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Are You Exposed to an Unfair Dismissal Claim by a Former Employee?


MBA has recently had an increased number of queries in relation to employee dismissal. Unfair dismissal may occur when an employer terminates the employment contract in an unjust or unreasonable way, or when an employee resigns as a result of something done (or not done) by the employer that forces the resignation.

Members are reminded of the risks of being exposed to unfair dismissal claims if procedural fairness is not provided to the employee. The risk of a former employee making an unfair dismissal claim is increased where it can be found that the termination of employment was harsh, unjust or unreasonable.

An employee can make a claim for unfair dismissal with the Fair Work Commission (FWC) within 21 days of the dismissal taking effect. The employer will be afforded the opportunity to respond to the claim made by the employee, either by objecting or responding to the facts of the claim, and the matter will be set down for a conciliation conference.  If the matter is not resolved between the parties at conciliation, the matter will progress to a conference or hearing.

What remedies a former employee can seek?

If the matter proceeds to a conference or hearing, the following remedies are available:

  • Reinstatement of employment
  • Compensation for lost wages (not more than 26 weeks’ pay).
  • If the matter settles at conciliation, the outcome might be whatever the parties agree.

I am a small business. Am I exempt from an unfair dismissal claim?

No, if you are a small business you are not exempt from an unfair dismissal claim being made against you.

However, the FWC does not have jurisdiction to deal with an unfair dismissal claim where the employee of a small business employer has less than one (1) year of service.  A small business employer is defined as an employer who employs fewer than 15 employees, including casual employees engaged on a regular and systematic basis.

For all other employers (i.e. those with 15 or more employees), an unfair dismissal claim can be made where the employee has completed six (6) months of service with the employer.

The best action that an employer can take is to ensure that when faced with terminating the employment of a worker, they do so in a reasonable and fair manner.

For further information about unfair dismissal or for assistance in responding to an unfair dismissal claim, reach out to the IR & Legal Team on (02) 6175 5900.