Employers targeted by unreasonable unfair dismissal claims may take comfort following a recent tribunal ruling in the decision of G. Dircks v JimRoy Pty Ltd1.

JimRoy was successful when the full bench of the AIRC confirmed that an applicant, and her representative, Gary Dircks, were jointly and severably liable to pay the former employer’s party-party costs as a result of their unreasonable conduct in an unfair dismissal claim against JimRoy.

The decision is a significant win for employers who may be the subject of unfair dismissal claims where the former employee decides to pursue a claim that has little prospects of success.

In May 2008 an employee of JimRoy, Natasha Vukadinovic, was sacked after she allegedly lied, on two occasions, about the death of her parents in order to obtain compassionate leave.

Her representative, Dircks, with whom Vukadinovic had entered into a contingency fee agreement, continued to seek a financial settlement of her claim even after acknowledging that the applicant could not dispute that she had lied about her parents’ death in order to obtain the compassionate leave, and that, in any event, his argument would be that honesty was not “a requirement of her employment.”

Commissioner Tolley of the AIRC, rejected Dircks’s contention that an employee was not required to tell an employer the truth finding that ‘Honesty and trust between employers and employees lie at the foundation of the employment relationship’.

Commissioner Tolley ordered Dircks and the worker to jointly pay all of the employer’s costs. The full bench confirmed the findings made by Commissioner Tolley, at first instance.

This decision puts Applicants and their representatives on notice that unreasonable claims of unfair dismissal, made for the purposes of extracting settlement monies from former employers can come at a very high personal cost.

Nevertheless, employers ought to be continually mindful of taking preventative measures to avoid unfair dismissal claims by having comprehensive termination processes in place and following due process when forced to terminate employment relationships.

For more information about this article or to discuss your termination processes further, please contact Andrew Bland at [email protected]

1 [2009] AIRC 90 and AIRC Full Bench decision [2009] AIRCFB 679.