The Fair Work Act 2009 has made it easier than ever before employees to lodge ‘unfair dismissal’ claims against their former employers. In recent years, the number of cases has increased from around 5,000 a year to more than 20,000.
In this article we take a look at what your clients can do to protect their business, if a claim is lodged against them.
The Unfair Dismissal Process
Many employers have absolutely no idea how an unfair dismissal claim will be dealt with once it has been lodged by a former employer. The key steps in this process are as follows:
- The employer is notified by letter from the Fair Work Commission. The letter will contain a copy of the employee’s application (called a Form F2), and will ask the employer to provide a response to the claim on an enclosed ‘Form F3’. The letter may also contain details of a ‘conciliation conference’ which the employer will usually be asked to attend via telephone.
- The employer lodges their Form F3 within 7 days of receiving the claim.
- The parties attend a phone-based ‘conciliation’ in an effort to ‘settle’ the claim. Around 80% of claims are settled during the conciliation because the employer agrees to pay ‘go-away’ money.
- If the claim isn’t settled at conciliation, it will be listed for full arbitration before a Commissioner.
The first thing your client should do if they are notified of a claim is determine whether the employee was protected from ‘unfair dismissal’ and accordingly entitled to lodge the claim in the first place.
Not all employees are protected from unfair dismissal and, incredibly, all applications are listed for conciliation without the employee’s eligibility being verified by anyone at the Commission. It’s up to your client to legally object if the employee is not eligible to bring the claim.
Was the Dismissal Unfair?
If the employee is legally eligible to proceed with their claim, your client should then consider whether the dismissal was, in fact, unfair for the purposes of the current laws. Remember, this analysis has nothing to do with whether the dismissal was ‘justified’ or ‘morally right’. What matters is whether or not the dismissal breached the Fair Work Act.
If the dismissal is likely to ‘unfair’ for Fair Work purposes, your client should consider settling the claim as early as possible.
Lodging a Robust Response
If your client stands by the dismissal, they should prepare as robust a response on their Form F3 as possible. This form must be ‘served’ on the employee, so it will be your client’s first opportunity to challenge the employee’s version of events. The stronger the response, the more likely it will be for things to go your client’s way.
Similarly, putting in a strong appearance at the conciliation conference is absolutely essential. We usually recommend employers appoint a specialist to speak on their behalf. Not only does this ensure the conference stays on track, it also lets the ex-employee know their former employer takes the claim seriously and will be putting up a fight.
Too many employers try to go it alone and hope for the best when it comes to responding to claims. They often end up paying out more than they should, or making a bad situation much worse by fumbling their Form F3 response or the conciliation itself.
Make sure your clients know their rights, obtain expert advice, and protect their business and reputation.
David Bates, MD, Workforce Guardian. Ph 1300 659 563
FREE HR HEALTH CHECK FOR KEY ADVISORS
Under section 550 of the Fair Work Act 2009, key business advisors such as accountants and bookkeepers can be held personally liable as an ‘accessory’ for their clients’ breaches of Australian employment law. Workforce Guardian’s FREE Fair Work Liability Check will confirm whether you’re exposed to potential penalties of up to $54,000 for each of your own and your clients’ breaches of Australian employment law. If you answer no/unsure to any of these questions, you should take urgent action to reduce your risk of accessorial and personal liability.