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HR Glossary

Unfair dismissal

Australia · Fair Work and entitlements
What is unfair dismissal?

Unfair dismissal is a dismissal that Australia's Fair Work Commission finds harsh, unjust or unreasonable, where the employee was eligible to claim and the dismissal was not a genuine redundancy. Claims must be lodged within 21 days of the dismissal taking effect.

Unfair dismissal at a glance

Qualifying service6 months (12 in a small business)
Lodgement window21 days from dismissal taking effect
Test appliedHarsh, unjust or unreasonable
Compensation cap26 weeks' pay (subject to the statutory cap)
Small business defenceThe Small Business Fair Dismissal Code

Who can claim unfair dismissal?

An employee who has served the minimum employment period (six months, or twelve in a small business) and is either covered by an award or agreement or earns below the high-income threshold, which is indexed each July. Casuals qualify if their employment was regular and systematic with a reasonable expectation of continuing work. The 21-day lodgement window is short and strictly applied.

What makes a dismissal unfair?

The Commission weighs whether there was a valid reason related to capacity or conduct, whether the employee was notified of it and given a chance to respond, whether warnings preceded performance-based dismissal, and the overall proportionality of the outcome. A valid reason executed through a hollow process can still be unfair; process failures sink more cases than substance does.

What protects small business?

The Small Business Fair Dismissal Code. A small business employer that follows the Code, including its summary dismissal provisions for serious misconduct, has a defence to an unfair dismissal claim. Following it means actually following it at the time, with evidence, not citing it afterwards.

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General protections

General protections are the provisions of the Fair Work Act (Australia) that make it unlawful to take adverse action against a person because they have, use or propose to use a workplace right, or because of attributes such as union membership or a protected personal characteristic.

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Probation period

A probation period is a contractual trial period at the start of employment, commonly three to six months, used to assess whether a new hire suits the role.

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Notice period

A notice period is the time between telling an employee (or employer) that employment will end and the final day of work.

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Redundancy pay

Redundancy pay is the severance payment Australia's National Employment Standards require when an employee's job is made genuinely redundant, scaled from 4 up to 16 weeks' base pay by years of continuous service.

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Every definition, with the local rules, rates and thresholds attached.

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Where
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Compono Hire is an applicant tracking system (ATS) that measures fit before you make the offer, alongside the process every ATS runs.

Defensible dismissals start with defensible hiring and management records.

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Common questions

What remedies can the Commission order?

Reinstatement is the primary remedy, though compensation capped at 26 weeks' pay is the more common outcome. There is no compensation for hurt or distress in unfair dismissal.

Is a genuine redundancy safe from unfair dismissal?

Yes, if it is genuine: the role is no longer required, consultation obligations under the award or agreement were met, and redeployment was considered. Miss those elements and the redundancy defence falls away.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with the Fair Work Ombudsman (fairwork.gov.au) or your own adviser. Last reviewed July 2026.