Unfair Dismissal in Australia: Rights & Obligations Under the Fair Work Act 2009

Losing your job can be distressing, especially if you believe your dismissal was unjust, harsh, or not handled properly.

Under Australian law, employees are protected from unfair dismissal by the Fair Work Act 2009 (Cth). If you’ve recently been dismissed or terminated, you may have legal grounds to challenge it.

At Allen Law, we help employees and employers across Australia navigate termination and other workplace disputes, including unfair dismissal claims. In this article, we explain what constitutes an unfair dismissal, who is eligible to make a claim, the application process, and how we can help you.

What is unfair dismissal?

Under section 385 of the Fair Work Act, a dismissal is considered unfair if:

• The person has been dismissed, and
• The dismissal was harsh, unjust, or unreasonable, and
• The dismissal was not a case of genuine redundancy, and
• The dismissal was not consistent with the Small Business Fair Dismissal Code (if applicable).

Each of these elements must be assessed to determine whether a dismissal is unfair under the law.

If any element cannot be established, the person will be taken to have not been unfairly dismissed.

Understanding ‘harsh, unjust or unreasonable’

The Fair Work Commission (FWC) must take into account various matters when considering whether a dismissal was harsh, unjust or unreasonable. Some of these include:

• Whether there was a valid reason for the dismissal (e.g., poor performance, misconduct);
• Whether the employee was notified of the reason;
• Whether the employee was given a chance to respond;
• Whether the employee had a support person present at any discussion relating to the dismissal; and
• Any other matter the Fair Work Commission considers relevant.

In many cases, it’s not just what the employer did, but how they did it that determines whether the dismissal was unfair.

Who can make an unfair dismissal claim?

Not every dismissed worker is eligible to make a claim. You must meet certain jurisdictional requirements under the Fair Work Act.

Eligibility Criteria:

• You must be an employee (not an independent contractor);
• You must have completed the minimum employment period:
  • 6 months for large businesses (15 or more employees)
  • 12 months for small businesses (fewer than 15 employees)
• Your annual earnings must be less than the high-income threshold (as of 1 July 2025, this is $183,1,000, excluding super and bonuses), unless you are covered by a modern award or enterprise agreement
• You must lodge your application within 21 days after the dismissal has taken effect.

The time frame is strict, and accordingly, a failure to lodge an application will usually result in your application being objected to.

Despite this, you can make an application, seeking that your unfair dismissal application be accepted out of time.

What Is a genuine redundancy?

A dismissal is not unfair if it is a genuine redundancy. This means:

• The role is no longer required due to changes in operational requirements.
• The employer consulted with the employee in accordance with any applicable award or agreement.
• The employee could not reasonably be redeployed to another role.
• If your employer claims redundancy but still hires someone to do the same job, or fails to consult you, the dismissal may be challenged as unfair.

Small Business Fair Dismissal Code

If you work for a small business (fewer than 15 employees), the Small Business Fair Dismissal Code will apply to your dismissal. This code allows provides a small business with a degree of greater flexibility in relation to dismissals in cases of serious misconduct, such as theft, violence, or safety breaches, provided the employer ha reasonable grounds and acted promptly.

The code also provides a longer period in which an employee can be dismissed i.e., 12 months, as opposed to 6, which would generally prohibit an application being made if the dismissal occurred after a period of less than 12 months employment.

If the code is not followed, the dismissal may still be ruled unfair.

Common examples of unfair dismissal

• No valid reason given for dismissal;
• Termination without warning after a minor mistake;
• Termination during a period of leave;
• Retaliation for making a complaint, requesting flexible work, or exercising a workplace right (being more a general protections claim as opposed to unfair dismissal); or
• Forced resignation, where the employer created an intolerable work environment (constructive dismissal), which caused the employee to resign.

What compensation can you get for unfair dismissal?

If the Fair Work Commission finds that your dismissal was unfair, it may order:
Reinstatement to your former job;

• Compensation, capped at 26 weeks’ pay or half the high-income threshold;
• Back pay, if reinstated;
• Lost entitlements, such as notice pay or unused leave (in some cases).

Note: A remedy under the Fair Work Act 2009 is not automatic, it is discretionary. Accordingly, even though a finding of unfair dismissal occurs, a remedy may not automatically follow (although it usually will).

The unfair dismissal application process

Here’s a step-by-step guide to how unfair dismissal claims are handled:

1. Lodge the Application
You must file an application with the Fair Work Commission within 21 days after the dismissal took effect. This is a strict deadline.

2. Employer Response
The employer must respond within 7 days.

3. Conciliation Conference
Most cases are first referred to a conciliation conference: an informal phone mediation between you, the employer, and a conciliator from the Fair Work Commission. Many disputes are resolved at this stage.

4. Hearing or Conference
If conciliation fails, the case may proceed to a formal hearing or conference before a member of the Fair Work Commission.

5. Decision
The FWC will issue a binding decision based on the evidence, which may include reinstatement, compensation, or dismissal of the claim.

Legal Representation: Do You Need a Lawyer?

An employment lawyer can significantly improve your chances of success in employment disputes. At Allen Law, we:

• Help prepare strong, compelling applications
• Identify procedural and legal errors made by the employer
• Represent clients at conciliation and hearings
• Advise on realistic outcomes and negotiate settlements
• Help calculate lost earnings and entitlements
• We also advise employers on lawful terminations to minimise risk, ensure procedural fairness, and comply with workplace laws.

Alternatives to unfair dismissal claims

If you do not meet the criteria for an unfair dismissal claim, you may still have other options, including:

• General Protections claim (if you were dismissed for exercising a workplace right)
• Discrimination complaint under anti-discrimination laws
• Wrongful Dismissal (being a common law breach of contract).

Our lawyers will assess the best legal pathway based on your circumstances.

How Allen Law can help

At Allen Law, we act for both employees and employers across Australia in all aspects of employment law. If you believe you’ve been unfairly dismissed, or if you’re an employer defending a claim, or need advice on how to minimise risk of such a claim, our legal team offers:

• Fast, responsive advice
• Fixed-fee representation for unfair dismissal claims
• Representation at all stages of the FWC process
• Tailored legal strategies to protect your rights or business

Get in touch today

Phone:               (03) 7020 6563
Email:               enquiries@allenlawyers.com.au
Website:          www.allenlawyers.com.au

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Contact Allen Law for advice tailored to your situation, as laws may and do constantly, change.