Blog

Compensation for unfair dismissal

25 Aug 2016

Topics

  • Compensation
  • Employment Law
pegs on line

We recently completed a claim for compensation for a house maid who was formerly employed by an embassy in Canberra. Her initial contract 10 years ago was for a period of twelve months, and there had been an implicit renewal of her contract each year ever since.

In 2015, she suffered a work-related injury and had time off work. The employers sought to terminate her employment because she was taking excessive amounts of time off work.

It was not stated by the employer, but the fact that she was 77 years of age, may also have been a factor. Our client’s evidence was that she had at no time indicated any desire to stop work and wanted to return to her duties as soon as the injuries subsided.

The Fair Work Commission (Deputy President Kovacic) on 15 July 2016, in granting our client’s application for compensation for unfair dismissal, made a number of useful comments which should be considered in future cases:

  1. Even if the original contract of employment had been specifically renewed from year to year, the employer was wrong to seek to terminate her employment half way through the year, as opposed to the anniversary date of her contract. The Court found that there was no valid reason for the early termination.
  2. The Tribunal found that she was given no opportunity to respond to the reason given in the letter of termination. No allegation was made as to unsatisfactory performance. A combination of these factors found in favour of a finding that our client’s dismissal was harsh and unjust and unreasonable.

The Tribunal then turned to the remedies available.

  1. Our client could not be reinstated in view of the breakdown of the relationship of trust between employer and employee and accordingly, the Court looked at compensation. It accepted that a woman of her age would have difficulty obtaining employment and therefore accepted that the full six month (capped under section 392(5)) should be awarded.
  2. Consideration was given as to whether an action could be brought for wrongful termination on the basis of her age, however, we felt there was insufficient evidence to conclusively establish that claim. Accordingly, the outcome was very reasonable and our client was happy with the result.

Many cases of this kind are settled for about 4-6 weeks compensation, however here we showed that the Tribunal was prepared to accept evidence supporting a full 6 months of compensation. The lesson to be learnt is that you should not necessarily compromise a claim for compensation for a limited payment, without looking at all the relevant factors, as the six months of lost wages secured by taking the claim to the Tribunal is certainly a fairer outcome for the client.

If you require assistance with employment matters and in particular unfair dismissal claims, contact our employment law team today.