Unfair dismissal - What types of employment will qualify for an unfair dismissal claim?

National system employees

The unfair dismissal provisions in the Fair Work Act apply to employees in the national system: section 380.

 

To determine whether an employee is employed by a national system employer see the National System Employer Tool page in our menu above.

 

An employee of a national system employer who has been dismissed is eligible to make an application for unfair dismissal to the Fair Work Commission, if:

  • they have completed the minimum period of employment; and

  • they earn less than the high-income threshold of $154.500 (2020-2021); or

  • their employment is covered by a modern award; or

  • an enterprise agreement applies to their employment.

 

Dismissed employees who do not come under the Fair Work Act may be covered by state unfair dismissal laws. Termination of employment may also give rise to a common law claim for breach of contract, although such claims are expensive and may also be difficult to establish.

Independent contractors

Workers excluded from the national employment system are not eligible for statutory unfair dismissal protections

 

One such group or workers are independent contractors.

 

However, a court may determine that an independent contractor is a common-law employee and eligible to claim unfair dismissal if their engagement has the attributes of an employment relationship.

 

The question of whether a worker is an independent contractor or employee depends on the “real substance of the relationship in question” rather than the label given to it by the parties.

Vocational placements and volunteers

Generally, a person serving a placement with an employer for which they receive no remuneration or other entitlements as a requirement of an educational or training course authorised under law or an administrative arrangement of the Commonwealth, state or territory is not considered an employee for the purposes of section 13 of the Fair Work Act.

 

While volunteers are not considered employees for the purposes of the unfair dismissal provisions courts may determine that a person working as a volunteer to be an employee. 

Fixed-term contracts

An employee has not been dismissed for the purposes of unfair dismissal laws if the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season and the employment terminates at the end of that period, on completion of the task, or at the end of the season: s 386(2)(a)

Unqualified versus limited right to terminate

A “fixed-term contract” which provides an unqualified right to terminate employment on notice or with a payment in lieu of notice will not be a “maximum term contract” and is not covered by the exclusion under section 386(2)(a): White v Sydney College of English Pty Ltd and Andersen v Umbakumba Community Council.

 

However, if the right to terminate is limited in effect such that, eg, it operates on a party’s default or breach of contract then it may still be a contract for a specified period.

 

Note that if the maximum term contract expires at the end of the specified period by the effluxion of time there will be no termination “at the initiative” of the employer and the employee will not be able to seek an unfair dismissal remedy in any event: Khayam v Navitas English Pty Ltd.

Rolling contracts

When there is a series of fixed-term contracts with renewals being a mere formality, the Fair Work Commission may assess whether the reality of the employment relationship is on a part-time or full-time basis: D’Lima v Princess Margaret Hospital and Khayam v Navitas English Pty Ltd t/a Navitas English.

Casual employees

Casual employees are eligible to make an unfair dismissal claim however periods of service as a casual do not count towards the qualifying period of employment (see below) unless the person was employed on a regular and systematic basis and has a reasonable expectation of ongoing employment on a regular and systematic basis: s 384(2)(a).

Labour hire workers

Labour hire agencies contract with businesses to supply them with workers. Labour hire workers are contracted by labour-hire agencies. Although personnel work for the host business, the worker’s employment is with the agency.

 

Therefore, labour-hire workers are unable to claim unfair dismissal against host companies who have engaged the services of a labour-hire agency.

Labour hire workers may have other claims against the host business, including under general protections provisions in Pt 3-1 of the Fair Work Act.

 

One remedy that can be imposed by the court is to require a host business to allow an unfairly dismissed labour-hire worker to return to the worker’s previous position: CFMMEU v BM Alliance Coal Operations Pty Ltd. 

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Fair Work Unfair Dismissal Rights