Big Spike in Unfair Dismissal Compensation

Whilst the figures in this area are not always easy to obtain and they can be interpreted differently as well, it appears from the recent figures produced in the Fair Work Commission’s Annual Report that there has been a big spike in the amount of compensation paid to settle unfair dismissal claims. 

From our research, it appears that the amount of compensation paid by employers to settle these claims has more than doubled from last year’s figures.  This is consistent with our experiences over the last 12 months.

While a significant percentage of claims are still settled for commercially realistic amounts, the statistics indicate that making decisions to terminate staff based on an expectation that you will be able to settle maters that may arise for a relatively small amount is getting more risky.  This is particularly the case in Western Australia where numerous people are losing high paying jobs and then can’t find a new position, or if they can it is on much less money.

It is somewhat of a worrying trend, especially given that dismissing staff requires both a valid reason and procedural fairness. 

If you are having problems with staff, call our office on 08 9240 4230 early in the piece rather than leaving it until it becomes a crisis.  Most situations can be resolved if they are addressed early.