Unfair Dismissal in Australia: How to Know If You Have a Case

Under the Fair Work Act 2009, a dismissal is unfair if it's harsh, unjust, or unreasonable, and it's not a case of genuine redundancy, and it doesn't comply with the Small Business Fair Dismissal Code (for small business employers). The Fair Work Commission considers several factors when determining whether a dismissal is unfair: whether there was a valid reason for the dismissal related to the employee's capacity or conduct, whether the employee was notified of the reason and given an opportunity to respond, whether the employee was allowed a support person during discussions, whether the employer had previously warned the employee about unsatisfactory performance, the size of the employer's business and the impact on procedures, and any other matters the FWC considers relevant.

Not every dismissed employee can make an unfair dismissal claim. You must have completed the minimum employment period: 6 months for employees of businesses with 15 or more employees, or 12 months for employees of small businesses (fewer than 15 employees). This period runs from the day you started with the employer.

The employee count includes all employees of the business and any associated entities, including regular and systematic casuals. Casual employees can make unfair dismissal claims, but only if they were employed on a regular and systematic basis and had a reasonable expectation of continuing employment.

Employees on probation can also claim unfair dismissal, provided they've passed the minimum employment period — probation periods do not override the statutory right.

Employees who earn above the high income threshold and aren't covered by a Modern Award or enterprise agreement cannot make an unfair dismissal claim. For 2025-26, the high income threshold is $183,100 per year (indexed annually on 1 July). This figure represents total annual earnings, including wages, salary, any amounts dealt with on the employee's behalf (such as salary-sacrificed super above the SG rate), the agreed monetary value of non-monetary benefits, and any other amounts that could reasonably be regarded as earned.

It doesn't include compulsory employer super contributions at the SG rate, or reimbursement of expenses. If you earn above this amount but are covered by an award or enterprise agreement, you can still make an unfair dismissal claim regardless of your income level.

You must lodge an unfair dismissal application with the Fair Work Commission within 21 calendar days of the dismissal taking effect. This is a strict deadline and the FWC will only grant an extension in exceptional circumstances. The dismissal takes effect on the date the termination is effective — if you are given notice and work through it, it's the last day of the notice period; if you're paid in lieu of notice, it's the date you stop working.

The application is lodged online through the FWC website. The current filing fee is $87.20 (indexed annually).

The FWC may waive the fee in cases of serious financial hardship. Don't delay — if you're considering a claim, seek advice immediately. Free initial advice is available from the Fair Work Commission's Workplace Advice Service.

If the Fair Work Commission finds that a dismissal was unfair, it can order two types of remedies. Reinstatement is the primary remedy — the FWC can order the employer to re-employ the person in their former position (or a comparable one) and restore their continuity of service and lost pay. In practice, reinstatement is ordered in a minority of cases because the employment relationship has usually broken down.

Compensation is the alternative remedy, capped at 26 weeks' pay (based on the employee's base rate of pay at the time of dismissal, excluding penalties and overtime) or half the high income threshold ($91,550 for 2025-26), whichever is lower. The FWC considers the employee's length of service, income, efforts to mitigate loss, and any misconduct by the employee when determining the amount.

Unfair dismissal isn't the only avenue for challenging a termination. Under the general protections provisions (Part 3-1 of the Fair Work Act), it is unlawful for an employer to take adverse action against an employee because they've exercised or proposed to exercise a workplace right (such as making a complaint, taking leave, or requesting flexible arrangements), or because of a protected attribute (such as race, sex, disability, age, religion, or union membership). General protections claims have some advantages: there is no minimum employment period, no high income threshold, and compensation isn't capped.

However, they require proof of a prohibited reason, whereas unfair dismissal requires only that the dismissal was harsh, unjust, or unreasonable. The 21-day filing deadline applies to both.

An employee can't pursue both claims for the same dismissal.

Several types of termination are excluded from unfair dismissal claims. A genuine redundancy — where the employer no longer requires anyone to do the job, has followed consultation obligations, and couldn't reasonably redeploy the employee — can't be the subject of an unfair dismissal claim. Termination for serious misconduct (theft, fraud, assault, intoxication at work, refusal of a lawful and reasonable instruction causing serious risk) allows summary dismissal without notice, though the employee can still argue the alleged misconduct did not occur or didn't warrant dismissal.

Completion of a fixed-term contract, seasonal employment ending, or a demotion that does not involve a significant reduction in duties or remuneration are also not considered dismissals for the purpose of unfair dismissal. Workers on visas tied to employer sponsorship face additional complexities.