Remedies

Under both Federal and State law, the remedies for an unfair dismissal are reinstatement and compensation. Reinstatement will be ordered if it is practicable in the circumstances, but the most common remedy is compensation.

Compensation

Compensation is calculated so as to compensate the unfairly dismissed employee for losses resulting from the loss of the job. Both employer and employee sided factors are considered. These include:

the effect of the order on the viability of the employer’s business;
the length of service of the employee;
the remuneration that the employee would have received had employment not been terminated;
the effort of the employee in mitigating loss such as by taking up other work while waiting for the claim to be heard; and
any misconduct of the employee which may have contributed to the termination of employment.

Under the Workplace Relations Act 1996 (Cth) the AIRC is prohibited from awarding compensation for shock, distress or humiliation caused by the dismissal.

Calculation will depend on whether the applicant has found other employment. Where the employee has found other employment the calculation is based on the amount of wages lost between the date of dismissal and the date the employee commenced his or her new employment, less any amount paid to the dismissed employee up to the date of the hearing and any loss in salary between the former employment and the new employment. But the limit of compensation is $49,100 (as of 1 July 2006) or 6 months salary, whichever is greater. Where the dismissed employee has not subsequently found new employment, compensation is calculated by taking into account all relevant matters including the likely loss of income arising from the dismissal, the mitigation efforts of the worker, and any income earned in the intervening period.