February 11, 2015
Sadly, we were inundated with cases involving unfair dismissal and other contraventions involving dismissal over the lead up to, and the few weeks following, the Christmas break. Perhaps surprisingly, in our experience, this period is by far when the bulk of such dismissals occur.
What strikes us most about these matters, apart from the obvious, is always the particularly bad time of year for the employee. In a purely economic sense from the perspective of the employer, this is somewhat understandable, in that they will seek to minimise liabilities by using the Christmas period to pay out annual leave and any applicable notice period. However, for the employee, almost nothing can overcome the shock, disappointment and other emotions felt with the festive season approaching and all the expenses that come with it, let alone the prospect of having to search for another job come the new year.
The other thing that still disturbs us is the often-bullish nature in which the employer approaches the situation. For example, some may give the employee no prior warning or chance to make amends, while others simply lie about the reason for the dismissal. In some cases, the employer will dangle an employee’s existing entitlements in front of them as an incentive to enter into an agreement (written or oral) about final payouts and terms of severance, often with releases from further claims in the employer’s favour.
The effect of the combination of those two elements is very unfortunate. In most matters we have dealt with, the employer will move swiftly, during the period where the employee’s shock is still fresh and when they are in desperate need of urgent money. More often that not, the employee loses focus, and is otherwise unprepared and put on the spot, like a deer in headlights. The employee generally then does one of three things: a) immediately accepts the employer’s offer; b) rejects the offer and rushes off making their own application to the Fair Work Commission or elsewhere; or c) puts the whole thing off until they are emotionally ready to revisit the issue, which is generally over a month later after the holiday season has ended. Each of these approaches potentially carry their own downfalls, so we thought we would provide some pointers to assist if you get stuck.
1. Entitlements such as annual leave, pay in lieu of notice, superannuation, and incentives (including commission) are generally protected in employment agreements and otherwise in statutes. The agreement and the statutory provisions generally also set out when they should be paid, andthere are potentially severe regulatory penalties for employers who breach those obligations. Therefore, in general terms, employers are not in a position to bargain with you over these rights.
2. As with any contractual relationship, you do not have to sign something unless you understand and agree to it. There is nothing to compel an employee to sign a document relating to dismissal or their entitlements at any point in time, whether as a condition of receiving those entitlements or otherwise. If you don’t understand something or don’t know your rights, hear what the employer has to say, then consider it and get some advice before acting.
3. Most applications for unfair dismissal or other contraventions involving dismissal must be made within 21 days of the date of dismissal. It is important to take some time to think and obtain advice, but you must be conscious of this, as it will be hard (if not impossible) to get around the limitation period in most cases, even considering Christmas holidays.
4. In most cases, a person will only be protected from unfair dismissal if permanently employed, usually on a full-time basis. However, in some cases, temporary or part-time employees, including those on fixed term contracts, might be covered, especially if the NSW State system applies to them (most people fall under the Federal system if employed by private companies).
5. If you are on a fixed term contract that has expired and has not been renewed, there may be nothing you can do, depending on your circumstances. While it is arguable that, in substance, fixed term or casual or temporary employees, for example, often become permanent full-time employees over time when certain conditions were met, certain things will exclude employees from this argument, and therefore from protection. These include continuing to sign fixed term contracts and doing nothing further to formalise improved conditions over time, especially when they knew and understood the nature and risks involved with the more limited form of employment at the time it was first taken.
6. In the case of instant or summary dismissal, the employee must have done something sufficiently serious to warrant their immediate removal from the workplace. Generally, this could involve threatening or actually impacting upon the health and safety of others, a deliberate threat to the business for which they work (competitively or otherwise), immoral conduct that brings the employer into disrepute or some act or omission that completely breaks down relations. The employer needs to be able to prove that such acts or omissions actually occurred, as opposed to acting on rumours or suspicions.
7. If an employee is protected from unfair dismissal, and the dismissal was harsh, unjust or unreasonable, the employer may be liable for up to 6 months’ “ordinary pay” (including incentives and bonuses), depending on their personal circumstances of the employee. Exactly what is harsh, unjust or unreasonable is determined on the circumstances of each case. However, it is useful to note that a dismissal may still qualify even if there was a valid reason for it. Generally, except in the case of serious misconduct capable of instant or summary dismissal or a genuine redundancy, an employee should be made aware of the reason, given a proper opportunity to respond and given due procedural fairness regarding the consideration of that response and any workable solutions.
8. In the case of a genuine redundancy or successful jurisdictional objection (i.e. the employee is out of time or does not meet the criteria for protection), an employee will not be in a position to claim for unfair dismissal. However, there may be other avenues available to the employee, and it pays to look a little further. For example, consider an employer who cites redundancy as the reason for dismissal, but the employer deliberately and systematically restructured its business, for example by hiring new employees with slightly different job descriptions and shifting delegated tasks prior to the dismissal. Assume the dismissed employee had been arguing with the employer about outstanding bonus payments prior to the employer’s initiatives. In this case, it would be open to the employer to make a general protections claim seeking the outstanding commissions and a remedy for the circumstances surrounding dismissal, which could result in an additional payout similar to that for a successful unfair dismissal case.
9. When it comes to determining pay disputes, lost, incomplete or inaccurate records should not allow the employer to reduce the amounts owing to employees, for example where they are required to calculate outstanding commissions or bonuses. Corporate employers have obligations to maintain books and records and transaction information under the Corporations Act 2001 (Cth), and all employees are obliged to maintain specific records relating to each employee.
10. There are a range of other specific things employees can’t be terminated for. These include temporary absences for certain illnesses or injuries; absence during maternity or other parental leave; status as a member or non-member of a trade union; seeking to act, or actually acting as, a representative of employees; filing a complaint or participating in proceedings against the employer; or on discriminatory grounds, including race, religion, political or sexual preference, sex, age, disability, nationality or pregnancy and so forth.
Hopefully this helps with negotiations if you find yourself in such an unfortunate situation. However, this is not an exhaustive, one-size-fits-all manual, and claims can be difficult to run. Feel free to contact us at any time.