What is unfair dismissal under Fair Work?

Before asking "was it unfair?", ask "do I qualify?"

Unfair dismissal is a claim made to the Fair Work Commission under the Fair Work Act 2009. If the Commission finds that your dismissal was harsh, unjust or unreasonable, it can order your employer to give you your job back or pay you compensation.

But the Commission can only look at the fairness of what happened if two things are true first: you are a person who is protected from unfair dismissal, and you were actually "dismissed" in the legal sense. Most claims that fail early fail on one of those two points.

Who qualifies?

You need to tick all three of the boxes below.

1. You work for a Fair Work employer

The unfair dismissal laws cover anyone employed by a "national system employer". That is most employers in Australia, including virtually every private business and not-for-profit.

The main exception is state and local government. In New South Wales, state public servants and council employees are covered by the state industrial relations system instead, and have a separate pathway through the NSW Industrial Relations Commission.

2. You have been there long enough

You must have completed the minimum employment period by the time you were dismissed, or told you were being dismissed:

• 6 months, if your employer has 15 or more employees; or
• 12 months, if your employer is a small business with fewer than 15 employees.

The headcount includes regular casuals and staff of related companies, so a business that looks small is not always a "small business" for these purposes.

3. You earn under the high income threshold, or an award covers you

You must meet at least one of the following:

• your annual earnings are less than the high income threshold, which is $190,100 for dismissals on or after 1 July 2026 (it is indexed every 1 July); or
• you are covered by a modern award, or an enterprise agreement applies to you, in which case you are protected no matter how much you earn.

"Earnings" does not mean your whole package. Compulsory superannuation is left out, and so are bonuses, commissions and other payments that cannot be worked out in advance. Many people who think they earn too much to claim are in fact under the threshold once those amounts are taken out, or are covered by an award without realising it.

"Dismissal" can mean two things

You can only claim unfair dismissal if you were dismissed. The law recognises two ways that can happen.

1. Your employer ended your employment

This is the obvious one. You were terminated, or you were given notice that your employment was going to end. It does not matter whether you were told in a meeting, by letter, by email or by text message, or whether you were paid out in place of working your notice.

2. You resigned, but had no real choice

This is known as constructive dismissal, or forced resignation. On paper you resigned. In reality, your employer's conduct put you in a position that was untenable and left you with no choice but to leave.

Common examples include being told to resign or be sacked, serious bullying that the employer refuses to address, not being paid, or a significant cut to your pay, hours or role imposed without your agreement.

The bar is high. It is not enough that work had become unpleasant or that resigning seemed like the sensible option. You need to show that your employer's conduct forced the resignation. If you are thinking about resigning because of how you are being treated, get advice before you do it, not after.

What makes a dismissal unfair?

This is a much larger and more complex question, and the answer always depends on the facts. But it comes down to two things: your employer must have a valid reason to dismiss you, and it must follow a fair process in getting there.

A valid reason is one that is sound and defensible, and that relates to your conduct or your capacity to do the job. Without a valid reason, the dismissal is almost certainly unfair, provided you qualify.

In practice it is often easier to recognise an unfair dismissal than to define one. The same is true of a forced resignation, where you have been put in a position that makes you feel you have to resign.

What is a fair process?

Many people think there is a minimum number of warnings you must receive, or a minimum amount of time you must be given to improve. In reality, the law sets no mandatory minimum for either.

What the Commission looks at is whether you were treated fairly in substance, including:

• whether you were told the reason your job was at risk;
• whether you were given a real opportunity to respond before the decision was made;
• whether you were allowed a support person; and
• if the issue was performance, whether you were warned and given a chance to improve.

If the process was rushed, or the decision feels like it was made before you were ever asked for your side, then more likely than not the process was unfair.

When a dismissal is not an unfair dismissal

Even if you qualify, a claim will not succeed where:

• the dismissal was a genuine redundancy;
• your employer is a small business and it complied with the Small Business Fair Dismissal Code; or
• your employment simply ended at the close of a genuine fixed-term contract or a defined season or task.

If you do not qualify for unfair dismissal, that is not necessarily the end of the road. Other claims, such as a general protections claim, have no minimum employment period and no income cap.

What are the remedies?

A dismissal can feel like a permanent mark on your record. It does not need to be.

When a dismissal is challenged, the employee is usually seeking compensation for the loss suffered as a result. If the Commission finds the dismissal was unfair, it can order:

• compensation, capped by law at 26 weeks' pay (six months' salary), and never more than half the high income threshold, which is currently $95,050; or
• reinstatement to your job, with continuity of service and compensation for the wages you lost in the meantime.

Most often, though, the working relationship is permanently damaged and neither side wants to go back. The large majority of disputes are resolved by a private settlement agreement, usually reached at or soon after the Commission's conciliation conference, well before any hearing.

You have 21 days

An unfair dismissal application must be lodged with the Fair Work Commission within 21 days after the dismissal takes effect. Extensions are only granted in exceptional circumstances, and waiting to see whether things resolve themselves is not one of them.

This article is general information only and does not constitute legal advice. Every dismissal is different — speak with one of our employment lawyers about your specific circumstances.

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