Responding to an Unfair Dismissal Application: An Employer's Guide
Updated: Sep 22
⏹︎ By Grace Brunton-Makeham and David Drentin
When an employee files an unfair dismissal claim, the employer has 7 days to respond. But what happens next?
This step-by-step guide breaks down what to expect from the unfair dismissal claim process, and tips and tricks to help you get prepared.
Contents
Overview of the process
Stage | Timing | Description |
1. Application lodged (Form F2) | Within 21 days of the dismissal | Application fee of $92.70, which may be waived on hardship grounds; the FWC then serves the application on the employer |
2. Assessing the application | Within 7 days of service | Employer to consider whether there are any grounds for jurisdictional objections |
3. Employer response (Form F3) | Within 7 days of service | Employer prepares response including any jurisdictional objections, files with FWC and serves on the employee |
4. Conciliation | Ordinarily 2–5 weeks after lodgement of claim | Informal and voluntary, before an independent conciliator, usually 90 mins via telephone or online |
5. Arbitration / hearing | Weeks to months later | Directions for evidence (witness statements and documents) and submissions, then determinative conference or hearing before a FWC Member. |
6. Decision | Ex tempore (orally on the day) or reserved (delivered in writing later) | 90% of reserved decisions are issued within 12 weeks of hearing |
7. Appeal | Within 21 days of the decision | To a FWC Full Bench; permission required |
Jurisdiction & Remedies Overview
The FWC's remedies are limited to compensation, reinstatement, and orders restoring lost remuneration and continuity of service. Section 392(4) of the Fair Work Act 2009 (Cth) expressly excludes damages for shock, distress or humiliation, and punitive damages are not available.
Matter | Position |
Maximum compensation | Statutory cap - The lesser of 26 weeks’ remuneration or $95,050 (half the high income threshold) for dismissals taking effect on or after 1 July 2026 |
Damages for hurt or distress | Not available |
Reinstatement | The remedy the FWC must consider first, but infrequently ordered in practice |
Costs | Each party bears its own costs; costs orders are exceptional |
Resolved at conciliation | Approximately three in four matters, according to the FWC |
Applications lodged in 2024–25 | 16,500 |
Stage 1: The application is made
An unfair dismissal application is commenced by the former employee lodging a Form F2 with the FWC. The application must be lodged within 21 days of the dismissal taking effect.
The FWC may allow an extension of time, but only where 'exceptional circumstances' are established, having regard to the reason for the delay, when the person became aware of the dismissal, any action taken to dispute it, prejudice to the employer, the merits of the application and fairness as between the applicant and other persons in a similar position.
The FWC then serves the application on the employer and invites a response. The material provided will identify the basis on which the former employee contends the dismissal was unfair and the remedy sought. The employer’s response is due within 7 days of service.
Stage 2: Assessing the application
Before preparing a response, an employer should consider whether any of the following provide a jurisdictional objection to the application:
Was the applicant an employee? Independent contractors and volunteers are not eligible to bring an application.
Was the applicant dismissed? A dismissal includes termination at the employer’s initiative and a resignation forced upon the employee by the employer’s conduct, commonly described as 'constructive dismissal'. A purely voluntary resignation does not constitute a dismissal.
Was the minimum employment period completed? The minimum employment period is six months, or 12 months where the employer is a small business employer (fewer than 15 employees).
Did the applicant earn above the high income threshold? Where the employee was not covered by a modern award or an enterprise agreement and earned above $190,100 from 1 July 2026, they are not protected from unfair dismissal.
Was the dismissal a genuine redundancy? Where the dismissal was a genuine redundancy, it cannot be an unfair dismissal. For the redundancy to be a 'genuine redundancy' under the Fair Work Act 2009 (Cth), the position must no longer have been required by reason of changes in operational requirements; the employer must have complied with any consultation obligation under an applicable award or agreement; and redeployment within the business or an associated entity must not have been reasonable.
Was the engagement a fixed term, task or seasonal contract that came to an end, or a training arrangement that expired?
Was the applicant an irregular casual employee without a reasonable expectation of continuing employment?
Has the correct respondent been named, and has the applicant commenced more than one proceeding in respect of the same dismissal?
Was the application lodged within time (21 days of dismissal)?
Does the application application constitute (or include) a general protections claim? See more below.
Objections are determined by the FWC separately or together with the merits of the case. Objections are identified at paragraph 2.1 of the Form F3, although an objection may also be raised subsequently by lodging a Form F4.
Identifying the claim: unfair dismissal or general protections
Unfair dismissal is frequently conflated with general protections (otherwise known as 'adverse action'). The two are materially different and require a different application pathway. Further and crucially, the multiple actions provisions in Part 6-1 of the Act preclude an employee pursuing both in respect of the same dismissal. A high-level overview of the distinction between the two is set out below:
Claim type | Unfair dismissal | General protections |
Time limit | 21 days from dismissal | 21 days from dismissal or 6 years from the date of the adverse action (where no dismissal) |
Test | Whether the dismissal was harsh, unjust or unreasonable | Whether adverse action was taken because of a workplace right or protected attribute |
Onus of proof | On the applicant | Reversed; the employer must prove the reason |
High income threshold | Applies | Does not apply |
Compensation | Capped at the lesser of $95,050 or 26 weeks’ remuneration | Uncapped, and may include hurt and humiliation |
Civil penalties | Not available | Available |
Lawyer at staff conference | No permission required | Permission required |
Stage 3: The employer’s response
An employer has 7 days from the date of service in which to lodge a response using Form F3.
The content of the response
The response must address the application and identify any objection. It should contain a clear and concise chronology, cross-referenced to a limited number of annexed documents, is recommended. Annexed documents may include: the contract of employment, position description, warning letters, performance reviews, contemporaneous file notes, the letter of termination and any relevant policy.
Preserving the evidence
Steps should be taken immediately to maintain relevant records, including email, Teams messages, rosters, CCTV footage and access logs. Accounts should be obtained from witnesses while their recollection remains fresh. Employers should not create file notes bearing a date earlier than that on which they were prepared; a reconstructed document subsequently exposed in cross-examination will cause considerably greater damage than the evidentiary gap it was intended to address.
The case to be answered
Where an application survives any jurisdictional objection, the FWC must determine whether the dismissal was harsh, unjust or unreasonable, having regard to each of the matters set out in section 387:
whether there was a valid reason for the dismissal related to the person’s capacity or conduct, including its effect on the safety and welfare of other employees;
whether the person was notified of that reason;
whether the person was given an opportunity to respond;
any unreasonable refusal to allow a support person to be present at discussions relating to the dismissal;
where the dismissal related to unsatisfactory performance, whether the person had been warned about that performance beforehand;
the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed;
the degree to which the absence of dedicated human resource management specialists or expertise would be likely to impact on those procedures; and
any other matters the FWC considers relevant.
A valid reason must be “sound, defensible or well founded” [1].
Dismissals for misconduct: the evidentiary requirements
Where a dismissal is founded on alleged misconduct, the employer will discharge the evidentiary onus upon it by demonstrating that it:
conducted as full and extensive an investigation into the relevant matters as was reasonable in the circumstances;
afforded the employee every reasonable opportunity and sufficient time to answer the allegations;
honestly and genuinely believed, on reasonable grounds and on the information then available, that the employee was guilty of the misconduct alleged; and
concluded that, taking into account any mitigating circumstances associated with the misconduct or the employee’s work record, the misconduct justified dismissal.
A failure to establish any of these matters will probably render the dismissal harsh, unjust or unreasonable [2].
Common procedural deficiencies
Notification must precede the decision. The reason must be put to the employee before any decision to dismiss is made. The Full Bench has observed that notification after a decision has been taken is of little practical effect [3].
A warning that omits the consequence is frequently treated as no warning at all. In performance-related dismissals, the employee must be informed not merely that their performance is unsatisfactory but that unless there is an improvement in their performance, their employment will be terminated.
There is no positive obligation to offer a support person, but an unreasonable refusal of a request for a support person — including refusal of the employee's choice of person — will weigh against the employer. A support person attends to provide assistance and does not act as an advocate.
Sections 387(f) and (g): the Small-Employer Allowance
The FWC will consider the size of the employer’s enterprise and the absence of dedicated human resources expertise. Dismissals by small businesses have been held not to be unfair where procedural deficiencies were attributable to precisely those factors.
The FWC has, however, been clear as to the limits of these provisions. The procedures followed cannot be “devoid of any fairness” [4], and these provisions can not be used as “a shield behind which to hide” where conduct has been improper or belligerent. Common sense courtesies of conduct ought to exist in any workplace, whatever the size [5].
Small business employers: the Small Business Fair Dismissal Code
Where an employer employed fewer than 15 people and the dismissal was consistent with the Small Business Fair Dismissal Code, the dismissal is not unfair — the most significant protection available to a small employer.
For serious misconduct — theft, fraud, violence and serious breaches of work health and safety procedures are given as examples — dismissal without notice or warning is fair where the employer genuinely and reasonably believed the conduct occurred, was serious, and justified immediate dismissal; the FWC need not find that the conduct actually occurred.
In all other cases, the employer must have warned the employee of the risk to their employment, given a valid reason, afforded an opportunity to respond, and given a reasonable chance to rectify the problem, which may include additional training or clarified expectations. A support person may attend such discussions, though not a lawyer acting in a professional capacity.
The onus of proving compliance rests with the employer, through proper records and documentation.
Service
The Form F3 must be lodged with the FWC and a copy provided to the former employee, ordinarily by email, within the same seven-day period. Where a lawyer or paid agent has been engaged to act for the employer, a Form F53 notice that a representative has commenced acting must be lodged. Employers should not contact the applicant directly if either side is represented.
Stage 4: Conciliation
Conciliation is a voluntary, informal and confidential process, generally conducted by telephone or online and occupying up to 90 minutes. The conciliator is usually a member of the FWC's staff — not a statutory Member of the Commission — and has no power to decide the matter.
The conciliator will lead the discussion, explore the issues, ensure that the conversation remains courteous and assist the parties towards a resolution. The conciliator will not provide legal advice, argue on behalf of either party, make findings of fact, or make any decision or recommendation. Where a conciliator tests the weaknesses in an employer’s position, that is a function of the facilitative role and not an indication of any view on the merits.
The principal advantage of conciliation is that any outcome is available provided both parties agree to it. At arbitration, the available outcomes are limited by the Act.
Preparation
The person attending should hold authority to settle — the most common impediment to resolution is a representative who must obtain instructions.
In most matters the cost of defending an application to hearing will exceed the realistic exposure — an important commercial consideration. An opening position, a realistic objective and a point at which the employer will not settle should all be established in advance. The last of these is properly determined by reference to the cost of defending the application in professional fees, management time and disruption.
A concise opening should be prepared addressing the circumstances of the dismissal, the basis upon which it was justified, and the employer’s position as to resolution.
The non-monetary terms available warrant consideration. A statement of service, reference, mutual non-disparagement obligations, or characterising the separation as a resignation may be of considerable value to an applicant at little cost to the employer and frequently account for a material difference in the settlement sum.
Legal representation
No permission is required for a lawyer to advise an employer, prepare its Form F3, or participate in a conciliation conducted by a member of the FWC’s staff. The permission requirement in section 596 does not apply to staff conciliation in unfair dismissal matters, although it does apply where a Member conducts the conciliation, and where the matter proceeds to arbitration. Leave is not required for a director, manager or employee of the business to appear, or for an officer or employee of an employer association. Where a lawyer or paid agent acts for a party, a Form F53 notice must be lodged with the FWC.
Settlement
A cooling-off period may apply: unrepresented parties are ordinarily offered three days following the conciliation to decide whether to withdraw from an agreed settlement.
The terms of release require careful attention. The release should be sufficiently broad to capture general protections, discrimination, underpayment and common law claims, and not merely the unfair dismissal application. Employers should also address the absence of any admission of liability, mutual confidentiality and non-disparagement obligations, the agreed reference, statement of service, the return of company property, and the taxation treatment of any payment.
Stage 5: Arbitration
Where a matter is not resolved at conciliation, it proceeds to arbitration before a Member. Either party may request a further conciliation.
Arbitration takes one of two forms. A determinative conference is conducted in private and with less formality; where both parties are self-represented, this is ordinarily the course adopted. A hearing is generally conducted in public and is more formal. The FWC will conduct a hearing only where it considers it appropriate, having regard to the views of the parties and whether a hearing is the most effective and efficient means of resolving the matter. Where the facts are not in dispute, a matter may be determined on the papers.
The FWC will issue directions requiring the filing of witness statements and written submissions, together with any documents relied upon, by specified dates. These should be complied with strictly: as a general rule, evidence not contained in a witness statement will not be permitted at hearing. At the hearing, each party makes an opening, witnesses give evidence and are cross-examined, and the parties make closing submissions.
Permission to be represented
Permission is required under section 596 for a lawyer or paid agent to represent a party at a conference or hearing before a Member. It may be granted where representation would enable the matter to be dealt with more efficiently having regard to its complexity, where a party is unable to represent itself effectively, or where it would be unfair not to allow representation.
Permission has been refused where the employer was of sufficient size to maintain a human resources function, where effective representation was available through the employer’s industry association, and where the matter involved a simple factual contest not requiring forensic cross-examination.
Stage 6: The decision and remedies
The Member may deliver a decision ex tempore or reserve it; 90% of reserved decisions are issued within 12 weeks of the hearing. The FWC publishes its reasons for decision, including the names of the parties, on its website, even where the matter was determined in a private conference.
Reinstatement
The FWC will order compensation only where reinstatement is inappropriate. Reinstatement is infrequently ordered, ordinarily because trust and confidence between the parties have broken down. The fact that the position no longer exists is not of itself sufficient to render reinstatement inappropriate. Where reinstatement is ordered, the FWC may also make orders maintaining continuity of service and restoring lost remuneration.
Compensation
The compensation that can be ordered by the Fair Work Commission is the lower of:
half of the employee’s annual wage; OR
the compensation cap, which is $95,050 for 2026–27 and changes on 1 July each year.
According to the Fair Work Commission's published statistics:
The median compensation ordered between 5 and 7 weeks' pay; and
Less than 0.4% of applicants receive the maximum limit (the compensation cap) that we can order an employer to pay.
Compensation is assessed in accordance with the approach in Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21, as applied under section 392 of the Act in Bowden v Ottrey Homes Cobram [2013] FWCFB 431:
estimate the remuneration the employee would have received had the dismissal not occurred, which turns upon the period the employee would have remained in employment;
deduct remuneration earned since the dismissal; workers’ compensation payments are deducted, government payments are not, and a failure to mitigate loss may reduce the award;
deduct an amount for contingencies;
consider the impact of taxation and adjust accordingly; and
assess the resulting figure against the compensation cap.
The FWC must also reduce the amount where misconduct (i.e. bad behaviour) contributed to the decision to dismiss and will reconsider its assumptions where the formula produces a figure that is clearly excessive or clearly inadequate.
Costs
This is, in substance, a no costs jurisdiction: each party bears its own costs. Costs orders may be made only where an application or response was made vexatiously or without reasonable cause, where it should have been reasonably apparent that it had no reasonable prospect of success, or where a party has caused costs to be incurred through an unreasonable act or omission. Costs orders are ordinarily assessed on a party-party basis, as a proportion of costs actually incurred; indemnity costs are rarer still.
For more information: https://www.makehamflaherty.com.au/post/costs-orders-in-employment-litigation-when-are-they-made
Stage 7: Appeals
A party aggrieved by a decision may seek permission to appeal to a Full Bench of the FWC. The notice of appeal must be lodged within 21 days of the date on which the decision was issued, although an extension of time may be sought. Appeals are listed promptly: 96% of appeal hearings took place within 12 weeks in 2024–25.
Permission may be granted only where the Full Bench considers it to be in the public interest, and an appeal on a question of fact requires a significant error of fact to be established. An appeal is a review for error rather than a rehearing of the matter, and it is not an opportunity to re-argue the evidence.
There is no further right of appeal on the merits: the only recourse against a Full Bench decision is an application for judicial review in the Federal Court, confined to jurisdictional error.
Practical conclusions for employers
A response should be lodged within seven days.
Jurisdictional objections should be assessed carefully, and only those that are well founded pressed.
Small business employers should determine at the outset whether the Fair Dismissal Code affords protection, bearing in mind that the onus of establishing compliance rests with the employer.
The four evidentiary requirements applicable to conduct dismissals should be addressed directly, and reliance placed upon sections 387(f) and (g), should be considered for small business employers.
Conciliation should be attended with authority to settle and a considered position, and the terms of any release should be reviewed with care.
Employers that fare poorly are ordinarily those that missed the response deadline, failed to preserve relevant records, or attended conciliation without having formed a position.
If you would like to know more about how Makeham Flaherty Employment Lawyers can assist your business or organisation with managing employment disputes, please contact us.
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References
[1] Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373.
[2] Australia Meat Holdings Pty Ltd v McLauchlan Print Q1625 (AIRCFB, 5 June 1998).
[3] Crozier v Palazzo Corporation Pty Ltd Print S5897 (AIRCFB, 11 May 2000).
[4] Williams v The Chuang Family Trust t/a Top Hair Design [2012] FWA 9517.
[5] Sykes v Heatly Pty Ltd t/a Heatly Sports PR914149 (AIRC, 6 February 2002).
This is commentary published by Makeham Flaherty for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories.
Makeham Flaherty 2026.