-month period of casual employment prior to 10-month period of permanent employment.  Given the respondent was a small business employer, it was necessary for the applicant to show they had worked a period of no less than 12 months prior to the dismissal.  When determining whether casual employment counts towards the minimum employment period, the Commission stated that:

“The starting point is that a period of employment is also referred to as a period of continuous service…” and that

“a period of continuous service can be made up of a series of periods of service… with an employer that may count words a single period of employment with that employer”.

The Fair Work Commission ruled that while the two-month period was seen as a ‘probationary period’, the hours worked each week was systematic and regular and, on that basis, it could be seen as a period of continuous service.

It should be noted that in this decision, while the Commission heard that there were no excluded periods of service, it is a relevant consideration for the Commission, which brings me to my next question.

The Fair Work Act is makes clear that the minimum employment period does not include any period of unauthorised absence, some forms of unpaid leave or unpaid authorised absences, as well as other periods prescribed under the law.

Issues of this kind are often raised in cases where an employee has suffered an injury, whether in the workplace or otherwise. An example is a decision of the Full Bench of the Fair Work Commission ([2012] FWAFB 3206), in which it was determined that an employee who was receiving benefits from a workers’ compensation scheme could have that time on leave counted as ‘the payments were made pursuant to a legal obligation’

Employees of national system employers may have their period of employment of service with one employer transfer to their next employer if there is a change of ownership in a business. This means that the employment may be seen as ‘continuous service’.  However, the standard exemptions will carry over to the next employer, meaning, any ‘unauthorised absences’ or ‘unpaid leave’ will not be counted toward the period of employment with the new employer.

There are situations that can arise in the transfer of business ownership that means there is a disruption to the continuation of service, or a change in the employment relationship. Issues of this kind are often highly specific to the individual circumstances.

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Modern Awards & Enterprise Agreements

The Fair Work Act states that if you are employed under a modern award or enterprise bargaining agreement, then you meet that eligibility test for making an unfair dismissal claim. That is, if you fall into this category, then you can make an unfair dismissal claim provided you have completed the minimum employment period.

Should your employment not be covered by either an award nor an enterprise agreement, then you will be required to meet the ‘high-income threshold’ test.

What is the ‘High-Income Threshold Test’ for Unfair Dismissal?

Your yearly earnings may impact on your eligibility to a make an unfair dismissal application to the Fair Work Commission.  It reviews the high-income threshold annually and publishes the new threshold at the commencement of the new financial year. As at 1 July 2019, the high-income threshold is $148,700.

In calculating which high-income threshold will apply, it is generally necessary to apply the relevant high-income threshold at the time the dismissal took effect.

A critical requirement is understanding what does and does not count towards an employee’s earnings.  The Fair Work Act states that earnings for the high-income threshold include:

  1. the employee’s wages; and
  2. amounts applied or dealt with in any way on the employee’s behalf or as the employee directs; and
  3. the agreed money value of non-monetary benefits; and
  4. amounts or benefits prescribed by the regulations.

Of the above indicia, the category of ‘agreed money value of non-monetary benefits’ can be far from easy to determine. An example of a non-monetary benefit is the payment of health insurance, which can be construed as meeting this requirements and as such contributes to the overall total earnings of the employee ([2018] FWC 1520).

A car allowance, if exercised, by the employee may also contribute to the overall total earnings of the employee.  However, in the event that an employment package which includes the use of a company car, any private usage of the company vehicle must be construed as forming part of the wages of the employee ([2018] FWCFB 1767).

What if I am ineligible to make an unfair dismissal application?

If a person is ineligible to make an unfair dismissal application under the Fair Work Act, there may be other actions that can be taken if an employer has acted wrongly in dismissing an employee.

One example is public sector employees, such as state or local government employees, may be eligible to make an unfair dismissal claim under a state-based industrial relations commission. For example, in Queensland, public servants may make an unfair dismissal application in the Queensland Industrial Relations Commission.

Other types of actions can include claims involving: –

  • breaches of contract claims;
  • misleading and deceptive conduct claims;
  • adverse action claims to the Fair Work Commission;
  • discrimination claims to a Human Rights Commission; and,
  • workers’ compensation claims relating to unreasonable management act.

One of the benefits of the unfair dismissal laws in Australia is the simplified nature of the process and capacity to quickly settle unfair dismissal applications. It is the reason many employees seek to make an unfair dismissal application when they feel the situation is harsh, unjust or unreasonable. Seeking legal advice about what is the right type of claim can be important if people feel they may ‘miss out’ on entitlements, or worry they are pursuing a weaker or less advantageous type of clam.

Summary

While I’ve set out to provide an overview about the unfair dismissal eligibility criteria that applies under the Fair Work Act, it is really nothing more than an overview. Many cases throw up specific issues that require careful consideration and sometimes arguments to be made as to why the eligibility criteria has been met.

Eligibility for an unfair dismissal claim is multi-factorial. Whether you are employed on a permanent, part-time or casual basis, knowing what protections can be afforded to you under the Fair Work Act for a potential unfair dismissal claim is a necessity.

If you want specific advice or representation for your own situation, feel free to contact me or another solicitor in our firm for that purpose. Our free case assessment is designed to help people decide whether it is right for them to engage a lawyer for their case with no cost and no obligation attached.

I just want to end by thanking my colleague, Karen Wilson, for her assistance in researching and preparing this information. It is work that allows our firm to make this kind of information more freely accessible for people interested in the subject matter.

More Information

The information contained on this page is general in nature and specific advice ought to be obtained from a lawyer before acting on any general information with respect to any legal matter.

Anderson Fredericks Turner has lawyers across Queensland who can provide specific advice with respect to issues involving employment law, including for issues relating to unfair dismissal. Our unfair dismissal lawyers operate from local offices across Queensland:

Our employment lawyers have the capacity to advise and represent people nationally, particularly for unfair dismissal claims.

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Kerri is a Principal Lawyer in Anderson Fredericks Turner. She regularly assists employees and employers with employment law issues, including for unfair dismissal claims. Having previously worked as a Senior Crown Prosecutor, Kerri is an accomplished court advocate and skilled communicator.

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