In summary, the average payout for unfair dismissal in Australia is around $13,320, but this figure can vary widely depending on the individual circumstances and the Fair Work Commissions ruling in alignment with the Fair Work Act 2009.
Median compensation for unfair dismissal
') that we can order an employer to pay. The maximum we can order is the lower of these 2 amounts: half of the employee's annual wage OR. the compensation cap, which is $83,750 for 2023-24 and changes on 1 July each year.
Compensation for unfair dismissal is capped at 26 weeks' wage of the annual wage of the employee.
Generally, there are two outcomes for unfair dismissal claims: reinstatement or compensation.
Most decisions are issued within 12 weeks of the hearing.
If it is an unfair dismissal, you will have to provide remedies to the employee. There are mostly three remedies for this, reinstatement, re-employment, and compensation. At times, remedies could simply involve formal apologies as well.
An automatically unfair dismissal is a dismissal that is so inherently unfair that an employee is not required to prove two years' continuous service. This is because employees are afforded specific proection by law if dismissed in circumstances where the dismissal violates their basic employment rights.
The Balance of Probabilities standard requires you to prove that the dismissal was more likely to be unfair, than not. As such, the standard in proving such occurrence, is that there is a 51% or greater probability, that the dismissal was indeed unfair.
An automatically unfair dismissal must be referred to the Labour Court for adjudication and may lead to compensation of up to 24 months' remuneration.
This figure differs widely for many people depending on what the impact of an unjust termination has had on them. However, typically, this figure is around the $5,000 to $15,000 mark. This amount is not considered as income, and as such, no tax is payable on this payment.
To calculate total compensation for an employee, take the sum of their base salary and the dollar value of all additional benefits. Additional benefits include insurance benefits, commissions and bonuses, time-off benefits, and perks.
Unfair dismissal is when an employee is dismissed from their job in a harsh, unjust or unreasonable manner.
These terms are often used interchangeably, but there are key differences between them; the main one being that unfair dismissal is a statutory right under the Employment Rights Act 1996, while wrongful dismissal is a contractual right.
A written arrangement that allows an employer to pay an employee the high income threshold or higher, over 12 months or more. The employee will not receive entitlements from a relevant award.
A constructive dismissal occurs when a person has resigned from his or her employment, but was forced to do so due to their employer's conduct. In effect, the employee is claiming that he or she had no real choice but to resign. In doing so, the employee must prove that the employer forced their resignation.
Genuine redundancy
This means your employer has made a decision that your job no longer exists, and your employment is to be terminated. Redundancy payments are a type of employment termination payment (ETP).
You take legal action by making a claim to the employment tribunal for unfair dismissal. However, it can be difficult to prove that there was a problem with a redundancy decision. Usually you can only claim unfair dismissal if you were in your job for 2 years when you're made redundant.
From 1 July 2023, the high income threshold in unfair dismissal cases is $167,500, up from $162,000 and the compensation limit will be $83,750, up from $81,000 for dismissals occurring on or after 1 July 2023.
(1) A dismissal is unfair if it is not effected for a fair reason and in accordance with a fair procedure, even if it complies with any notice period in a contract of employment or in legislation governing employment.
An award, employment contract, enterprise agreement or other registered agreement can specify when final pay must be paid. If it does not, the best practice is for an employee to be paid within 7 days of their employment ending or as per the next scheduled pay cycle.
Gross misconduct can include things like theft, physical violence, gross negligence or serious insubordination. With gross misconduct, you can dismiss the employee immediately as long as you follow a fair procedure.