Avoid the Unfair Dismissal Trap: Protect Your Company and Learn from the 14,000 Businesses hit with Claims

What is Unfair Dismissal?

Unfair dismissal occurs when an employee is terminated in a harsh, unjust, or unreasonable manner. In the 2022-2023 financial year, the Fair Work Commission received over 14,000 unfair dismissal applications, highlighting how prevalent this issue is.

Why Does Unfair Dismissal Occur?

Unfair dismissal often results from:

• Miscommunication: A lack of clear communication can lead to misunderstandings about job expectations or performance issues, contributing to nearly 25% of all unfair dismissal claims.

• Lack of Documentation: Without proper documentation, such as written warnings or performance reviews, dismissals can seem arbitrary, leading to costly disputes.

• Emotional Decisions: Around 30% of unfair dismissal cases stem from employers making hasty, emotion-driven decisions rather than following a structured process.

• Insufficient Training: A study found that businesses with poorly trained managers were 40% more likely to face unfair dismissal claims than those with regular HR training.

  
  

What Does Unfair Dismissal Cost a Business?

The cost of an unfair dismissal claim can be significant:

• Legal Fees: Defending against a claim can cost businesses between $5,000 and $50,000 in legal fees, depending on the complexity of the case.

• Compensation Payments: In 2023, the average compensation for a successful unfair dismissal claim was $9,000. However, in some cases, this amount can exceed $40,000.

• Reputation Damage: A study by the Chartered Institute of Personnel and Development (CIPD) found that 75% of businesses reported a negative impact on their reputation following a high-profile unfair dismissal case.

• Productivity Loss: Businesses involved in unfair dismissal disputes can lose up to 15% of productivity due to diverted resources and lowered employee morale.

  
  

Navigating the complexities of unfair dismissal can be challenging, but you don’t have to face it alone. HarmonyHive HR specialises in helping businesses like yours prevent risks, avoid costly legal disputes, and maintain a positive workplace environment.

Our Balanced Employee Termination Solution Package is specifically designed to mitigate unfair dismissal claims. With extensive HR expertise and specialised legal knowledge in unfair dismissal, we offer tailored solutions to protect your business. Whether it’s policy development, management training, or expert advice, HarmonyHive HR is your partner in ensuring fair, compliant, and effective employee management.

Don’t let the risk of unfair dismissal claims disrupt your business. Contact HarmonyHive HR today to learn how we can help you stay compliant and safeguard your organisation’s future.