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Unfair dismissal thresholds set to increase

Unfair dismissal thresholds set to increase

The eligibility threshold for unfair dismissal claims, as well as the maximum limit on the value of compensation orders, is set to be increased from 1 July.

The eligibility threshold for unfair dismissal claims, as well as the maximum limit on the value of compensation orders, is set to be increased from 1 July.

Adjusted each year for inflation, the high income threshold (the maximum earnings at which a former employee is eligible to lodge an unfair dismissal claim) will rise from the current $142,000 to $145,400.

Similarly, the compensation limit to which the Fair Work Commission is bound will also increase.

However, as My Business has previously noted, this limit is much less than many employers realise. Even with its annual increase, compensation payouts are restricted to a maximum of $72,700 — a far cry from the huge sums many employers envisage such claims can involve.

In April this year, the Fair Work Commission launched a guidebook on unfair dismissal which it claimed “contains plain English summaries” and provides an overview of “the key principles of unfair dismissal case law”.

Yet readers were quick to express their dismay that the guidebook did little to unravel the mysteries and complexities surrounding unfair dismissal rules and past rulings.

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“I got excited when I saw this. At last, an easy to read guidebook to help SMEs navigate the area of Unfair Dismissal. Unfortunately, I was disappointed,” said Clare Long of Norgay HR Consulting.

“It would be wonderful if FWC issued a ‘plain-speak’ guidebook for this sector. From my reading of it, and my experience with business owners in this sector, they’ll still need help to clarify.”

Another reader added: “I was also disappointed in the guidebook — each chapter is a stand-alone page so you can’t download the whole book, and every page has their little ‘was this helpful’ blurb. Could have been so much better...”

Unfair dismissal is a chronic issue for business leaders, with the Fair Work Commission revealing it received almost 39 applicants every single day in 2017.

“Sadly, it’s really easy to take an unfair dismissal action … sadly from an employer’s point of view,” Mark Gardiner of Teddington Legal previously told My Business.

“The Fair Work Commission will accept an application without assessing it initially, so the process starts, someone can get online, fill out a form, pay about $67 in filing fees to the Fair Work Commission, and the first thing an employer knows about it is that they get a notice from the Fair Work Commission saying you’ve got seven days to respond to this notice.”

Mr Gardiner suggested there are several ways an employer can respond to such a notice, but that ultimately prevention is better than cure.

Unfair dismissal thresholds set to increase
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