Discovering People

      How can I prevent unfair dismissals and subsequent claims?

    With Australia having the second highest incidence of litigation worldwide, it has become increasingly important for employers to understand current employment legislation.  It is important for employers to be aware of current legislation, as employees are now more likely to seek legal advice when they believe they have been discriminated against and quite often the law leans in the direction of the employee. Included below are some practical steps on how you can minimise the risk of a claim.

    Have a valid reason for the termination

    Capacity and Conduct

    Essentially capacity and conduct are the employee’s ability and willingness to do the job. The employee must have the necessary skills, knowledge and qualifications and be prepared to behave in an appropriate manner—to follow instructions, not intentionally harm the employer’s business and use skill and care while working. The lack of ability to do the job, or failure to observe proper conduct, are valid reasons for dismissaif procedural fairness is observed. The capacity or conduct of the employee is also a prime consideration in unfair dismissal provisions under State legislation.

    Termination due to redundancy

    Dismissal of an employee because of the operational requirements of the business usually occurs because there is no longer any work for the employee. This situation, known as redundancy, usually arises because of circumstances such as the introduction of technological change, economic downturns, company mergers, take-overs or restructuring.

    An employer can minimise the risk of an unfair dismissal claim when making employees redundant by following the redundancy procedures in the award that applies to their business. Typically these procedures include:

    • consulting employees about the changes that are bringing about the redundancy;
    • trying to find an alternative position for the employee in the business;
    • settling on a fair decision-making process for selecting employees to be made redundant.

    It will not usually result in an unfair dismissal claim if the employee accepts that the reason for the dismissal was beyond the control of the employer. It would not generally be appropriate however, to dismiss an employee on the ground that work was no longer available if a similarly qualified person is then employed to do the same work.

    Procedural fairness

    Procedural fairness is an important issue, and the Australian Industrial Relations Commission (AIRC) will have regard to whether or not an employee has been afforded procedural fairness when it is deciding an unfair dismissal claim.


    In handling unfair dismissal cases the AIRC will consider not only whether the employer had a valid reason for dismissing the employee but also whether the employee was informed of it.  No matter what the reason for the dismissal—even redundancy—the Commission will still consider whether the employee was informed. It is good business practice to give the employee in writing the reason(s) for termination and keep a copy for your records.

    Opportunity to respond

    Giving the employee the opportunity to respond to the reasons given for dismissal provides fairness to employees who face losing their jobs. It is particularly important if the reason is the employee’s conduct or work performance. It is also good business practice to keep a written record of the fact that the employee was given a chance to respond, and record the nature of any response.


    There is no set number of warnings that must be given to an employee about unsatisfactory performance or conduct. To help prevent an unfair dismissal claim based on procedural fairness, there should be at least one warning of dismissal. This warning should:

    • clearly identify the problem;
    • indicate what changes or improvements are expected;
    • state that dismissal might occur if the problem continues;
    • set time in the near future to review the employee’s performance or conduct; and
    • when a time for improvement is specified, it should be made clear that dismissal could still occur in the review period if the employee’s performance is unacceptable.

    More than one warning may be appropriate, depending on factors such as the employee’s length of service and the nature of the conduct or performance.

    A copy of a written warning is the best way to demonstrate that this procedure has been followed. Ideally this should be signed by the employee as an acknowledgment of receipt. If it is not possible to give a warning in writing, the employer should make a short note of the nature of the conversation and have the employee sign it as agreeing to what was said. The employer might offer the employee the opportunity to have a representative, such as a union or workplace representative, in attendance at any counselling session. This might be important if the employee has any language or literacy difficulties.


    If you require any assistance filling your vacant positions, please feel free to contact our office on 9570 2411      

    If you have any questions, human resources issues to discuss or would like to give any feedback in regards to this newsletter, please don't hesitate to email me -