The termination of an employment relationship can be a complex and difficult time for all involved, especially where there have been contraventions of the Fair Work Act 2009 (Cth) – “the Act”. Often the same set of facts can give rise to a claim in both General Protections and Unfair Dismissal and Applicants may be uncertain which is the better claim to run.
Relevant issues to consider when making this decision include the following:
- Was the Employer a “Small Business” (15 employees or less)? If so, it may be more difficult to bring a claim for Unfair Dismissal due to certain protections such businesses enjoy under the Act;
- Was the relationship that of an Employer/Employee or an Independent Contractor? If the relevant relationship was that of an Independent Contractor then it is not covered by the Unfair Dismissal laws;
- Had the employee served the minimum employment period required to bring an Unfair Dismissal claim? (12 months for small businesses and 6 months for all other businesses);
- Was the employee a high income earner? There is an income threshold (adjusted from time to time) for bringing an Unfair Dismissal claim. This income threshold does not apply under General Protections legislation; and
- What are the facts surrounding the case? Do they lend themselves more to the definition of Unfair Dismissal or General Protections?
Other factors to consider would include the legislative restrictions on damages and the relevant process for either cause of action.
While the facts of the specific case will determine which claim is recommended, Applicants need to make this decision carefully because under section 725 of the Act they cannot be run concurrently, and once a claim is being run it can not be changed from an Unfair Dismissal application to a General Protections application and vice versa. Both actions also have a strict 21 day limitation period in which to lodge a claim. The clock starts ticking on the 21 day time limitation from the day that the termination takes effect.
The importance of choosing the correct action at the commencement of the claim was reinforced by the Full Bench of the Fair Work Commission in Peter Ioannou v Northern Belting Services Pty Ltd. In this case the Applicant sought to use s 586 of the Act to amend their application under from an Unfair Dismissal claim under s394 of the Act to a General Protections claim under s365 of the Act. The Full Bench denied this application and reiterated that they were distinct processes that are not interchangeable. Once a claim has been lodged under one section it must remain under the same process.
This of course poses particular risks for self-represented litigants as they may be uncertain as to their options and which of the processes will be most beneficial to their claim.
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