You’re facing an unfair dismissal claim: now what?

It’s an issue many business owners fear – being faced with a claim of unfair dismissal. An SME specialist lawyer reveals how to respond in this instance.

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

“Because 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.”

How to respond to an unfair dismissal claim

According to Mark, businesses have a couple of ways to respond – assuming, of course, that the dismissal is actually legitimate and lawful.

“The employer’s response can be substantive in that it can respond to the allegation of the unfair dismissal and you need to respond and explain why the dismissal wasn’t unfair,” he says.

“Or it can be a procedural response and explain why the Fair Work Commission should not hear the application for unfair dismissal. And it’s important to deal with that at the outset.”

Come to the process prepared

The next step, says Mark, is that the Fair Work Commission will set a timetable for handling the matter, usually within a month of the employer’s response being received.

“The first step is a mediation where the Fair Work Commission appoints a registrar or commissioner to deal with what is mostly a telephone mediation to try to see if an agreement can be reached in relation to that,” he says.

However, Mark cautions that employers should come to this process knowing what they will and won’t settle for in resolving the claim.

“Quite often, that will be a mediator wanting an employer to pay the dismissed employee some money to make it go away. And sometimes that’s what employers have to do, sadly.”

The cost of dismissal

Whether the case gets to an unfair dismissal or not, Mark says businesses need to be aware that there is a cost associated with terminating any employee.

“I sometimes say that getting rid of an employee involves time or money, and it’s up to an employer which one they want to do,” he explains.

“They can effectively dismiss them and pay them additional money to go away, or they can take the time and work through an orderly system and process so that they can dismiss someone on fair grounds on the basis of poor performance or poor cultural fit or poor attitude.

“[The latter is] difficult to do in a short time frame, but can be done. And it doesn't need to be months. It can be weeks, depending on the nature of the improvement required. But you need to go through one of those two processes: time or money.”

However as HR consultant Clare Long has previously told My Business, employers have rights too and there are certain instances where SMEs are exempt from unfair dismissal laws.

Prevention is the best cure

As with most things in life, prevention is the best cure when it comes to unfair dismissal. And according to Mark, that comes down to hiring well and keeping documented evidence of performance management.

“I think the key is performance management and having documented performance management processes, so that if you get to a process where you decide an employee is not right for you, then you can work through management processes and manage a person out of the business,” he says.

Hear more insights on common legal problems in business, such as employment contracts, remote working and skilled visas on the My Business Podcast below:

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