Having to fire an employee is never easy. In fact, it’s more difficult than ever and can expose you to a raft of legal ramifications. If your decision is found to be unlawful or unfair you’ll likely face an expensive settlement, severe penalties and/or potential prosecution.

Since the introduction of the Fair Work Act (FW Act) in 2009, employees are far more likely to challenge your decision to dismiss them. In fact, the number of unfair dismissal claims lodged by Australian employees nearly tripled within a couple of years. Another concern for employers is that around 75% of unfair dismissal cases are settled via conciliation with the vast majority of these involving a payout.

Unfair dismissal occurs when an employee is dismissed harshly, unjustly or unreasonably. A dismissal can be unfair for many reasons. For example, if the employee is not notified before the decision to dismiss them is made, if the employee is not given an opportunity to respond to the reason for dismissal, or if the employee is dismissed for unsatisfactory performance but is not warned about their unsatisfactory performance beforehand and given a chance to improve.

Unfair dismissal laws under the Fair Work Act allow a dismissed employee to seek an order from the Fair Work Commission to make the former employer reinstate or compensate the employee because the employee has been dismissed unfairly. Reinstatement refers to an order that an employer reappoint a dismissed employee to the same position he or she held immediately before dismissal, or another position.

The unfair dismissal provisions of the FW Act apply to all national system employers. This means that they apply to all private sector employers in all states and territories except Western Australia (WA). WA private sector employers do not qualify as national system employers unless they are a constitutional corporation.

The FW Act unfair dismissal laws will not apply to you if you are a WA employer who is not a national system employer.

Employees are only eligible to apply for an unfair dismissal claim if they have been employed with you for a minimum of 6 months (or 12 months in the case of a small business employee), and as long as they are covered by a modern award or enterprise agreement, or if they are award- and agreement-free they need to be earning less than $142,000 p.a. (i.e. the 2017–2018 high-income threshold.

Casual employees
can also make an unfair dismissal claim if they have been employed on a regular and systematic basis for 6 months or more (or at least 1 year if you are a small business) and they have a reasonable expectation of continuing employment with you.

If an employee makes an unfair dismissal claim against an employer, the application must be filed with the FWC within 21 days of the termination of their employment. There are some circumstances when a late application may be accepted by the FWC.

So what does an employer do if the FWC notifies it that an ex-employee has made an unfair dismissal claim against them?

The employer needs to respond to the claim by completing the relevant form from the FWC website – stating why it does not believe the dismissal was unfair. If there is an initial matter to raise, now is the time the employer should do that because if it is able to successfully challenge the unfair dismissal claim at this early stage, the applicant’s claim will not proceed and no conciliation or hearing will be necessary. If the initial matter (or objection) is unsuccessful, the complaint will be referred to conciliation. An example of an initial matter is that the employee’s salary was above the high-income threshold and therefore the employee is not eligible to make the claim.

The vast majority of FWC unfair dismissal conciliations are successful. From 2016 to 2017, 78.9% of unfair dismissal conciliations resulted in a settlement of the claim. If a settlement is reached at conciliation, the parties will normally commit the agreement to writing and finalise the claim on the agreed terms.

The safest bet for employers is to ensure that all policies and procedures for termination of employment are watertight. When dismissing an employee, employers must carry out a procedurally fair process and be sure that if a claim of unfair dismissal is made against them that they have records of this process to prove it was undertaken fairly.


Top stories for Unfair Dismissal


Employer’s lack of IR expertise ‘does not wash’: FWC

Unfair Dismissal

In a tough economic climate, businesses will sometimes look at reducing wage expenditure to cut costs. But can you legally reduce an employee’s pay? A quick online search will reveal scratch-the-surface information from a few websites that basically state that […]

By Portner Press on July 12th, 2019

Employee’s sacking by text “plainly unjust” FWC rules

Unfair Dismissal

The Fair Work Commission (FWC) has taken exception to a small business’s dismissal of a casual employee over text, which Commissioner Ian Cambridge described as “unconscionably undignified”. AFS Security 24/7 Pty Ltd dismissed its casual employee of more than two […]

By Portner Press on July 10th, 2019

Mother-in-law’s advances forced employee to quit

Unfair Dismissal

The Fair Work Commission (FWC) has found that the employee of a small family business had no choice but to resign after his hours were reduced when he made a sexual harassment complaint. The employee at Delshine, a cleaning chemical […]

By Portner Press on July 8th, 2019

Employer forced to rehire boozy employee

Unfair Dismissal

An electrical company has lost its appeal of a Fair Work Commission (FWC) decision in March where it was ordered to rehire a woman who got drunk and vomited at a client’s drinks function. Ryan Wilks Pty Ltd submitted that […]

By Portner Press on July 3rd, 2019

GPS evidence was insufficient to dismiss speeding driver: FWC

Unfair Dismissal

A small business must pay $17,000 to a truck driver it sacked for speeding after the Fair Work Commission (FWC) found he was unfairly dismissed. Green Gables Express Pty Ltd conducted a retrospective review of the employee’s driving speeds during […]

By Portner Press on June 28th, 2019

One Nation candidate alleges she was sacked for political views

Unfair Dismissal

A senior employee who was sacked after standing as a candidate for the One Nation party is suing her employer, a wind turbine manufacturer, alleging it took adverse action against her because of her political views. Gaye Cameron, who ran […]

By Portner Press on June 21st, 2019

Poor performance cannot be dealt with as misconduct, FWC rules

Unfair Dismissal

A Tokyo Sushi franchisee who thought she could give her employees a raw deal has been hit with $383,616 in penalties from the Fair Work Ombudsman (FWO). Ms Kiyoshi Hasegawa was personally fined $63,936 for underpaying 31 employees a total […]

By Portner Press on June 19th, 2019

How the unfair dismissal high-income threshold is determined

Unfair Dismissal

An employee who is not covered by a modern award or an enterprise agreement can only make an unfair dismissal claim under the Fair Work Act 2009 (Cth) (FW Act) if their ‘annual rate of earnings’ is less than the […]

By Hannah Pelka-Caven on June 7th, 2019

Employee with cancer was unfairly dismissed: FWC

Unfair Dismissal

A wholefood café owner has been lambasted by the Fair Work Commission (FWC) for her summary dismissal of a chef who couldn’t attend work after he received cancer treatment. Gabrielle Levette, the owner of Urban Orchard Food in Sydney’s Circular […]

By Portner Press on May 31st, 2019

No pity for SUICIDAL employee

Unfair Dismissal

An employee who attempted to take his own life after being dismissed from his job has been allowed to file his unfair dismissal application 33 days late. Damstra Technology had verbally dismissed the employee with immediate effect for allegedly drafting […]

By Portner Press on May 27th, 2019