Know Your Rights: Unfair Dismissal



Unfair Dismissal


Today we look at unfair dismissal under the NSW Industrial Relations Act 1996. Next week we will look at unfair dismissal under the Fair Work Act 2009.

Unfair Dismissal

"Unfair dismissal" is when you lose your job in a harsh, unjust or unreasonable manner.

Common scenarios where an employee may be unfairly dismissed include:

•        where there is no valid reason for the dismissal

•        where the employee was not informed of the reasons for their dismissal, or

•        where the employee was terminated for poor performance but was never warned that they were performing poorly.

It would also be illegal for you to lose your job because you:

  • were absent from work because you were sick or injured
  • were absent from work during maternity leave or other parental leave
  • are a union member or union representative
  • took court action against your employer
  • made a complaint about your employer
  • took industrial action.

A valid reason must exist for an employer to dismiss an employee. The reason(s) must be based on the employee’s poor performance, conduct or changes to the operational requirements of the workplace. The reason for dismissal must be sound, defensible and well founded and cannot be capricious, fanciful, spiteful or prejudiced.

For employees in NSW who come within the Industrial Relations Act 1996 (i.e. most ASMOF members), you may bring a claim of unfair dismissal if you believe the dismissal was harsh, unreasonable or unjust. Dismissal also includes threats to dismiss an employee.

These unfair dismissal laws are contained in Part 6 of the Industrial Relations Act 1996 (NSW).

Who is eligible to make a claim under the NSW Act?

•        NSW public sector employees and local government employees who are either covered by a state award or enterprise agreement. Again, most ASMOF members.

•        This may include:

                  →  some casual employees

                  →  employees who have been forced to resign

                  →  employees who have been dismissed while on workers compensation.

•       Employees who are award free can only apply if their annual remuneration is not above a threshold (currently $142 000).

You cannot bring an unfair dismissal claim if you are:

•        employed for a specific task or a specified period

•        a casual employee engaged on a casual basis for a short period

•        an apprentice or trainee

•        an independent contractor

•        serving a period of probation or qualifying period, or

•        covered by a federal award or enterprise agreement

How do you make an application?

A dismissed employee, or an employee threatened with dismissal, or the union can lodge an unfair dismissal application with the NSW Industrial Relations Commission. 

How quickly must the application be made?

An application must be made within 21 days of the dismissal. 

How is the application dealt with?

After an application has been lodged, there will be a conciliation conference.  The employee, the union and the employer will meet with a member of the Commission to try and resolve the matter without formal litigation, and without the need to expend substantial legal costs. Most matters resolve at conciliation.

If conciliation is unsuccessful, the application will proceed to an arbitration hearing.  This process is more formal. The parties will be required to file and exchange evidence. The Commission member will hear evidence from both parties and after hearing from both sides, the Commission will determine the claim either by dismissing it, or by making a legally enforceable order where it upholds the claim.

Where the Commission upholds a claim, it may order an employer to:

•        reinstate the employee to their former position

•        re-employ the employee in another position that the employer has available

•        provide back pay and other entitlements owing from the time of the dismissal, where reinstatement or re-employment is ordered

•        compensate the employee by ordering payment of an amount not exceeding the remuneration of the employee during the six months before the dismissal, where reinstatement or re-employment is considered impracticable

•        not dismiss the employee, where dismissal has been threatened.

Misconduct in NSW Health?

There is a NSW Health Policy Directive that must be followed by the employer when managing alleged misconduct by staff of the NSW Health Service. All allegations of misconduct must be subject to a full and extensive investigation.

If a dismissal is based upon alleged misconduct and the employer does not follow the Policy Directive and does not ensure that procedural fairness is adhered to then this would probably render the dismissal harsh or unjust or unreasonable.

What is Procedural fairness?

In an unfair dismissal matter, the Act requires the Commission to consider a number of factors in determining whether the dismissal was harsh, unjust or unreasonable.

Most of these factors would come under the general principle of ‘procedural fairness’.

In a nutshell, procedural farness is about the concept of fairness encapsulated in an old adage: justice should be done and be seen to be done.

For example, an employee must be made aware of allegations concerning their conduct to enable them to respond to them and defend themselves. And the opportunity to defend implies an opportunity that might result in the employer deciding not to terminate the employment if the defence was of substance.

Failure of an employer to apply procedural fairness before an employee’s dismissal will often result in a finding that the dismissal was unfair, resulting in either the reinstatement of the employee (when considered appropriate) or payment of compensation (up to the equivalent of six months’ pay).

However not all procedural defects, either singularly or in combination, will result in the Commission finding that a dismissal is harsh, unjust or unreasonable. The seriousness of proven misconduct may not necessarily be outweighed by any identified procedural faults.

What is constructive dismissal?

You may still have rights to bring a claim for unfair dismissal even if you resigned. This arises where a person, because of the conduct of their employer, is left with no other choice but to resign from their employment. This is called constructive dismissal. The most common example of constructive dismissal occurs where a person is told that unless they resign immediately, their employment will be terminated.

If you require any more information about termination of employment please contact us at

Back to Know Your Rights (main page)