Unfair dismissal


The most common legal claim an employee will bring when their employment is terminated is a claim for unfair dismissal.

We regularly provide representation to businesses in unfair dismissal claims and have a great track record of settling claims early on in the proceedings and for minimal costs to the employer.

We also advise businesses on the steps they can take when terminating employment to minimise the risk of claims. Failure to provide employees with “procedural fairness” (notably the opportunity for an employee to respond to any conduct or performance issues in a formal meeting accompanied by a support person, before a final decision on termination is taken) often means that it will be difficult for an employer to defend an unfair dismissal claim, even if the employer appears to have strong grounds to dismiss.

Fair Work Act unfair dismissal claims

An unfair dismissal claim is brought under Part 3-2 of the Fair Work Act (Cth). In order to bring a claim, an employee must have completed a certain period of continuous service (12 months in a “small business employer”; 6 months in other businesses). The claim is available to full-time, part-time and certain casual employees.

The employee must earn less than the annually prescribed “high income threshold” unless their employment is covered by a modern award or enterprise agreement, in which case their level of earnings is irrelevant.

Unfair dismissal process

An unfair dismissal claim must be brought in the Fair Work Commission within 21 days of the dismissal. The grounds for unfair dismissal under unfair dismissal law are that the dismissal was “harsh, unjust or unreasonable”.

Usually the first step for an employer in the unfair dismissal process is to prepare a formal “response” document – which sets out their defence to the claim. The matter is then usually listed for a telephone conciliation – basically a mediation aimed at encouraging the employer and employee to agree to a settlement early on in the proceedings. If the matter does not settle at the conciliation it will then proceed to formal arbitration in the Fair Work Commission.

Our lawyers have a huge amount of experience in preparing employer response documents and representing employers in conciliations and hearings. Our approach is to robustly defend your claim, but to do it in the most cost effective way possible: it is usually inadvisable for an employer to spend excessive amounts on legal fees if this reduces the “pot” of money it has to pay to an employee to settle the claim.

If you have been served with notice of an unfair dismissal claim against your business, contact us today.

Remedies for unfair dismissal

If an employee’s claim is successful, the remedies for unfair dismissal are that the employee be reinstated in their former role, be paid compensation or both.

Unfair dismissal compensation

Unfair dismissal compensation is limited to half of the annually prescribed “high income threshold” or 6 months’ of the employee’s pay (whichever is lesser).

Small businesses & unfair dismissal

The Small Business Unfair Dismissal Code is a document made under unfair dismissal legislation which sets out a process that “small business employers” should follow when dismissing a member of staff.

If the employer follows the process in the Code then this provides an absolute defence to an unfair dismissal claim brought by an employee. It is vital that employers understand their obligations under the Code, if they wish to rely on it to defend a claim. Our lawyers can guide you through the requirements of the Code and the processes to follow to safely terminate the employment of a member of staff.

Contact Us

If you require any assistance regarding this matter, please contact us.

Keep in Touch


Sign up to receive newsletters from EI Legal and Employment Innovations, and to receive invitations to webinars and events