How to avoid a claim for wrongful dismissal

Any security guard is expected to get into a tussle now and then. But a guard in a mental health ward who was fired after responding to a patient’s verbal and physical taunts had his job reinstated after the Fair Work Commission (FWC) found his actions were “appropriate, reasonable and proportionate”.

In its ruling, the FWC found “the dismissal was harsh” and did not have regard to the worker’s unblemished record over nearly eight years.

“Even if the reason for the dismissal was regarded as valid, the dismissal was disproportionate to what [the worker] did,” the ruling said.

If a worker feels a dismissal is unfair, it’s very easy to launch a claim with the FWC. And while employers will try to design dismissals that cannot be interpreted by the commission as either harsh, unjust or unreasonable, “the trouble is, there will be no clear answer to the question about what disciplinary action is ever appropriate,” said Adam Lambert, KHQ Lawyers special counsel for workplace relations.

Dismissal and the trail to litigation

The FWC must consider a range of factors when determining a case such as the one involving the security guard. Primarily, is there a valid reason for the dismissal and was the employee notified of that reason and given an opportunity to respond?

“Most employers get those two elements right – they can prove someone’s done something that is not consistent with their policies, their expectations and the standards they require from employees,” Lambert said.

The next consideration – whether the dismissal was harsh in the circumstances – is more open to interpretation.

“That depends on anything that’s relevant, including the employee’s personal circumstances, the impact a dismissal will have on them, their length of service, the nature of their industry and how easy it is to find alternative employment,” he said. “All of that goes into the assessment of whether a particular decision to dismiss is fair or unfair.”

Settlement process in unfair dismissal cases

Lambert said his typical advice to employers is that any decision should be based on their workplace culture, the standards they expect of employees and the types of outcomes they think are appropriate.

“If you become too concerned with what might happen if challenged in the Fair Work Commission, then ultimately you might make decisions not to dismiss, and that will create cultural issues at the workplace,” he said.

“At the other end of the spectrum, if you’re too quick to terminate, that creates a legal risk but also a different kind of cultural issue at the workplace.”

Some bosses never take risks, Lambert said.

“A lot of employers are very fearful of litigation,” he said, where each party bears their own costs and a former employee can represent themselves. Settlements within the first month of an application are common, Lambert said, “because the employer will pay an amount for it to go away.”

The decision to dismiss

Many employers will only dismiss when they are very confident it will be seen as fair, Lambert said, “or if the alternative – allowing that employee to continue at the workplace – is greater than the risk of the time, cost and inconvenience associated with defending a claim.”

Employers with an appetite for risk will take a different approach, he said, where the cost of a claim is seen as worth paying in order to set the standards they want with their workplace.

“Generally speaking, the bigger an employer is, the easier it is for them to take that more risky approach. But if you’re a small business, you can’t really afford to carry that risk,” he said.

To avoid facing the FWC, employers must follow simple rules when disciplining employees. If you’re not going to dismiss a worker, disciplinary action can take the form of a final written warning.

“That’s very common, but also it doesn’t do much,” Lambert said.

Disciplinary action and unfair dismissal

Another option is to redeploy an employee into a different role. “I would often encourage employers to explore that,” he said, unless there was a serious lack of trust.

“An alternative might be a trial period in a different team with greater supervision,” he said. “An employee will need to agree to that. But if you offer it and they decline, I think that feeds into the argument that the decision to dismiss is fair.”

Lambert is frank with clients, often telling them he can’t confidently give an answer of whether a dismissal would be fair or not. Even if he might believe the chance of an employer winning a case is high, he emphasizes the process is inescapable: an application is made, a response must be filed, followed by conciliation to try to negotiate a settlement.

If that doesn’t work, it’s time to prepare evidence and gather witnesses for cross-examination.

“I can say, ‘Yes, you’ve got a sound basis to dismiss, but we have to let the process play out, and that will have an impact on you,’” he said.