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‹ HR Glossary

Unfair dismissal

Fair Work and entitlements
What is unfair dismissal?

Unfair dismissal is a dismissal that the 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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Related terms

General protectionsProbation periodNotice periodRedundancy payAll terms ›
Where Compono fits

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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.

General guidance, not legal advice. Entitlements depend on the applicable award, agreement and jurisdiction. Rules and figures current as at July 2026 and reviewed annually.