Unfair dismissal: who can claim, what is unfair, and the remedies

Who can claim

Unfair dismissal laws exist to give a fair go all round: a worker who loses a job can ask an independent tribunal to look at it, and the employer's reasons and circumstances are weighed too. In the national system the claim is made to the Fair Work Commission under the Fair Work Act 2009 (Cth).

Most private sector workers in Western Australia are in the national system because their employer is a company. If you work for a sole trader, a partnership, a WA government agency or (since 1 January 2023) a WA local government, you are probably in the WA state system and your claim goes to the WA Industrial Relations Commission instead.

To be eligible in the national system you must have been an employee rather than a genuine contractor, judged by the real substance of the working relationship (s 15AA). You must have served the minimum employment period: six months, or 12 months if your employer had fewer than 15 employees (s 383). And you must either be covered by a modern award or enterprise agreement, or earn less than the high income threshold, which is $190,100 for dismissals from 1 July 2026.

Were you dismissed?

A claim needs a dismissal. Under s 386 that means your employment ended on your employer's initiative, or you resigned because your employer's conduct, or a course of conduct, forced you to. A resignation you chose freely is not a dismissal.

A genuine redundancy is not an unfair dismissal (s 389). It is genuine only if the employer no longer needed your job to be done by anyone because of operational changes, met any duty to consult under an award or agreement, and could not reasonably have redeployed you within the business or an associated entity.

What makes a dismissal unfair

The question is whether the dismissal was harsh, unjust or unreasonable. Section 387 lists what the Commission must consider: whether there was a valid reason related to your capacity or conduct, whether you were told the reason and given a chance to respond, any unreasonable refusal to let you have a support person, any warning about unsatisfactory performance, the size of the business and its access to human resources staff, and any other relevant matter.

A valid reason is one that is "sound, defensible or well founded" (Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333). Where misconduct is alleged, the Commission decides for itself whether it happened; an employer's suspicion is not enough. Even proven misconduct may not justify dismissal if the response was out of proportion.

The cases show both sides. In Stutsel v Linfox Australia Pty Ltd [2011] FWA 8444, a long-serving truck driver dismissed over comments about managers on his Facebook page was found to have been unfairly dismissed and was reinstated, and a Full Bench dismissed the employer's appeal (Linfox Australia Pty Ltd v Stutsel [2012] FWAFB 7097). By contrast, in Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB 1166 a Full Bench overturned an order reinstating a worker dismissed for a safety breach and dismissed his claim.

If your employer had fewer than 15 employees, the dismissal is not unfair if the employer followed the Small Business Fair Dismissal Code (s 388).

Reinstatement or compensation

If the dismissal was unfair, reinstatement is the primary remedy: you go back to your old job, or another on terms no less favourable, and the Commission can order that you be paid for the time lost (s 391). The Commission orders compensation instead only if it is satisfied that reinstatement is inappropriate and compensation is appropriate (s 390).

Reinstatement may be inappropriate where the working relationship cannot realistically be restored, for example where there is a soundly based loss of trust and confidence, or where the worker can no longer do the job. The fact that the parties have been in dispute is not, on its own, a reason to refuse it.

Compensation is capped at the lesser of 26 weeks' pay and half the high income threshold, which is $95,050 for dismissals from 1 July 2026. It is not paid for shock, distress or humiliation (s 392(4)).

What this means for you

If you think your dismissal was unfair, write down what happened while it is fresh and keep your letters, messages and payslips. If you are not eligible for unfair dismissal, for example because you earn above the threshold, a general protections claim may still be open if you were dismissed for a prohibited reason such as making a complaint or taking sick leave.

Time limits are short: 21 days from the dismissal for a Fair Work claim, and 28 days in the WA state system. It is worth getting advice early.