Employment Termination & Unfair Dismissal

Deciding to dismiss an employee can be a tough time for everyone involved. There are many pitfalls and consequential headaches that can be avoided by seeking advice at an early stage.


It is critical, before taking any steps to dismiss an employee, that you ask the following questions:

  • Why do you want to dismiss this employee?
  • Do you have appropriate grounds for dismissing the employee?
  • Are there any risks to you as the employer should you proceed with the dismissal?
  • Do you know the procedural requirements for managing a dismissal?

Unfair dismissal

Unfair dismissal is a commonly used action which can be taken by an employee if their employment has been ended harshly, unjustly and unreasonably. There are a number of unfair dismissal claims which we will explain in more detail:

  • Constructive Dismissal
  • Summary Dismissal
  • Redundancy
  • Bullying
  • Discrimination.

Constructive Dismissal

A constructive dismissal can lead to an unfair dismissal claim even though the employee has resigned and not actually been dismissed. This happens when the employee is given little or no alternative but to resign. Effectively, the employer has contrived a situation which becomes intolerable or unacceptable to the employee. Resignation under such circumstances can be deemed an unfair dismissal.

Summary Dismissal

Summary dismissal occurs without any notice or payment in lieu of notice when the employee has been involved in serious misconduct in the workplace such that it is unreasonable for employment to continue.

Examples of misconduct include:

  • Theft;
  • Assault;
  • Sexual harassment;
  • Violence or threat of violence;
  • Refusal to follow lawful and reasonable direction;
  • Conduct endangering others or harming the employer’s reputation;
  • Intoxication at work;

among other such serious matters. In such circumstances, the process of dismissal must still be handled carefully in order to help prevent any unfair dismissal claim.


Genuine redundancy means that an employee’s position is no longer needed to be filled by anyone else. If employment ceases because of a genuine redundancy, a redundancy payment might then be made.  The Fair Work Ombudsman has a useful tool which can be used to calculate a redundancy payment. However, if the redundancy is not genuinely caused by business operational reasons, the dismissal could be unfair. See the article written by our Employment Lawyers entitled Redundancy: The Basics.

An unfair dismissal claim can still be made in a genuine case of redundancy if the process is poorly handled. The exit process for redundancy must be carefully undertaken to ensure procedural fairness in selecting an employee for redundancy. This involves considering whether there are suitable alternative positions, offering outplacement support, and the like before deeming them to be redundant.

When is a redundancy payment not required?

Payment for redundancy is not always necessary. Typical instances when a redundancy payment is not required includes:

  • Most ‘small business’ employers (under 15 employees);
  • If employment has been for less than 12 months; or
  • If employment is casual.


In instances of bullying which result in dismissal from employment or in an employee’s forced resignation, the employee, whether bully or victim, may well have a claim against the employer for unfair dismissal or for adverse action.


In instances of discrimination which results in dismissal from employment or in an employee’s forced resignation, the employee, whether victim or perpetrator, may well have a claim against the employer for unfair dismissal, adverse action, or a claim under equal opportunity laws.

Notice Period for Unfair Dismissal

The employee has 21 days to apply to the Fair Work Commission for compensation or reinstatement. The employer has seven (7) days to respond after being served with the application.

Unfair Dismissal for Employers

A small business employer (i.e. under 15 employees) might better resist a claim for unfair dismissal if they follow the Small Business Fair Dismissal Code.

Can we assist you with issues relating to termination of employment?

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