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Unfair dismissal – get it right at the start

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If you don’t pay attention to this one important detail at the start, you could lose your right to bring an unfair dismissal claim.

In Western Australia, two unfair dismissal jurisdictions operate side by side.

The Fair Work Act 2009 (Cth) has created a national workplace relations system, and there is also a separate State system.  Which system applies will depend on various factors.

An employee who wishes to make a claim of unfair dismissal must make sure that they lodge their application in the right jurisdiction, as only one application can be made at a time.

Why it matters

Unfair dismissal applications have a short deadline

If you are covered by the national system, you must lodge an unfair dismissal application with the Fair Work Commission 21 days after the dismissal took effect.

If you are covered by the State system, your unfair dismissal application must be lodged with the Western Australian Industrial Relations Commission (“WAIRC”) 28 days after the dismissal took effect.

Exceptional circumstances required

In the national system, the application deadline will only be extended if you satisfy the Commission that there were exceptional circumstances. Circumstances may be exceptional if they are out of the ordinary course, unusual, special or uncommon.

The exceptional circumstances must have existed for the entire 21-day period so, if you were sick for only 5 days, you would not be eligible for an extension of time to apply on that ground.

In the State system, you can only get a extension if there is an acceptable explanation for the delay which makes it fair for the WAIRC to accept the claim.

When deciding whether to give an extension, the WAIRC may consider the merits of your unfair dismissal application, fairness to other persons in the same situation, whether or not prejudice will be caused to your former employee and action taken by you to contest the termination (this type of action may favour the granting of an extension).

The consequences of getting it wrong

Whether you lodge your claim in the national system with the Fair Work Commission or in the State system with the WAIRC, your former employer can lodge a “jurisdictional objection”. This means the former employer disputes the power of the Fair Work Commission or the WAIRC (as the case may be) to deal with the application.

In other words, the employer may try to knock out your claim on the ground that you started in the wrong jurisdiction.

Imagine if you applied to the Fair Work Commission and your former employer challenged the Fair Work Commission’s jurisdiction to hear the matter. By the time the Commission has decided, you may have missed the deadline to apply in the State system. You would have to apply for an extension of time, but you cannot be sure that you will get one.

You cannot get an automatic extension in either system just for missing the deadline due to a lodgement error.

What is the “right jurisdiction”?

Even lawyers grapple with this question at times.  Either the State or national system may apply to a Western Australian employee.  Which applies depends on the legal status and business activities of the employer.

National system employers

The reason why we have two systems stems from the Australian Constitution, which gives the Commonwealth government only limited powers.   This includes a power to make laws regarding “constitutional corporations”.  A constitutional corporation is:

  1. a foreign corporation (formed overseas); or
  2. a trading corporation (provides goods or services for reward – e.g., in exchange for the payment of money); or
  3. a financial corporation (borrows and lends or deals in finance as its main activity).

Most companies that run a business for profit will fall within the definition of a constitutional corporation. Constitutional corporations are national system employers and the national system covers their employees. Employees of Commonwealth agencies and employees working in the aviation and maritime industries generally fall within the national system too.

State system employers

You are covered by the State system if your employer is a sole trader or a partnership.

Some tricky examples

Some entities may be a national system or a State system employer depending on the circumstances.

The employers that can be trickier to classify include the following:

  • An incorporated association.  Typically a not-for-profit organisation that must use its funds to further the organisation’s objectives rather than profits. An unincorporated association may be a constitutional corporation if it engages in sufficiently substantial trading or financial activities. Otherwise, the State system applies.
  • A local government body may fall within the national system depending on its activities.
  • If a trust was the employer, the employer will usually be the trustee.  In some cases it might be a beneficiary. In very general terms, you will likely be covered by the national system if the trustee is incorporated. If the trustee is an individual, you may fall within the State system.  We suggest seeking advice before lodging a claim against a former employer of this type.

If you are unsure whether your employer is a national or State system employer, consider seeking professional advice.

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About

Rachel Lamb     rlamb@taylorsmart.com.au
Rachel Lamb is a member of our Commercial Litigation practice group. She has previous experience working in the commercial law department of a well recognised commercial law firm. Rachel currently provides advice and representation in dispute resolution matters including in the areas of contractual disputes, and property, consumer and corporations law.

Peter Nevin     pnevin@taylorsmart.com.au
Peter Nevin is a Partner in our Commercial Litigation practice group. He specialises in commercial and general litigation, and provides detailed advice on industrial relations issues to both employers and employees. He also provides advice and representation in estate disputes on behalf of executors, beneficiaries and third party claimants.

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