How Should My Business Deal With Unfair Dismissal Claims?

COVID-19 has caused an unprecedented shock to global business. Many businesses have managed to cope through significant downsizing. Large-scale employee termination, has been an unfortunate but necessary consequence of this time. As such, unfair dismissal claims have also gone up. Prepare yourself against such claims with 3 easy steps.

Prevention Is Better Than Cure

You can avoid unfair dismissal claims by making these considerations prior to employment.

  • Have clear termination provisions in your employment contract.
  • Explicitly outline conduct which would lead to termination.
  • Ensure an agreed period of notice for termination.

Proceeding With Termination

Before terminating be sure to:

  • Ensure your termination is lawful and valid.
  • Comply with relevant documents, dates and final payments.
  • Have your termination down in writing with the reason provided.

Subjective opinions are not effective for termination. Make sure you have objective evidence or findings from a formal investigation to back up your claim. In addition, remain calm and reasonable during any termination proceeding. Allow employees to bring a support person during this time.

The COVID-19 context in particular has seen a lot of termination for redundancy. If you are to make a an employee redundant, confirm that it is a genuine redundancy as defined by section 389 of the Fair Work Act:

  1.  A person’s dismissal was a case of genuine redundancy if:
    1. the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
    2. the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
  2. A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
    1. the employer’s enterprise; or
    2. the enterprise of an associated entity of the employer.

Notably, small businesses may have relaxed procedures when it comes to what defines unfair dismissal. For instance, small business employees cannot make a claim for unfair dismissal within 12 months (usually 6) of their employment. A checklist for the Small Business Dismissal Code can be found here.

Seek Advice on Unfair Dismissal

The Fair Work Commission tends to have pretty quick timelines when it comes to unfair dismissal claims. These claims have to be lodged within 21 days of termination. Once you are served a copy of the claim, you must lodge a response containing any jurisdictional objection within 7 days.

A conciliation date will be given which generally occurs 3 weeks after the claim is made. Importantly, you also need to prepare information for the conciliator. This includes the employment contract, letter of termination and/or formal warnings. You can usually do conciliation through telephone.

Where conciliation fails, the matter will go to a formal hearing where the outcome will be decided by the member of the Fair Work Commission.

This process is often complex and difficult to navigate. A wrongful termination lawyer is the first and best option to go to for up-to-date information about your rights and responsibilties.

Prepare to Negotiate or Settle

Most conciliatory meetings come to settlement. Settlement remedies range from compensation and reinstatement to even an apology. In addition, conciliatory meetings usually involve a confidentiality agreement – be sure not to talk to other potential employers about the agreement.


It can be difficult to dismiss a long-term employee, particularly for arbitrary reasons such as COVID. Make sure you work through the process with prudence and advice in order to avoid an unfair dismissal claim. Where those claims eventuate – get advice, evaluate your legal obligations and try come to a workable agreement. Where you run into trouble, be sure to seek legal advice.

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