From 1 July 2009 unfair dismissal laws have applied under the federal workplace relations system with the commencement of the Fair Work Act.

From 1 July 2009 unfair dismissal laws have applied under the federal workplace relations system with the commencement of the Fair Work Act 2009.

Unfair dismissal is the term used to describe the dismissal of an employee that is carried out by an employer without sufficient or acceptable reason and/or without the employer following proper procedure. The Fair Work Commission can order reinstatement or compensation in this situation.
A dismissed employee is unable to bring a claim if dismissed within the first six months of employment. If the business from which the employee is dismissed employs fewer than 15 employees, the employee is unable to bring the claim if he/she was dismissed within the first 12 months of employment. 


A ‘genuine redundancy’ is not an unfair dismissal in the Fair Work system. That is, a dismissal will be a redundancy if the employee's job is no longer required to be performed by anyone because of changes in the operational requirements of the employer's enterprise.
However, if it would have been reasonable for the dismissed employee to be re-deployed within the employer's enterprise (which can include associated entities), the dismissal will not be presumed to be a genuine redundancy.
A failure to follow consultation obligations in awards or enterprise agreements can also expose an employer to the prospect that the dismissal will not be considered a genuine redundancy. In view of this, employers should pay close attention to consultation conditions in any relevant award or enterprise agreement.

Fair Work Commission

The industrial relations tribunal, the Fair Work Commission (previously called Fair Work Australia) is responsible for handling unfair dismissal claims. Claims must be made within 21 days after the dismissal takes effect, although the Fair Work Commission (FWC) has the discretion to extend the period in individual cases.
The FWC is able to take into account a variety of matters in considering a claim. The considerations relevant to unfair dismissals are:
  • whether there was a valid reason for the dismissal related to the person's capacity or conduct
  • whether the employee was notified of the reason
  • whether the employee was given an opportunity to respond
  • any unreasonable refusal by the employer to allow the employee to have a support person present 
  • whether the employee had been warned about any unsatisfactory performance before the termination (if relevant)
  • the degree to which the size of the employer’s enterprise or the absence of dedicated human resource management specialists would be likely to impact on the procedures followed in effecting the termination
  • any other relevant matters.


Reinstatement is an available remedy and monetary compensation is capped at 26 weeks pay or one-half the amount of the high income threshold, whichever is the lesser. The high income threshold is indexed each year from 1 July.
Click here for detailed commentary on unfair dismissal.


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