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Unfair dismissal and capacity

When considering whether the termination of employment of an employee constitutes an unfair dismissal, the Fair Work Commission looks firstly at jurisdictional issues, then to whether there was a valid reason for the dismissal and then to whether even in that event the dismissal was harsh, unjust or unreasonable; see s.385 Fair Work Act 2009.

As to that second issue, the Commission is required by the Act to take into consideration whether there was a valid reason for the dismissal related to the person’s capacity or conduct.

The Commission has consistently held that in this context that “capacity” means that there can be a valid reason for dismissal where an employee does not have the ability to do his or her job as required by the employer.

Examples in which an employee’s capacity has been held to be a valid reason for dismissal include

  • persistent and continuing under-performance
  • physical incapacity resulting in the employee being unable to perform the inherent requirements of the job; and
  • not having a current qualification to undertake the requirements of the job for example a driver’s licence,  security clearance or a working with children authority when this is necessary for the position.
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