The prospect of an unfair dismissal claim often weighs heavily on an employer’s mind when he or she needs to decide the fate of an employee.

The factors that the Fair Work Commission would consider were claim to go to arbitration can be helpful.


Valid reason

There must be a sound, defensible and well-founded reason for dismissing an employee.  A reason that is capricious, fanciful, spiteful or prejudiced can never be a valid reason.  The reason must be objectively true – usually it won’t be enough for the employer to say they thought the reason was true.

Examples of valid reasons include failure to perform to clear and reasonable standards, an inability to perform the work the employee was hired to do, consistent lateness or misconduct.  Sometimes there is a valid reason that justifies summary dismissal, such as failure to follow a lawful and reasonable direction, or theft.


Notification of reason

It is shocking how many employees make an unfair dismissal claim largely because they don’t really know why they have been dismissed.  They may have been aware that they have been performance managed, but they don’t know what they needed to change, because their employer has not given them specific and concrete examples of the poor performance.

Be as specific as possible when you dismiss an employee, and provide the employee with a clear explanation for the action you have taken.  As the National Employment Standards require notice of termination to be given to an employee in writing, you would also include a reason for the dismissal in the dismissal letter or email.


Opportunity to respond to allegations

This is where the process of natural justice becomes important.  In my last article, I talked about making sure the employee knows exactly what any disciplinary meeting will be about.  You also need to give the employee time to respond.  This may mean adjourning the meeting and reconvening the next day, or giving the employee the opportunity to respond in writing.

Being asked to defend against allegations that could lead to dismissal can be very stressful for an employee, making it difficult for them to respond rationally or appropriately.  Be sure you don’t rush the process unnecessarily.


Whether or not warnings have been given

If the problem is the employee’s performance, you may be required to demonstrate that the employee was warned.  The easiest way to do this is with (a) written warning(s).

There is no requirement in the Fair Work Act 2009 to give three warnings.  You may have a written policy or procedure that specifies a certain number of warnings, but the Act only requires that the employee has been warned.  The appropriate number of warnings will depend on many factors, such as age, length of service and any written commitments you have made about procedure.

Warnings must contain three elements to be effective:

  1. A clear and accurate description of the behaviour or performance that is a problem. For example: on Monday, Wednesday and Thursday last week you were 20 minutes late for work without good reason.
  2. Guidance on the standard of behaviour or performance that is expected in the future. For example: we expect you to be at your workstation, ready to start work, at 7:30am Monday to Friday.
  3. Unambiguous description of the consequences of future misbehaviour or poor performance – this is no time to be coy, be polite but blunt. For example: If you are late for work again without good cause, your employment will be terminated (if that is your intention).


Other factors the Commission will consider

The following will also need to be addressed during any arbitration:

  • Whether you allowed the employee to have a support person present during any meeting that may lead to dismissal;
  • Whether the size of the employer’s business, or the presence or otherwise of human resources specialists, impacted on the dismissal; and
  • Any other matter the Commission considers relevant.

When it comes to making a decision about a particular employee, you would think about some key questions:

  • Am I treating this employee consistently compared to other employees who have shown similar problems? Or if I am treating the employee differently, is there a good reason for that?
  • Does this employee have a history of long service that should be taken into account?
  • Is the employee contrite and/or remorseful?
  • Has this employee had any previous warnings?

*Note that warnings have a tendency to “go stale” after a period of time – ranging from six months to a couple of years, depending on the severity of the problem. Relying on a stale warning to dismiss an employee could mean the dismissal is unfair.

Lastly, there are a number of matters that generally must not affect your decision about whether or not to dismiss an employee, including:

  • Temporary absence due to illness or injury, which is defined as up to three months off work on personal/carer’s leave, at least part of which should be unpaid;
  • The employee’s workers’ compensation history;
  • Discriminatory reasons such as pregnancy, sex, union membership, disability.


There is a wealth of further guidance in the Unfair Dismissal Benchbook at