The legal and statutory provisions regarding unfair dismissal in Australia are complex and can incorporate matters of employment type, award and enterprise agreement coverage, time limits for claims, the provisions of the Fair Work Act 2009 and the Small Business Fair Dismissal Code.

At Maurice Blackburn, our experienced employment lawyers can assist and advise you on matters such as unfair dismissal applications, Fair Work Commission conferences and hearings, as well as claims for damages and compensation.

Dismissal can include a situation where you resigned but were forced to do so because of conduct, or a course of conduct, engaged in by your employer. This is commonly referred to as 'constructive dismissal'.


FAQs - your questions answered

A person is not considered to have been dismissed if they were employed under a contract for a specified period of time, specified task or for the duration of a specified season, and the employment was terminated at the end of the period, task or season. However, the Fair Work Act 2009 states that if a person was on a contract and the substantial purpose of the contract was to avoid obligations to not unfairly dismiss the employee then the employee is not precluded from making an unfair dismissal application.

An employee is not considered to be dismissed if they were on a training arrangement and the employment terminated at the end of the training arrangement.

A person is also not dismissed if they have been demoted unless the demotion involves a significant reduction in remuneration or duties.

The Fair Work Act provides that a person has, in effect, been dismissed if they resigned from their employment but were forced to do so because of conduct, or a course of conduct, engaged in by their employer.   This is commonly known as constructive dismissal.  The definition of “Conduct” includes both an act and a failure to act, and includes situations  where:

  • the employee is effectively instructed to resign by the employer in the face of a threatened or impending dismissal, or
  • the employee quits their job in response to conduct by the employer which gives them no reasonable choice but to resign.

An employee who is unable to make an unfair dismissal claim may be able to make an unlawful dismissal claim or a general protections claim.  The employee will need to decide whether to make an unfair dismissal claim or an unlawful dismissal or general protections claim.

An unlawful termination or general protections claim does not look at whether a dismissal was harsh, unjust or unreasonable. Instead it looks at whether the reason, or one of the reasons for termination, was unlawful. An employee has 21 days from the date of termination to take an unlawful termination or general protections claim.

Most employees who are employed by incorporated companies are considered national System Employees. In Victoria almost all employees are considered national System Employees. These employees are able to bring an unfair dismissal claim, provided they are not caught by one of the exclusions.

There are a number of exclusions that apply in respect of when a person can make an unfair dismissal application.

The following employees are excluded from bringing an unfair dismissal claim:

  • an employee who has been employed for less than 6 months unless the employer is a small business employer, in which case less than 12 months
  • employees whose dismissals are consistent with the Small Business Fair Dismissal Code ('the code') cannot bring an unfair dismissal claim, and
  • an employee who is genuinely made redundant cannot bring an unfair dismissal claim.
  • their employment is covered by a modern award
  • their employment is subject to an enterprise agreement, or
  • their rate of pay is less than an amount set out in the regulations ($129,300, as at 1 July 2013).

If the exclusions do not apply, the employee also needs to meet one of the following requirements:

  • their employment is covered by a modern award
  • their employment is subject to an enterprise agreement, or
  • their rate of pay is less than an amount set out in the regulations ($129,300, as at 1 July 2013).

For casual employees, their service does not count towards the 6 or 12 month qualifying period unless they were employed on a regular and systematic basis and had a reasonable expectation of continuing employment on a regular and systematic basis.

Small Business Fair Dismissal Code

A dismissal is consistent with the Small Business Fair Dismissal Code if two threshold requirements are met. Firstly, immediately before the dismissal or at the time of notice of dismissal (whichever happens first), the person's employer was a small business employer. Secondly, the employer complied with the code in relation to the dismissal.

The code initially requires the employer to identify:

  • the number of employees
  • whether the employee being dismissed has been employed as a permanent employee or a regular casual for more than 12 months, and
  • whether the employee is being dismissed due to redundancy or serious misconduct.

If the employee has been employed for over 12 months and has not been made redundant or dismissed for serious misconduct, then the employer is required to:

  • warn the employee
  • provide the employee with a reasonable amount of time to improve performance or conduct
  • give the employee a reasonable chance to rectify the problem, and
  • advise the employee of the reason for dismissal and give the employee an opportunity to respond.

A small business employer is defined as an employer that employs fewer than 15 people at the relevant time. This calculation is based on a simple head count. 

At the time of a worker's employment being terminated, the worker should be counted when determining the number of employees, as are any other employees who are terminated at the same time.

When considering whether a termination of employment was harsh, unjust or unreasonable, Fair Work Commission (FWC) will consider:

  • 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)
  • whether the person was notified of that reason
  • whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person
  • any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal
  • if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal
  • the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in dismissing the employee
  • the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal, and
  • any other matters that FWA considers relevant.

It is important to note that there is a 21-day time limit for making an unfair dismissal application. In limited circumstances, the time may be extended if the Fair Work Commission is satisfied that there are exceptional circumstances. This includes:

  • the reason for delay
  • whether the person first became aware of the dismissal after it had taken effect
  • any action taken by the person to dispute the dismissal
  • prejudice to the employer including prejudice caused by the delay
  • the merits of the application, and
  • fairness between the person and other people in a similar position.

Before dealing with the merits of the application, FWC is required to decide whether the application was made in time, whether the person has jurisdiction to make the application, whether the dismissal is consistent with the code (if the employer is a small business) and whether it was a case of genuine redundancy.

FWC must conduct a conference or hold a hearing in relation to the application if the matter involves disputed facts.

If FWC decides to hold a conference, it must, when considering the application take into account any difference in the circumstances of the parties. FWC must also take into account the wishes of the parties in the way it considers the application. FWC must not hold a hearing in a matter unless it considers it appropriate to do so, taking into account the views of the parties and whether a hearing would be the most effective and efficient way to resolve the matter.

If FWC finds that a dismissal is harsh unjust or unreasonable it may order that:

  • the employee be reinstated, or
  • the employee be awarded compensation not exceeding 26 weeks pay.

The Fair Work Act explicitly states that FWC cannot as part of any compensation include a component for shock, distress or humiliation, or other damages caused by the manner of the dismissal.

Costs are only awarded where FWC is satisfied that a party started an application or responded to an application vexatiously or without reasonable cause, or where it should have been apparent that the application or response had no reasonable prospects of success.