What happens if the Fair Work Commission finds that an employee has been unfairly dismissed?
The decision whether to grant a remedy where a dismissal is unfair remains at the discretion of the Fair Work Commission. There is no automatic right or obligation on the Fair Work Commission to award a remedy.
Alarmingly though, if a remedy is considered appropriate, the Fair Work Commission will first consider whether reinstatement is appropriate before considering any other remedy. This means the Fair Work Commission could order the dismissed employee be reinstated to their previous position. This is a practical nightmare for employers who are faced with the genuine possibility of having the terminated employee back in their old role and being back at square one (1) in relation to dealing with the terminated employee’s issues.
Compensation may also be considered if the Fair Work Commission is satisfied that the reinstatement of the employee is inappropriate. If compensation is awarded, the Fair Work Commission is to take all circumstances into account, including:
- the effect of the order on the viability of the employer’s enterprise,
- the length of the person’s service with the employer,
- the remuneration that the person would have received, or would have been likely to receive, if they had not been dismissed,
- the efforts of the person (if any) to mitigate the loss suffered because of the dismissal,
- 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,
- the amount of any income reasonably likely to be 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 Commission considers relevant.
The maximum compensation that can be ordered is the lower of half of the employee’s annual wage or $79,250.00.
If not handled adequately, unfair dismissal disputes have the real ability to become time consuming, costly and disruptive to employers and key managers.
Acting quickly and with confidence can lessen the risk of an unfair dismissal application being filed by a dismissed employee. In the contrary, poor termination practices result in unnecessary litigation against disgruntled ex-employees who are looking for retribution. The cost of this usually goes far beyond the direct cost of potential damages owed to the ex-employee.
Our Specialist Employment Law team has extensive experience in dealing with termination disputes in the Fair Work Commission.
Our goal is to work with employers to assist and compliment their human resources practices that results in Directors and key management not being involved in unnecessary Fair Work Commission proceedings.