Unfair Dismissal Claim Outcomes - Anderson Legal

Unfair Dismissal Claim Outcomes in the Fair Work Commission (FWC)

Get informed about success rates and outcomes

Unfair Dismissal Claims

Employment Law

Anderson Legal assists employers, executives and employees in dealing with unfair dismissal applications.

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Unfair Dismissal: Success Rates & Outcomes

Business owners and employees seek to understand the general success rates and outcomes of unfair dismissal claims. While this can give people a general idea of the possible outcomes, all cases differ.

As with any legal issue, there is no substitute for getting professional legal advice as early as possible. Understandably, before engaging a lawyer, many people want to get better informed about their issues.

The following are some of the frequently asked questions relating to the success rates and outcomes for unfair dismissal claims before the Fair Work Commission:

  1. What are the possible outcomes?
  2. What is the success rate of unfair dismissal claims?
  3. What is the compensation limit for unfair dismissal?
  4. What is the average payment for unfair dismissal?
  5. How long do unfair dismissal claims take to finalise?
  6. What are the costs of an unfair dismissal claim?
  7. What are the alternatives to unfair dismissal claims?

1. What are the possible outcomes?

If an unfair dismissal claim is successful, the Fair Work Commission may order a person’s reinstatement or the payment of compensation. The decision as to whether reinstatement or compensation is awarded is a discretionary decision based on what the Commission considers to be a just outcome. There is no right to reinstatement or compensation.

The Fair Work Commission has a range of powers to secure just outcomes for successful unfair dismissal applications, including the ability to order:

  • Reinstatement into the same position;
  • Reinstatement into a similar position on no less favourable terms than previously performed by the employee;
  • Continuity of employment, to ensure benefits accrued through service are restored;
  • Compensation for lost pay, in addition to reinstatement;
  • Compensation for losses reasonably attributable to the unfair dismissal; and,
  • No remedy (i.e., no reinstatement or compensation) even if the employee was unfairly dismissed.

If an unfair dismissal claim is unsuccessful, it will be refused and no reinstatement or compensation will be awarded.

For anybody contemplating or litigating an unfair dismissal application, it is crucial to understand how the Fair Work Commission decides what an appropriate outcome is. Experienced employment lawyers can assist applicants and respondents in understanding the evidence relevant to the discretionary decisions of the Fair Work Commission.

2. What is the success rate of unfair dismissal claims?

The 2018-2019 Fair Work Commission Annual Report showed approximately 78% of unfair dismissal claims settle at conciliation. Less than 1% of all unfair dismissal claim conciliation outcomes resulted in reinstatement. About 63% resolved through some compensation agreement, while 14% involved only a non-monetary settlement.

Unfair Dismissal - Conciliation Outcomes

The settlement figures in the 2018-2019 Fair Work Commission Annual Report provide insight into how unfair dismissal claims resolve. While a considerable percentage (about 22%) do not settle at conciliation, many do on terms involving monetary compensation.

3. What is the compensation limit for unfair dismissal?

If compensation is payable, it is capped at the lesser of six months of the employee’s pay or half of the high-income threshold, which is $162,000 as of 1 July 2022. The maximum compensation for an unfair dismissal claim is $81,000, but it may be less based on the applicant’s income.

Given that the vast majority of cases do not result in reinstatement, compensation limits are an important consideration for individuals who feel they have been unfairly dismissed and businesses facing unfair dismissal claims.

4. What is the average payment for unfair dismissal?

The maximum compensation for an unfair dismissal claim in Australia is $81,000 as of 1 July 2022. Based on data from the Fair Work Commission, the average compensation payment is less than $10,000. How much compensation a person receives depends on various factors that are personal to each case.

A breakdown of monetary payments from settlements at conciliations in the Fair Work Commission shows the wide variety of payments that may be agreed upon:

Monetary Payment Outcomes from Unfair Dismissal Conciliations

The Fair Work Act 2009 (Cth) requires the Fair Work Commission to take into account all of the circumstances of the case, including:

  • the effect of the order on the viability of the employer’s enterprise; and
  • the length of the person’s service with the employer; and
  • the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
  • the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
  • the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
  • the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
  • any other matter that the Fair Work Commission considers relevant

If the Fair Work Commission is satisfied that misconduct by the applicant contributed to the decision to dismiss them, the amount of compensation awarded must be reduced by an appropriate amount on account of the misconduct. The Fair Work Commission does not pay compensation for shock, distress, or humiliation caused as a result of the dismissal.

5. How long do unfair dismissal claims take to finalise?

Applicants must file their unfair dismissal claim with the Fair Work Commission within 21 days. The employer must respond within seven days. The Fair Work Commission usually sets a time and date for a conciliation within a matter of weeks, which brings the applicant and respondent together to help the parties to try and reach a settlement. If the case is not settled before or at conciliation, formal hearings are heard to determine any jurisdictional objections and the overall merits of the application, which can involve evidence and submissions.

Even though the Fair Work Commission seeks to streamline its processes to ensure quick resolutions to unfair dismissal claims, fully contested processes can take months to resolve.

6. What are the costs of an unfair dismissal claim?

In an unfair dismissal claim before the Fair Work Commission, applicants or respondents generally pay their own legal costs. However, a party or their representative may be ordered to pay the expenses of others if the matter was commenced or responded to vexatiously, without reasonable cause, or with no reasonable prospect of success.

A party may also be ordered to pay the costs of others if costs were incurred as a result of their unreasonable conduct.

If a litigant’s argument fails, it does not necessarily mean that a court or tribunal will find that the application was commenced or defended in a vexatious manner or without reasonable cause. A finding that there were ‘no prospects or success’ is made on an objective basis, based on a reasonable person’s view (rather than from the litigant’s subjective belief).

Given the possibility for costs to be awarded for or against litigants in an unfair dismissal claim, it is prudent for people considering commencing or defending such claims to get advice from an experienced employment lawyer.

7. What are the alternatives to unfair dismissal claims?

Some people will find they are ineligible to make an unfair dismissal claim and wish to explore what alternatives there may be to secure a just outcome. Alternatives to unfair dismissal claims include:

  • General protection claims
  • Discrimination claims
  • Breach of contract claims
  • Unlawful termination claims

Each type of claim has its own rules and procedures. Different time limitation periods apply to every kind of claim.

The decision to bring one type of claim can impact whether other types of claims can be litigated in the future. Selecting the correct type of claim for the issues can be critical to securing a just result. Given the importance of such decisions, anybody dealing with a dismissal issue that seems harsh, unjust or unreasonable ought to get early advice from an experienced employment lawyer.

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