Five Tips to Avoid Unfair Dismissal

Every day, more than 40 unfair dismissal claims are lodged against Australian employers. Many of these costly claims could have been avoided if the employer had followed a proper performance management or disciplinary process for underperforming or misbehaving employees.

What is Unfair Dismissal?

A person is unfairly dismissed within the meaning of the Fair Work Act 2009 (Cth) if the dismissal was:

  • harsh, unjust or unreasonable;
  • not a genuine redundancy; and
  • not consistent with the Small Business Fair Dismissal Code (if the employer is a small business).

Remedies for Unfair Dismissal

The remedies available to employee for unfair dismissal may include:

  • reinstatement; or
  • compensation (capped at the lessor of 26 weeks’ pay or half the amount of the high income threshold).

Avoiding Unfair Dismissal

Although it is not possible to completely eliminate the risk of an unfair dismissal claim, there are some easy steps an employer can take to mitigate the risk of an unfair dismissal claim. Our tips for avoiding an unfair dismissal claim are as follows:

1) No Surprises

Notify the employee of the allegations against them (detailed and preferably in writing) prior to the performance management or disciplinary meeting and allow the employee to have a support person present at the performance management or disciplinary meeting.

2) Opportunity to Respond

The employer must provide the employee with an opportunity to respond to the allegations and must take the employee’s responses into account before any decision is made to terminate their employment.

3) Valid Reason

The employer must have a valid reason for dismissing the employee based on either performance or capacity. Employers should avoid on the spot dismissals as such knee-jerk reactions to an employee’s conduct may not be able justified or defensible should the employee bring an unfair dismissal claim.

4) Written Warnings

If any employee’s conduct or performance is unsatisfactory, it is important that the employee is given a written warning. The warning notice should confirm the allegations or issued discussed with the employee during the performance/disciplinary meeting, the employer’s future expectations of the employee and the potential consequences should the employee’s future conduct or performance be unsatisfactory.

5) Paper Trail

Keep detailed and complete records of all performance/conduct related discussions as a paper trail will assist the employer to establish that it has undertaken a proper and fair disciplinary and termination process.

Key Takeaway

Extreme care should be exercised before for terminating an employee for unsatisfactory performance or misconduct. You should get advice from a Vault Legal employment lawyer before making the decision to terminate.

To speak to an employer lawyer call Vault Legal today on 1300 002 210 or email us at


Key words: unfair dismissal, genuine redundancy, performance management, disciplinary process, compensation, reinstatement and termination.