Employment Law Case Study: Unlawful Dismissal

Terminating employees during their probation period can still result in damages if the general protections provisions of the Fair Work Act are breached

Terminating employees who are not suitable for the business during the probationary period is a sensible thing to do, however, employees may still be able to claim that their employer breached the general protections provision under the Act by taking adverse action (e.g. dismissing the employee) because the employee exercised a workplace right or engaged in any other protected conduct under the Act.

Accordingly, if you are considering terminating an employee, we strongly recommend that you seek professional advice first. It may not be as simple as you think!

The problem

The employer in the manufacturing industry terminated an employee for poor performance during the employee’s probation period. Some examples of the employee’s poor performance included the employee not following the notice and evidence processes set out in the Fair Work Act 2009 (“the Act”) about taking leave and performing substandard work resulting in costly mistakes for the employer. The employee was simply not the right fit for the job or the employer’s business.

On this basis, the employer made the decision to dismiss the employee. The employer contacted the employee by telephone of his dismissal as he was absent from work on unpaid personal leave at the time. On the telephone, the employee was advised that due to performance issues, the employer had decided not to continue his employment beyond his probationary period and that as a result his employment was terminated. The employee was paid 1 weeks’ notice in lieu along with outstanding leave balances in accordance with the National Employment Standards and the Vehicle Manufacturing, Repair, Services and Retail Award 2010.

The employee then made a general protections claim in the Fair Work Commission claiming that he was dismissed because he was temporarily absent from work. The employee sought compensation from the employer for his dismissal. We were engaged at this point to respond to the claim and represent the employer in the Fair Work Commission.

How we helped

Under the Act, an employer must not dismiss an employee because the employee is temporarily absent from work because of an illness or injury of a kind prescribed by Regulation 3.01 of the Fair Work Regulations 2009. Doing so may be viewed as taking adverse action against an employee for a protected right which is prohibited under the Act. The employee relied on this section of the Act in his claim.

We were instructed that, whilst the employee was dismissed while on temporary leave, his absence was not the reason for the dismissal.

In the response to the application and in the subsequent conciliation, we reiterated the employer’s position in relation to the reason for the employee’s dismissal. We further argued that the employee’s illness or injury was not a prescribed kind of illness or injury under the Regulations as the employee:

  • did not provide a medical certificate for the illness or injury or a statutory declaration about the illness or injury; and
  • was required by the terms of his employment agreement and/or the Vehicle Manufacturing, Repair, Services and Retail Award 2010 and the Act to notify the employer of an absence from work and to substantiate the reason for the absence which the employee failed to do; and
  • the leave taken was unpaid personal leave as the employee failed to comply with the notice and evidence requirements set out the Act.

In the end, this matter settled at conciliation. No compensation was offered by the employer, however, in order to try and resolve the matter, we advised the employer to consider offering non-monetary benefits including agreeing to view the termination as a resignation to assist the employee with future employment and providing the employee with a statement of service. The employer agreed with this and this was accepted by the applicant and the matter was resolved at conciliation.

The hindsight

Terminating employees who are not suitable for the business during the probationary period is a sensible thing to do. This is because employees who are terminated outside what is defined under the Act as the ‘minimum period of employment’, being 12 months or 6 months depending on the size of the business, may claim unfair dismissal. If an employee is terminated within the minimum period of employment, they are unable to make an unfair dismissal claim.

However, employees may still be able to claim that their employer breached the general protections provision under the Act by taking adverse action (e.g. dismissing the employee) because the employee exercised a workplace right or engaged in any other protected conduct under the Act. Eligibility to make a General Protections Claim, unlike unfair dismissal, is not based on the employee’s length of service with the employer.

Accordingly, if you are considering terminating an employee, we strongly recommend that you seek professional advice first. It may not be as simple as you think!

Rachel Derrico, Senior Associate, Rankin & Co.

The content of this article is intended for general interest purposes only and does not constitute legal advice. Contact the commercial lawyers at Rankin & Co. for specialised advice.

2018-02-12T06:39:05+00:00February 12th, 2018|Business Advice, Compliance, employees, Employment Law|99 Comments