What is unfair dismissal?

Unfair dismissal is a legal claim available to most Australian employees who are sacked from their job in a way that is harsh, unjust, or unreasonable. The right is set out in Part 3-2 of the Fair Work Act 2009 and is administered by the Fair Work Commission. To bring a claim, an employee must have completed the minimum employment period: six months for employees of larger businesses or twelve months for employees of small businesses (those with fewer than 15 employees).

An employee who believes they have been unfairly dismissed must lodge an application with the Fair Work Commission within 21 calendar days of the dismissal taking effect. The filing fee is currently 87.20 dollars (2024-25), with waivers available in cases of financial hardship. The Commission usually arranges a conciliation conference, conducted by phone or in person, where a member or staff conciliator helps the parties try to resolve the dispute by agreement. About 80 per cent of unfair dismissal applications settle at conciliation.

If conciliation does not resolve the matter, the case proceeds to a hearing before a Commission member, who considers whether there was a valid reason for the dismissal, whether the employee was notified of the reason, whether they had a chance to respond, and whether the dismissal was procedurally fair. Small business employers are also covered by the Small Business Fair Dismissal Code, which sets out the minimum process required.

Remedies available if a dismissal is found unfair are reinstatement to the former position (the primary remedy under the Act) or compensation in lieu, capped at six months' pay or half the high-income threshold (about 84,300 dollars in 2024-25), whichever is lower. Employees whose income exceeds the high-income threshold (about 168,600 dollars in 2024-25) generally cannot bring an unfair dismissal claim unless they are covered by an award or enterprise agreement. The Fair Work Ombudsman publishes detailed guidance on the process at fairwork.gov.au.