Key Takeaways
- Unfair dismissal is a common issue in Australian employment law, where employees are protected under the Fair Work Act 2009.
- A dismissal is considered unfair if it is harsh, unjust, unreasonable, not a genuine redundancy, or inconsistent with the Small Business Fair Dismissal Code.
- Employers must ensure both substantive and procedural fairness when terminating employment, including having a valid reason and following fair processes.
- If an unfair dismissal claim is made, employers must respond promptly, engage in conciliation, and prepare for a hearing if necessary.
- To reduce legal risks, employers should document all procedures, have dismissal policies, train managers, and seek legal advice when necessary.
Unfair dismissal remains one of the most common employment law issues faced by Australian businesses. Under the Fair Work Act 2009 (Cth), employees are protected from being dismissed in ways deemed harsh, unjust, or unreasonable. For employers, this means any termination must be carefully managed and legally justified to meet their employer obligations under Australian law.
The following provides an overview of what constitutes unfair dismissal, outline key employer obligations, and provide actionable insights for managing terminations lawfully and effectively in line with Fair Work unfair dismissal process requirements.
What Employers Need to Know About Unfair Dismissal
What Makes a Dismissal Unfair?
A dismissal is considered “unfair” under the Fair Work Act if:
- It was harsh, unjust, or unreasonable
- It was not a genuine redundancy
- It was inconsistent with the Small Business Fair Dismissal Code (for small employers)
The Fair Work Commission (FWC) determines whether these criteria are met. Employers must ensure both substantive fairness (a valid reason) and procedural fairness (a fair and lawful process).
Who Can Make an Unfair Dismissal Claim?
To lodge an unfair dismissal claim, an employee must:
- Have completed at least 6 months’ service (or 12 months if employed by a small business)
- Earn below the high-income threshold (currently $167,500), unless covered by an award or enterprise agreement
- File the claim within 21 days of the dismissal date
Employer Obligations Before Terminating Employment
1. Have a Clear, Valid Reason
A dismissal should be based on:
- Performance issues that are documented and supported by evidence
- Misconduct or serious misconduct
- Business-related reasons, such as a genuine redundancy
The reason must be communicated to the employee and should not be vague or unsubstantiated.
2. Follow Procedural Fairness
Employers must:
- Notify the employee of the reason for dismissal
- Give the employee an opportunity to respond
- Consider their response before making a final decision
- Allow a support person if the employee requests one
Procedural fairness dismissal Australia is a key principle under the Fair Work Act. Failing to observe it can result in a successful claim, even if the dismissal reason is valid.
3. Follow the Small Business Fair Dismissal Code (if applicable)
If your business employs fewer than 15 people, you must follow the Small Business Fair Dismissal Code to lawfully terminate employment. The Code sets out simplified requirements and protections for small business termination Fair Work Code compliance.
What to Do If an Unfair Dismissal Claim Is Made
Step 1: Submit a Timely Response
You must file a formal response with the Fair Work Commission within 7 calendar days using Form F3. A timely and accurate response is critical in defending your unfair dismissal claim response.
Step 2: Engage in Conciliation
Conciliation is an informal resolution process facilitated by the FWC. Many disputes are resolved at this stage through negotiation or settlement.
Step 3: Prepare for a Hearing (if unresolved)
If the matter proceeds to a formal hearing, employers must:
- Provide evidence supporting the dismissal (e.g., written warnings, performance records)
- Demonstrate adherence to procedural fairness dismissal Australia
- Be ready to defend the decision through witness testimony or legal submissions
Employer defence against unfair dismissal is strengthened by documentation and legal preparation.
Reducing Legal Risk: Best Practices for Employers
To prevent unfair dismissal claims and ensure legal termination of employment in Australia, employers should:
- Document everything: meetings, warnings, and performance discussions
- Have workplace dismissal policies in place
- Train managers in lawful dismissal procedures
- Seek legal advice before terminating high-risk employees
Guidance You Can Trust
Managing dismissals is a sensitive and legally complex process. Employers who are proactive—by understanding employee termination rights and responsibilities, ensuring their policies are compliant, their procedures fair, and their decisions evidence-based—are better placed to reduce risk and maintain a safe, compliant workplace.
If you are unsure whether your practices align with Fair Work obligations or facing a potential claim, it is important to seek legal guidance early. Addressing concerns before they escalate is not only cost-effective but can preserve your organisation’s reputation and stability.
At Pentana Stanton Lawyers, we help employers understand their rights and obligations under the law. Our experienced employment lawyers provide clear advice, practical solutions, and strong representation in matters involving unfair dismissal and workplace disputes.
Contact us today to find out how we can assist with your employment law needs.
