Last updated 27 June 2022

Unlawful dismissal is a different concept to unfair dismissal. An unlawful dismissal is a dismissal that is effected for a reason that is expressly made unlawful. Sometimes, a dismissal may be both unfair and unlawful. In short, an unlawful dismissal occurs when an employee is terminated for a reason that is unlawful.

Examples of unlawful reasons include a dismissal because of:

  • the temporary absence of that employee from work because of illness or injury
  • the employee’s membership of a trade union or participation in the union’s activities outside working hours or, with the employer’s consent, during working hours
  • a complaint made by the employee or proceedings taken against the employer by an employee
  • the employee’s refusal to negotiate, make or sign a certified/enterprise agreement
  • the employee’s application for or absence on parental leave
  • an act that would amount to unfair discrimination under the Anti-Discrimination Act 1991 (Qld) or similar Commonwealth legislation (e.g. a dismissal because an employee is pregnant).

The Fair Work Act 2009 (Cth) (Fair Work Act) provides for a 21 calendar-day time limit for an unlawful dismissal application to the Fair Work Commission (FWC).

Dismissal of ill or injured employees

Special rules apply to employees who are ill or injured, particularly if the illness or injury has occurred or was exacerbated during the course of the employment.

There are provisions in the Fair Work Act that protect employees who are temporarily unable to work because of illness or injury. There are also protections in the Queensland Workers’ Compensation and Rehabilitation Act 2003 (Qld) (WCR Act) that provide specific protection for up to 12 months for employees who are ill or injured because of something that has occurred at work (a compensable injury).

Temporary illness

It is unlawful for an employer to dismiss an employee if the reason for the dismissal is the temporary illness of that employee. In this context, ‘temporary’ means three months or an aggregation of three months absence because of illness or injury during a 12-month period.

There is a distinction to be made between terminating an employee because they are ill or injured and terminating an employee because that employee can no longer perform the inherent requirements of the position. Clearly, one may arise because of the other, and where an employee will no longer be able to continue in employment, the employer is not required to make a position available indefinitely.

It may also be unlawful under anti-discrimination for an employer to dismiss an employee because of an illness or impairment. Once again, a realistic distinction can be made if, as the result of illness or injury, an employee is no longer able to fulfill the inherent requirements of the position.

These are particularly difficult issues, and advice should generally be sought if an employee finds themselves in such a position.

WorkCover entitlements

The WCR Act may apply where an illness or injury arises out of or in the course of one’s employment in Queensland (a compensable injury). In most circumstances, to be a compensable injury, employment will need to be a ‘significant contributing factor’ to the injury.

An injury to a worker is taken to arise out of, or in the course of, the worker’s employment if the event happens on a day on which the worker is:

  • at the place of employment and engaged in an activity for, or in connection with, the employer’s trade or business, or
  • away from the place of employment in the course of the worker’s employment, or
  • temporarily absent from the place of employment during an ordinary recess, if the event is not due to the worker voluntarily subjecting themselves to an abnormal risk of injury during the recess (for these injuries employment needs not be a significant contributing factor).

An injury to a worker is also taken to arise out of, or in the course of, the worker’s employment if the injury happens on certain journeys related to the employment. For example, if the injury happens while the worker is on a journey:

  • between the worker’s home and place of employment, or
  • between the worker’s home or place of employment and a trade, technical or other training school that the worker is required, or expected, to attend, or
  • for an existing injury for which compensation is payable to the worker, between the worker’s home or place of employment and a place to obtain medical treatment, undertake rehabilitation or submit to a medical examination, or
  • between the worker’s place of employment with one employer and the workers’ place of employment with another employer.

For these events employment need not be a contributing factor to the injury.

The employer must insure each employee against injury sustained by the worker for the employer’s legal liability for compensation and the employer’s legal liability for damages.

Chapter 4 pt 4 of the WCR Act requires an employer (who satisfies specific criteria prescribed under a regulation) to appoint a rehabilitation and return-to-work coordinator to provide or to assist in the rehabilitation of an ill or injured worker. Similarly, the worker is under a duty to participate in the rehabilitation process. Failing to participate may lead to the insurer suspending the worker’s entitlement to compensation (ch 4 pt 5 WCR Act).

Because a key objective of the WCR Act is to encourage the prompt return to work and successful rehabilitation of the injured worker, an employee may be required to return to work on light or suitable duties while they recover before returning to their full-time normal duties.

The rules relating to unlawful dismissal and disability discrimination continue to apply to a worker with a compensable injury, but the WCR Act provides additional protections in certain circumstances.

Where a worker has suffered a compensable injury, it is unlawful for an employer to terminate the services of that worker within 12 months after a worker sustains an injury if the reason for the termination is solely or mainly because the worker is not fit for employment in a position because of the injury. However, an application by the worker for reinstatement in these cases can only be considered if, upon hearing the application, the relevant Industrial Relations Commission is satisfied on medical evidence that the worker is in fact fit to resume work. However, even when there is no remedy for an injured worker under the WCR Act, the termination of an injured worker in these circumstances may still amount to unlawful or unfair dismissal or may even be a breach of that worker’s rights under anti-discrimination legislation.

When (or if) it becomes clear that the worker will never recover sufficiently to carry out their pre-injury employment, then the employer and worker should consider either the possibility of redeployment or, if that cannot be reasonably done, the termination of the employment relationship.

General protections

Part 3.1 of the Fair Work Act contains additional causes of action for employees who have been injured in their employment for certain prohibited grounds. This provides a remedy for employees against unlawful detrimental action that falls short of dismissal. The general protections provisions also provide for remedies for employees that have been subjected to dismissal for prohibited reasons.

Generally, an employer must not take adverse action against an employee for reasons that include any of the following:

  • The employee has exercised or proposed to exercise a workplace right.
  • The employee has engaged in industrial activity.
  • There is a discriminatory reason.

Industrial activity covers, amongst other things, both membership and non-membership of a union, and involvement or non-involvement in union activities.

Workplace right

A person has a workplace right if they are:

  • entitled to the benefit of, or have a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body
  • able to initiate or participate in a process or proceedings under a workplace law or workplace instrument
  • able to make a complaint or enquiry either to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument or, if the person is an employee, in relation to their employment.

A typical example of the exercise of a workplace right is where an employee commences an industrial dispute proceeding against their employer in the FWC.

Adverse action

The general protections provisions are breached if a person takes adverse action against someone else because of one of the prohibited grounds. Examples of adverse action by an employer against an employee include:

  • dismissal
  • injuring the employee in their employment
  • altering the position of the employee to the employee’s prejudice
  • discriminating between the employee and other employees of the employer.

A typical example of adverse action is where, in the scenario above, the employee was terminated for commencing an industrial dispute proceeding.

Adverse action only becomes unlawful if it was taken as a reprisal for the fact that the employee had exercised or had proposed to exercise their workplace right(s) or industrial activity. Once it is alleged by an employee that adverse action occurred for a particular reason, a reverse onus applies to the other party. That is, in the example above, the employer would be presumed to have dismissed the employee for their participating in the industrial dispute proceeding, unless or until the employer could lead evidence to the contrary.

Remedy

A FWC proceeding for breach of a general protections provision involving dismissal must be commenced within 21 calendar days of the dismissal.

A FWC proceeding for breach of a general protections provision other than a breach involving dismissal (e.g. where the employee continues to be employed and they have suffered adverse action such as refusal of shifts) must be commenced within six years of the alleged contravention.

If a person commences such a proceeding alleging that they were terminated for an improper reason, then the FWC must hold a conference to deal with the dispute. If a person commences a proceeding in the FWC alleging that they were subject to adverse action other than termination for an improper reason, then the FWC must, if the parties agree, hold a conference to deal with the dispute.

If either class of dispute is not resolved by the conference, then the FWC will issue a certificate to that effect. An applicant then has 14 days to commence a general protections court application in either the Federal Circuit Court or the Federal Court of Australia. Remedies available upon a general protections court application include reinstatement, compensation and civil penalties. There is no cap on compensation in this jurisdiction, unlike the unfair dismissal jurisdiction. The penalties imposed by the courts to date have in some cases been significant.