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Unfair dismissal

Last updated March 2023

This chapter explains when a dismissal is unfair, the unfair dismissal claims process and how to avoid a claim being made against you.

What is unfair dismissal?

Under the Fair Work Act 2009 (Cth) (FW Act), an employee who believes they were unfairly dismissed can seek an order from the Fair Work Commission (FWC) to make the former employer reinstate or compensate them.

Definition: Unfair Dismissal

Unfair dismissal occurs when an employee is dismissed harshly, unjustly or unreasonably.
Definition: Dismissal

Dismissal occurs when an employer terminates the employment of an employee.

A dismissal will be unfair if any of the following apply:

  1. There is no valid reason for the dismissal relating to the employee’s conduct or capacity (this does not apply where redundancy is the reason for dismissal).
  2. You do not notify the employee that their employment is in jeopardy before deciding to dismiss them.
  3. You do not notify the employee of the reason for dismissal.
  4. You do not give the employee an opportunity to respond to the reason for dismissal. This means giving the employee a genuine opportunity to convince you that they should not be dismissed.
  5. You unreasonably refuse to allow the employee to have a support person present at any discussions relating to the dismissal.
  6. In the case of dismissal for unsatisfactory performance, you do not warn the employee about their unsatisfactory performance nor give them a chance to improve.

Case Law: Mahoney v Bechtel Construction (Australia) Pty Ltd (2014)

In Mahoney v Bechtel Construction (Australia) Pty Ltd (2014), a construction company dismissed a crane driver and rigger for attending an unlawful meeting organised by the union. The dismissed employee made an unfair dismissal claim.

The employer had directed the employee to attend a disciplinary meeting. At the conclusion of the meeting, the employer handed the employee a pre-prepared and pre-signed dismissal letter. The dismissal letter simply stated that the employee had participated in unlawful industrial action on 3 July 2013 by refusing to perform work.

The FWC ruled that this notification was not sufficiently specific because it lacked the details around the industrial action.

The FWC also ruled that the employer did not give proper consideration to the employee’s response and the unique circumstances applying to the employee, namely that the employee did not attend the meeting that preceded the union meeting and did not know a union meeting had been scheduled. He only attended the union meeting late and returned to his duties while others met after they were due back at work.

Although the employee was given an opportunity to respond to the allegations, the approach taken was formulaic, the decision to dismiss him was made beforehand, and his responses were not properly taken into consideration.

Therefore, although the attendance at the meeting amounted to unlawful industrial action, the FWC ruled that this was not a valid reason for dismissal because of the employer’s failure to adequately consider the factual circumstances of the employee’s case.