Introduction

Unfair dismissal remains a significant concern for employees and employers alike. In Australia, employment law provides protections to ensure workers are not dismissed unfairly, arbitrarily, or in a manner that contravenes established workplace rights. This article explores what constitutes unfair dismissal, the legal framework governing such claims, and the options available to affected employees.

What Constitutes Unfair Dismissal?

Unfair dismissal occurs when an employee is terminated in a way that is harsh, unjust, or unreasonable. Under the Fair Work Act 2009 (Cth), an employee may be unfairly dismissed if:

1. Their dismissal was not based on valid reasons related to conduct, capacity, or operational requirements.
2. They were not given procedural fairness, including an opportunity to respond to allegations or improve performance.
3. The dismissal was disproportionate to the alleged misconduct or performance issues.
4. The dismissal was in contravention of workplace laws, such as protections against discrimination, adverse action, or workplace rights violations.

Who Can Lodge an Unfair Dismissal Claim?

Employees covered by the national workplace relations system may lodge an unfair dismissal claim with the Fair Work Commission (FWC) if they meet the following criteria:
• They have completed the minimum employment period (six months for larger employers, 12 months for small businesses).
• Their employer is not a small business (fewer than 15 employees), unless they have not followed the Small Business Fair Dismissal Code.
• Their annual salary is below the high-income threshold (indexed annually).

Independent contractors, casual employees (unless they had a regular and systematic pattern of work), and employees of state government entities are generally excluded from making unfair dismissal claims under the Fair Work Act.

Common Grounds for Unfair Dismissal

1. Performance-Based Dismissals
   Employees must be given adequate warnings and opportunities to improve before being dismissed for poor performance. A failure to provide clear warnings or performance management processes may render the dismissal unfair.
2. Misconduct Allegations
   Serious misconduct—such as theft, fraud, or violence—can justify summary dismissal. However, dismissals based on unproven allegations, procedural flaws, or disproportionate punishment can be challenged.
3. Redundancy
   A dismissal due to redundancy must be genuine and follow fair consultation processes. If an employee is dismissed under the guise of redundancy to remove them unfairly, it may be deemed an unfair dismissal.
4. Constructive Dismissal
   Employees who resign due to coercion, toxic workplace conditions, or unreasonable employer conduct may still have grounds for an unfair dismissal claim under constructive dismissal principles.

Unfair Dismissal vs. General Protections Claims

Unfair dismissal is different from general protections claim, which deals with adverse action taken against employees for exercising workplace rights. If an employee is dismissed for reasons such as raising a complaint, taking sick leave, or union involvement, they may have a claim under the general protections provisions instead of unfair dismissal.

The Unfair Dismissal Claim Process

1. Application to the Fair Work Commission
   An employee must lodge an unfair dismissal application (Form F2) or (Form F8) with the FWC within 21 days of the dismissal taking effect.
2. Conciliation and Mediation
   The FWC facilitates conciliation to help both parties reach a resolution, often involving compensation, a reference, or reinstatement.
3. Formal Hearing
   If conciliation fails, the case proceeds to a formal hearing, where the FWC considers the reason for dismissal, procedural fairness, and mitigating factors before making a legally binding decision.

Remedies for Unfair Dismissal

If an employee succeeds in an unfair dismissal claim, the FWC may order:
• Reinstatement (returning the employee to their position)
• Compensation (up to 26 weeks’ pay, capped at half of the high-income threshold)
• Other remedies (such as correcting employment records)

Notably, compensation is not awarded for hurt feelings or distress—it is purely economic.
Employer Obligations and Best Practices

Employers can mitigate the risk of unfair dismissal claims by:
• Ensuring clear workplace policies and performance management processes
• Providing proper warnings and performance reviews
• Following procedural fairness before dismissal
• Consulting with employees in cases of redundancy

Conclusion

Unfair dismissal laws exist to protect employees from arbitrary or unjustified terminations while allowing businesses to make lawful employment decisions. Employees who believe they have been unfairly dismissed should seek legal advice or contact the Fair Work Commission promptly to explore their rights and remedies.

If you believe you have been unfairly dismissed, securing the right legal representation is crucial to protecting your rights and achieving the best possible outcome. Pannu Lawyers stands out as the best legal firm in Sydney due to their exceptional legal expertise, client-centric approach, strong track record, community commitment, comprehensive services, and strong track record in unfair dismissal cases. Our dedicated team provides personalised legal support, strategic advocacy, and tailored solutions to ensure justice for our clients.

With over 750 five-star Google reviews and extensive experience in employment law, we have successfully defended numerous unfair dismissal claims, wrongful terminations, and workplace disputes. If your career and reputation are at stake, don’t wait—take action now.
If your reputation is at stake, call Pannu Lawyers to defend your reputation. Our contact numbers are 02 9920 1787 or 1300 VAKEEL.