When workplace issues arise, especially involving claims of unfair dismissal, the Fair Work Commission (FWC) plays an important role in helping employees and employers resolve disputes quickly and fairly. One of the most common steps in this process is conciliation, followed by arbitration if the dispute cannot be settled.
This article explains what these processes mean and shares a real case handled by our firm, Shawn Mendis Lawyers, to help you understand how they work in practice.
Case Summary
In this case, an employee worked for almost one year but was on unpaid medical leave for several months. The employer expected her to return once her doctor confirmed she was fit for work.
However, after her medical certificate expired, the employee did not contact the employer or return to work. Despite the employer sending multiple emails asking about her return, there was no reply.
Later, the employee lodged a Form F2 – Unfair Dismissal Application with the Fair Work Commission, claiming constructive dismissal, believing she had been unfairly forced out of her job.
The employer, represented by Shawn Mendis Lawyers, responded with a Form F3 – Employer Response, stating that:
- The employee was not dismissed, and her position remained open.
- She was still on the company payroll and in the employment records.
- She could return to work at any time with medical clearance.
- No termination notice or separation certificate was issued.
Based on these facts, we argued that the Fair Work Commission had no jurisdiction to hear the case because there was no dismissal as defined under Section 386 of the Fair Work Act 2009
What is Fair Work Conciliation
Conciliation is an informal meeting where an independent conciliator from the Fair Work Commission helps both sides find a practical resolution. It usually takes place by phone or audio conferencing call.
The process is designed to be quick, confidential, and non-legalistic. The conciliator does not decide who is right or wrong. Instead, they help both sides explore settlement options.
A typical conciliation involves:
- The conciliator explains the process and goals.
- The employee is outlining their claim.
- The employer responds with their position.
- Both sides are privately discussing possible outcomes with the conciliator.
- The conciliator helps both parties reach a voluntary agreement.
What is Arbitration
If conciliation does not lead to an agreement, the matter can move to arbitration.
At arbitration, a Commission Member acts like a judge and formally decides the outcome. This includes reviewing evidence, hearing from both sides, and determining whether an unfair dismissal occurred.
The employee must show that:
- They were dismissed.
- The dismissal was harsh, unjust, or unreasonable.
If successful, the Commission can order reinstatement or compensation. The maximum compensation available under Fair Work is 26 weeks of pay, capped at half the high-income threshold.
From 1 July 2025, the high-income threshold is $183,100, so the maximum compensation would be $91,550.
The Outcome in Our Case
During the conciliation, the employee initially asked for nine weeks’ pay, around $50,000.
After discussions, the employer offered one week’s pay and a reference letter. The conciliator conveyed this offer to the employee, who then countered with a request for two weeks’ pay.
Both parties eventually agreed to two weeks’ pay and a reference letter, resolving the matter without the need for arbitration.
To make the agreement final, the employer required that there be no cooling-off period. Normally, employees have three days to withdraw from a settlement agreement, but both parties can agree to waive it for certainty and closure.
Lessons for Employers and Employees
For Employers
- Always document communication with employees, especially during extended leave.
- Keep employment open until there is a clear resignation or lawful termination.
- Use conciliation as an opportunity to resolve matters quickly and cost-effectively.
For Employees
- Silence or non-return to work does not automatically mean dismissal.
- Maintain open communication with your employer during medical leave.
- Seek legal advice before assuming a constructive dismissal has occurred.
Why Conciliation Matters
Conciliation allows both sides to avoid lengthy hearings and protect relationships. It focuses on practical outcomes such as compensation, reference letters, or mutual agreements to end employment.
At Shawn Mendis Lawyers, we treat every conciliation as an opportunity for a fair and commercial resolution, ensuring clients are fully supported and legally protected.
Final Thoughts
Fair Work conciliation and arbitration are designed to balance the rights of both employees and employers. Understanding how these processes work helps avoid unnecessary disputes and promotes fair treatment in the workplace.
If you are an employer or employee facing an unfair dismissal claim or other workplace issue, our team at Shawn Mendis Lawyers can help you navigate the process with clarity and confidence.
by Shawn Mendis – Principal Solicitor
Shawn Mendis Lawyers | Your Trusted Legal Partner in Every Legal Journey
📍 1/198 Henry Road, Pakenham VIC 3810
📞 03 8774 9663 | ✉️ contact@shawnmendislawyers.au
