How to Handle an Unfair Dismissal Claim

An unfair dismissal claim is one of those events that feels like an emergency because it arrives with a deadline and a form from the Fair Work Commission. It's more manageable than it looks if you understand what's actually being asked and respond methodically. Here's how the process works and what to do from the moment a claim lands.

What an unfair dismissal claim actually is

Under the Fair Work system, an eligible employee who believes their dismissal was harsh, unjust or unreasonable can lodge a claim with the Fair Work Commission within a strict short time limit after the dismissal takes effect. Not every worker is eligible — there are conditions around length of service (a minimum employment period, which differs for small business), income thresholds for award- and agreement-free employees, and whether the person was genuinely an employee. The Commission looks at both the reason for the dismissal and the fairness of the process you followed. That second part — process — is where employers most often come unstuck, because a valid reason handled badly can still be found unfair.

When the claim arrives, act on the clock

The first thing to check is the deadline for your response, which is short. Missing it can mean the matter proceeds without your side properly heard. Read the application to understand exactly what the employee is alleging, then pull together your evidence while it's fresh: the employment records, any warnings or performance discussions, relevant emails and file notes, the employee's contract, and any policies that applied. Do not alter or backfill records — reconstructing documents after the fact is both obvious and damaging. Work with what genuinely existed at the time.

Understand the Small Business Fair Dismissal Code

If you're a small business employer, there's a specific Fair Dismissal Code that can protect you — a dismissal consistent with the Code is deemed not unfair. It sets out what's expected, including grounds for summary dismissal in serious cases and a fair process (warning the employee, giving them a chance to respond and to improve, and allowing a support person) for other dismissals. If you followed the Code and can show it, that's a strong position. If you didn't know the Code existed at the time of the dismissal, that tells you something about the process for next time. Check the current Code on the Fair Work Ombudsman site.

The conciliation conference

Most unfair dismissal claims don't end in a hearing — they go first to conciliation, a confidential, without-prejudice phone conference run by a Commission conciliator who helps both sides explore a resolution. This is not a trial; nobody is deciding who's right that day. Go in having thought about two things: the strength of your position (was there a valid reason, and did you follow a fair process?) and your appetite for the cost, time and distraction of proceeding to a formal hearing if it doesn't settle. Many matters resolve here, sometimes with a modest settlement or an agreed statement of service, because both sides prefer certainty to a gamble. Approach it commercially, not emotionally.

If it doesn't settle

If conciliation fails, the matter can proceed to a formal determination where the Commission weighs the evidence and can order remedies — reinstatement, or compensation capped by law. This is the point to seriously consider professional representation from an employment lawyer or a workplace relations adviser, because the stakes and the procedural requirements rise. Be honest with your adviser about the weaknesses in your case, not just the strengths; they can only defend the position you actually have.

Prevent the next one

The best defence is built long before any claim. Clear position descriptions, documented performance conversations, a genuine warning process before dismissal, and file notes made at the time turn a "his word against mine" dispute into a documented one. Most unfair dismissal findings against employers come down to process failures — no warning, no chance to respond, a decision made in a moment of frustration — not the absence of a real problem with the employee. Getting your people processes right, and keeping the records to prove it, is what makes the occasional difficult exit defensible.

This is general information, not legal advice. Unfair dismissal eligibility, time limits and remedies are governed by the Fair Work Act and administered by the Fair Work Commission — confirm the current requirements and get advice specific to your situation before you respond to a claim.