Overview of unfair dismissal

From 26 August 2024, there will be a number of changes to workplace laws. Those changes will affect the information in this Benchbook.
Please refer to our Closing Loopholes – what’s changing page for more information.

This benchbook has been arranged to reflect the process users would follow when making an application for unfair dismissal.

Issues that may arise at a certain point during the process will be addressed as they come up. As a result, this benchbook may not deal with these issues in the same order as the Fair Work Act 2009.

On this page:

Unfair dismissal process under the Fair Work Act

Note: The diagram below sets out the unfair dismissal process as it applies to a majority of the matters that come before the Fair Work Commission. However each case is dealt with on its own merits and may include steps or processes different to those shown below.

overview_unfair_dismissal_png

Definition

See Fair Work Act s.385

Under the Fair Work Act a person has been unfairly dismissed, if the Fair Work Commission is satisfied that an employee (who is protected from unfair dismissal) has been dismissed and the dismissal:

  • was harsh, unjust or unreasonable, and
  • was not consistent with the Small Business Fair Dismissal Code[1] (in the case of employees of a small business), and
  • was not a case of genuine redundancy.

Related information

Purpose of unfair dismissal provisions

See Fair Work Act s.381

The objects of the unfair dismissal provisions are:

  • to establish a framework for dealing with unfair dismissal that balances the needs of business (including small business) and the needs of employees
  • to establish procedures which are quick, flexible and informal, and address the needs of employers and employees
  • to provide remedies where a dismissal is found to be unfair with an emphasis on reinstatement.

Fair go all round

The procedures and remedies (referred to in the second and third dot points above) and the manner of deciding and working out remedies are intended to ensure that a 'fair go all round' is accorded to the employee and employer concerned.[2]

This section of the Fair Work Act enshrines the principle established in re Loty and Holloway v Australian Workers’ Union.[3]

When is a person protected from unfair dismissal?

An employee of a national system employer (called a national system employee) who has been dismissed is protected from unfair dismissal and eligible to make an application for unfair dismissal remedy if:

  • they have completed the minimum period of employment

AND

  • they earn less than the high income threshold (which is currently $175,000[4] per year), or
  • a modern award covers their employment, or
  • an enterprise agreement applies to their employment.

It is not an unfair dismissal if the dismissal was:

  • a genuine redundancy, or
  • consistent with the Small Business Fair Dismissal Code (in the case of employees of small business).

Related information

Time limit for making an application

An unfair dismissal application must be lodged with the Commission within 21 days after the dismissal takes effect.

The Commission may only allow a further period for lodgment in exceptional circumstances.

Related information

References

[1] See for example TIOBE Pty Ltd T/A TIOBE v Chen [2018] FWCFB 5726 (Ross J, Clancy DP, Lee C, 12 September 2018).

[2] Fair Work Act s.381(2).

[3] Re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95 (23 March 1971).

[4] The high income threshold for the period 1 July 2023 to 30 June 2024 was $167,500.

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