Updated: Apr 3
Unfair dismissal happens when the employment of an employee is unfairly terminated by an employer. An employee that alleges they have been unfairly dismissed can begin legal action against their employer under the Fair Work Act 2009 (Cth).
In this article, you will learn what unfair dismissal is, as well as:
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This article is written by Farrah Motley, the Legal Principal of Prosper Law and an online employment lawyer.
What is unfair dismissal?
Unfair dismissal occurs when an employer unlawfully and unreasonably terminates the employment of an employee. The termination must be considered harsh, unjust or unreasonable in order to amount to unfair dismissal.
The concept of harsh, unjust or unreasonable
What is harsh, unjust or unreasonable is determined by a number of legal rules. Many of these legal rules are discussed in this article.
A dismissal is harsh if the dismissal was disproportionate to the conduct that the employee is alleged to have committed.
A dismissal is unjust if an employer did not have a valid reason to dismiss the employee.
A dismissal is unreasonable if an employer acted unreasonably during the dismissal, or did not give an employee procedural fairness.
To meet the legal threshold of unfair dismissal, the termination of employment must be either harsh or unjust or unreasonable (i.e. it only needs to meet one of these criteria).
What are some examples of unfair dismissal?
Here is a summary of what is considered unfair dismissal:
the employee is terminated for no reason.
the employee is terminated for poor performance but is not told how they have performed poorly or have not been provided with proper training.
the employee is not warned that the termination of their employment is a possible outcome if their performance does not improve
the alleged poor performance of the employee is not the employee's fault. A paragraph.
the employer has prepared a letter terminating the employee's employment prior to the performance meeting and it is therefore clear that the process was a sham.
performance may be in breach of their employment contract, but a proper process has not been followed by the employer.
an employee is forced to resign (also known as constructive dismissal) because of the conduct of the employer.
the conduct of the employee is not serious enough to warrant termination of employment.
These are just some examples. There are many more examples of unfair dismissal and you can speak to a workplace lawyer for more information regarding unfair dismissal.
Factors that are taken into account by the Fair Work Commission
Section 387 of the Fair Work Act 2009 (Cth) sets out a number of matters that the Fair Work Commission must take into account when determining whether the termination of employment was harsh, unjust or unreasonable. These include:
whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and
whether the person was notified of that reason; and
whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
if the dismissal related to unsatisfactory performance by the person--whether the person had been warned about that unsatisfactory performance before the dismissal; and
the degree to which the size of the employer's business would be likely to impact on the procedures followed in effecting the dismissal; and
the degree to which the absence of dedicated human resource management specialists or expertise in the business would be likely to impact on the procedures followed in effecting the dismissal; and
any other matters that the Commission considers relevant.
What is not unfair dismissal?
The following are examples where termination of employment is not unfair for the purposes of lodging an unfair dismissal claim:
the term of an employment contract or the task that the employee was engaged to perform comes to an end
an employee is performing poorly and the employer follows the proper process And the termination is not harsh, unjust, all unreasonable in the circumstances
an employee commits a serious breach of contract or engages in serious misconduct and the termination of the employment is not harsh, unjust or unreasonable in the circumstances.
If you are uncertain whether a dismissal is unfair or not, you should contact a workplace lawyer for legal advice.
A genuine redundancy is not unfair dismissal
If a person’s employment is terminated because of genuine redundancy, they will be unable to obtain a remedy for unfair dismissal.
A ‘genuine redundancy’ is defined in s 389 of the Fair Work Act 2009 (Cth) as being one whereby:
the person’s employment no longer requires the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s business; and
the employer has complied with any obligation in a Modern Award or Enterprise Agreement that applied to the employment to consult about the redundancy.
Small businesses and unfair dismissal
If a business is a ‘small business’ in that it employee fifteen people or less, there are slightly different rules that apply regarding unfair dismissal.
Those rules are described here and are contained in the Small Business Unfair Dismissal Code.
What can employers do to avoid a claim for unfair dismissal?
Employers cannot prohibit an employee from bringing an unfair dismissal claim
There are a number of things that employers can do to try and avoid a claim for unfair dismissal being brought against them. However, it is important to note that, despite an employer’s best efforts, an employee cannot (without signing a deed of release) be prohibited from bringing a claim for an unfair dismissal remedy.
Investigate issues properly
If an issue is raised in relation to an employee, an employer should thoroughly investigate that issue and determine the facts. This is important because if an employer proceeds down the path of dismissal based on incorrect information, then it is likely that the termination of employment will be considered unfair.
An employment law firm can assist employers to investigate workplace issues.
Deeds of release and unfair dismissal claims
If an employer is dissatisfied with an employee and wish to terminate their employment, but are concerned about the employee lodging an unfair dismissal application, a deed of release may be the best option.
If an employer needs a deed of release to be prepared, it is imperative to engage a workplace lawyer. Employment lawyers are trained to ensure that deeds of release are enforceable written in a way that still maintains the employer’s rights against an employee where appropriate.
Showing care and concern and parting on an amicable note
Unless an employee has engaged in serious misconduct that warrants immediate termination of the employment relationship, dismissal should be approached in an empathetic way.
For many people, their employment not only represents their financial livelihood but is a source of sociability and self-identity. For these reasons, termination of employment can be a highly emotive process for employees.
To cushion the blow of dismissal, employers should approach dismissing employees with compassion and understanding. This may take the form of:
offering access to an employee assistance program
making genuine attempts to help the employee secure alternative employment
ensuring that the employee is not caught off guard and was aware of issues in the lead up to termination
engaging in open, honest and regular communication
What can employees do if they think they have been unfairly dismissed?
Eligibility to apply for an unfair dismissal remedy
Ensure that you have been employed in your role for at least 6 months
There is a six month employment period that must be met before an employee who alleged unfair dismissal can submit an application. This is the reason why probationary periods are often set to six months, because employers can terminate an employee’s employment for any reason (except discriminatory reasons) during this period.
Submit an application for an unfair dismissal remedy within 21 days
If you are an employee and you think you may have been unfairly dismissed, it is important for you to act quickly. This is because you have 21 days from the date your employment was terminated to bring a legal claim against your employer.
If an employee doesn’t lodge an unfair dismissal application within 21 days, they must seek approval from the Fair Work Commission to extend this period. An employee must be able to demonstrate that there are exceptional circumstances that justified the employee failing to submit the application within the 21-day time period.
Matters that may be considered exceptional circumstances are discussed here.
Ensure that you earn under the high-income threshold
The high-income threshold is determined under the Fair Work Regulations 2009 (Cth). As at 1 July 2021, the high-income threshold is $158,500.
If an employee earns more than the high-income threshold, those employees do not have access to unfair dismissal remedies. Instead, high income earning employees must seek a remedy against their employer for breach of contract or adverse action.
If you are a high-income earner and believe you have been unfairly dismissed, contact a workplace lawyer to discuss your options.
Ensure that you are not considered to be a casual employee
If an employee is employed on a casual basis, they may not be entitled to an unfair dismissal remedy if they are not also engaged on a regular and systematic basis.
If an employee thinks they are engaged on a regular and systematic basis, even though their employment contract states they are engaged as a casual, the employee can apply for an unfair dismissal remedy and submit these arguments to the Fair Work Commission.
Case law examples of unfair dismissal in Australia
Process of dismissing an employee insufficient
Anderson v Thiess Pty Ltd  FWC 6568
In this case, the Commission found that the dismissal of Mr Anderson's employment was harsh and reasonable and awarded him $28,000 in compensation. This outcome came to the surprise of many because the conduct of Mr Anderson was particularly poor In that he sent an email to numerous staff that was highly offensive to persons of the Muslim faith.
The reason why the court considered that the dismissal was harsh and unreasonable was that:
Mr Anderson was 65 years of age and would have difficulty obtaining other employment;
Thiess relied too much on a previous verbal warning given to Mr Anderson for the same conduct; and
Thiess did not give Mr Anderson enough time to accept that the contents of his emails were inappropriate in the Thiess work environment and to apologise during the show cause process.
The dismissal of the employee was unfair
Morcos v Serco Australia Pty Ltd  FWC 7675
In this matter, the Commission found that the employee had been unfairly dismissed.
The employee was on a rostered day off and had consumed two beers when he was called in to carry out a shift. He was then randomly tested for alcohol, which returned two readings of 0.037 and 0.032 and was then sent home.
The employee worked a shift the next day but was subsequently terminated for coming into work after consuming alcohol, in breach of the employer’s drug and alcohol policy. The Commission found that the employee’s conduct was not serious enough to justify the termination of his employment and his employment was reinstated.
Dismissal process insufficient and failure to consider factors
Camilleri v IBM Australia Limited  FWC 5894
In this case, the Commission Found that the termination of Mr Camilleri’s employment was harsh, unjust and unreasonable and awarded Mr Camilleri 50% of his last remuneration as well as reinstatement. After investigations, the employer discovered that Mr Camilleri had made 141 expense claims that were not approved or authorised.
The Commission came to this decision because they said that there was an excessive delay between the employee's behaviour and the time of the dismissal and that the employer failed to appropriately consider the employee's length of service and his offer to reimburse the employer for the expenses.
Not enough notice given to employee prior to dismissal
Dent v Halliburton Australia Pty Ltd  FWC 5692
In this case, the Commission found that the employee had been unfairly dismissed and awarded the employee 11 weeks’ wages.
The employee was on a first and final warning as a result of using a mobile phone while driving a company vehicle. He was subsequently claimed to have used a company vehicle while using a mobile phone and speeding.
The Commission found that while he was speeding and this would justify the termination of his employment, the employer did not give the employee enough notice prior to the disciplinary meeting and he was therefore denied a fair opportunity to respond to the allegations.
Dismissal reasonable due to employee falling asleep
Sclater v Transdev Harbour City Ferries Pty Ltd  FWC 7968
In this case, the Commission found that a ferry master who had fallen asleep during the time he was supposed to be operating a ferry, was validly terminated.
The employer was not held to have unfairly dismissed the employee because it was a critical part of the employee’s role to remain fully alert when on duty and his failure to do so (even though due to the consumption of health-related medication) meant that the employer had a valid right to terminate his employment.
How Can Prosper Law help?
Prosper Law is an online employment law firm. We have helped both employers and employees with their employment law matters.
Having worked on both sides of employment law, we are able to develop strategies to help resolve your employment law matter in the best way.
Contact a workplace lawyer today and ask for a fixed fee quote.
Farrah Motley | Legal Principal
PROSPER LAW - A Commercial Law Firm for Businesses
M: 0422 721 121
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