What Constitutes an Unfair Dismissal

Criteria That constitutes an Unfair Dismissal

For employers and employees alike, issues surrounding termination of employment can be tense, fraught, and difficult to navigate in a variety of different ways.

But what are the exact criteria that constitute an Unfair Dismissal, and that can lead to these sorts of complications?

Broad Criteria for Unfair Dismissal

First and foremost, it’s important to be aware that any termination of employment will be subject to Commonwealth workplace laws and standards overseen by The Fair Work Ombudsman and the Fair Work Commission.

These rules detail what entitlements an employee is owed at the end of their employment, in addition to the procedure that must be followed when an employee leaves the job due to a position becoming redundant.

The broad criteria that may lead to the Fair Work Commission judging an employee to have been unfairly dismissed include:

  • An employee can establish that dismissal was harsh, unjust or unreasonable in manner
  • The redundancy of an employee was actually a dismissal and not a genuine redundancy
  • The Employer was a ‘Small Business Employer’ (fewer than 15 employees), and the dismissal was not in line with the Small Business Fair Dismissal Code

What Constitutes Harsh, Unreasonable, or Unfair Dismissal?

When determining if a dismissal was harsh, unreasonable, or unfair, the Fair Work Commission will consider the following, in addition to anything else they deem relevant:

  • Did the employee’s capacity or conduct provide a valid reason for dismissal?
  • Was the situation one in which the employee should firstly have been notified of the
    problem with their performance or conduct, and given a chance to address it?
  • At discussions about dismissal, did the employer prevent the employee from having a
    support person present? Was this unreasonable?
  • Did the size of the business or a lack of HR personnel impact the choices and
    procedures that led to the dismissal?

Quick Reference Factsheet

In general, employees of incorporated companies can bring Unfair Dismissal Claims as long

  • They have been employed for more than six months (or 1 year in the case of small businesses)
  • The terms of the dismissal are inconsistent with the Small Business Fair Dismissal Code
  • The employment in question is covered by a Modern Award or else is subject to an enterprise agreement
  • If an employee is not covered by a modern award, or if an enterprise agreement does not apply to them, they must have an annual rate of earnings of less than the high income threshold. The high income threshold is currently $153,600.
  • The termination is not due to a genuine redundancy.

Timeframe for Unfair Dismissal Applications

The timeframe within which an unfair dismissal application can be made by an employee is currently set at 21 days, and that period can only be extended in very rare circumstances.


In cases where an employee qualifies for an Unfair Dismissal Claim under the Fair Work Act, the case will be dealt with by Fair Work Australia, who will begin by conducting an informal private and confidential conciliation to try and resolve the matter via reaching a mutual agreement.

At Maguire & McInerney we have acted both for Employers and for Employees, and we regularly assist our clients in all aspects of employment law.

If you are an employer or an employee looking for a confidential discussion , please contact the team at Maguire & McInerney Lawyers on 02-4228 5911.