Which employees are eligible to claim an unfair dismissal?

How to know if your employees are eligible to claim an unfair dismissal?

There are a number of factors that determine an employee’s eligibility to make an unfair dismissal claim. Just because an employee may feel as if they’ve been wronged, doesn’t necessarily mean that they are eligible to make an unfair dismissal claim.

When can an employee claim unfair dismissal?

An employee can claim unfair dismissal when they’ve been dismissed in a harsh, unjust, or unreasonable manner, and also meet the eligibility requirements.

Firstly, an employee must have been employed, and worked in a regular and systematic manner, for the minimum period of employment, which depends on the size of the business. If the employee was dismissed from a small business (a business that employs less than 15 people) the minimum employment period is 12 months, however, if it was a larger business, then the period is 6 months. It should be noted that even if an employee has not met the minimum employment period, they might still visit the Fair Work Commission website and lodge an unfair dismissal claim. The lack of the required minimum employment which contributes to their ineligibility to make such a claim must then be raised by the respondent (in most cases, the employer) as a jurisdictional objection.

An important factor in an employee’s eligibility to pursue an unfair dismissal claim is ensuring that the unfair dismissal claim application is submitted to the Fair Work Commission in the set timeframe. From the date on which the dismissal takes effect, the employee then has 21 days to submit their claim. If they fail to do so, the respondent may be able to raise a jurisdictional objection stating that the employee has raised the application outside the required timeframe. In a limited number of cases, employees may be able to continue with an application even if it was submitted outside the 21-day window. However, these circumstances are relatively rare and require evidence to demonstrate why the employee was unable to complete the application in the designated timeframe, but such applications are granted from time to time.

It is also necessary that an employee looking to lodge their unfair dismissal claim is employed under our national workplace relations system. Most often this means that they need to be covered by an award or registered agreement, but if an employee is not covered by an award or agreement, they can also demonstrate that their income falls below the High-Income Threshold, which currently is set at $162,000 (as at 1/7/22).

If an employer doesn’t believe that their employee is eligible to apply for an unfair dismissal claim they can lodge a jurisdictional objection, which essentially says that the employer doesn’t believe that the Commission should be handling the claim. If successful, this means that the employee’s unfair dismissal claim itself will be dismissed, but it may require the employer to take action to convince the Commission to do so.

Procedural fairness in an unfair dismissal.

When an employee is being terminated from their employment it is always important for procedural fairness to be present. Offering a fair process assists in demonstrating that the dismissal was not harsh, unjust or unreasonable.

In a dismissal, practices and processes that uphold procedural fairness include:

  • Giving the employee an opportunity to improve their behaviour or performance,
  • Making the alleged misconduct or poor performance known to the employee,
  • Giving the employee a reasonable chance and opportunity to respond to the allegation against them,
  • Considering the employee’s response without bias or a preconceived notion of guilt,
  • Deciding on the issue by considering all the facts and information provided.

When procedural fairness isn’t offered to an employee, especially when an employee is in a situation in which they might be dismissed, then there will be a much greater risk of an unfair dismissal being found to have occurred and could see the employer needing to compensate the employee as part of the process, or even reinstate the employee to their former position, possibly including payment of lost wages after being dismissed.

Unfair dismissal in a small business.

As mentioned previously, small businesses have slightly different rules when it comes to dismissing an employee, one of those being the extended minimum employment period from 6 months to 12. Small businesses also have access to the Small Business Fair Dismissal Code, which simplifies the necessary steps employers should follow in the process of a dismissal of an employee and also prompts the employer to use procedural fairness and follow the correct process. Carefully using the Code doesn’t guarantee an employee won’t claim an unfair dismissal, however it will definitely strengthen the employer’s defence against the claim if it can be demonstrated that the employer’s process followed was consistent with the Code.

Maximum payout for an unfair dismissal.

Unlike General Protections claims,  unfair dismissal claims do have a cap on the maximum payout an employee can receive as part of this process. The maximum payout through this jurisdiction is 6 months of the employee’s salary inclusive of penalties, bonuses or any other amounts that might supplement the amount. Additionally, because there is a high-income threshold which is currently $162,000 (however this number updates every financial year),the maximum amount of a payout for an unfair dismissal for this financial year is presently $81,000.

However, a simple finding that a dismissal was unfair won’t automatically mean the payment of the maximum damages by the employer, and the maximum will generally only apply to the most egregious of situations, or perhaps other factors such as where the employee has a very long history of unblemished employment before their dismissal.

Can a casual employee make an unfair dismissal claim?

For a casual employee to be eligible to claim unfair dismissal, they must have worked the minimum employment period of either 6 or 12 months depending on the size of their employer, and adhere to all other standards of eligibility.

Additionally, the casual employee must have worked in a regular and systematic pattern of employment and have a reasonable expectation of ongoing employment. If required, the Fair Work Commission will make an objective consideration as to whether a casual was engaged in such a way that allowed them to be considered regular and systematic, if required as part of their claim. Work can be found to be regular and systematic when offers of work were made to the employee within their indicated availability, accepted, and excluding absences not based on other factors, such as an employee being sick. There also has to be an expectation that the employment will be ongoing, and not only available for a specific period, or on an occasional basis.

Other grounds for exclusion.

Other grounds excluding employees from making a claim of unfair dismissal includes the person was demoted in their employment, but the demotion did not involve a significant reduction in their remuneration or duties and they remained employed with their employer that effected the demotion.

Other grounds for exclusion include that the employee was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season.


Dismissing an employee can be a difficult and stressful time for both employer and employee, and it only takes one mistake for a business to be at risk of an unfair dismissal claim. Even doing everything right won’t prevent a disgruntled employee from lodging a claim.

Make sure to take a look at our Ultimate Guide for Avoiding Unfair Dismissals, for all you need to know about protecting your business from unfair dismissal claims.

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