Procedural Fairness in Dismissals: The #1 Unfair Dismissal Defence for Employers

For employers: When the Fair Work Commission hears an unfair dismissal claim, procedural fairness is the single most critical factor it examines. Australian employers who follow a proper dismissal process — even when dismissing for genuine cause — dramatically reduce your risk of losing claims that should succeed.

In 2024–25, unfair dismissal claims jumped 24%, yet many of those claims succeed not because the dismissal was unjustified, but because the employer cut corners on process. As an employer, this is your single biggest exposure — and it’s entirely preventable. This guide covers the exact steps you need to follow to protect your business.

What Is Procedural Fairness in Dismissal?

Procedural fairness means following a fair process before terminating someone. Under the Fair Work Act 2009, the FWC assesses whether a dismissal was “harsh, unjust or unreasonable” by examining both the reason for dismissal AND the process used.

Even if your reason is valid (misconduct, poor performance, redundancy), a flawed process can still result in an unfair dismissal finding — and a compensation payout of up to $95,275. Under the Fair Work Ombudsman guidance and Fair Work Commission case law, both the reason AND the process are assessed.

The Four Pillars of Procedural Fairness (for Employers)

1. Clear Notice of the Problem

The employee must know exactly what conduct or performance issue triggered the possibility of dismissal. Vague feedback doesn’t cut it.

Best practice:

• Document the specific incident, date, and impact (e.g., “On 12 June 2026, you failed to meet the deadline for Project X, causing $15,000 in client rework”)
• Distinguish between misconduct (rule breach) and performance issues (inability to do the job)
• For misconduct: be explicit about which policy was breached (e.g., “Attendance Policy clause 3.2”)
• For performance: provide metrics or examples of the gap vs. the standard expected

Courts and the FWC take a dim view of employers who dismiss someone for “vague poor performance” without ever documenting what that actually means.

2. A Fair Opportunity to Respond

You must give the employee a genuine chance to respond to the allegation before deciding to dismiss. This isn’t a suggestion — it’s mandatory.

Best practice:

• Hold a meeting or send a formal notice inviting the employee to provide their account
• Allow at least 48 hours for response (more for serious allegations)
• Let them bring a support person (union rep, colleague, or family member)
• Actually listen to their version of events — don’t dismiss it out of hand
• For serious misconduct (theft, safety breach), consider a formal disciplinary investigation before the meeting

The FWC regularly finds dismissals harsh where an employer jumped to termination without ever asking the employee their side of the story.

3. Proportionate Warnings (Usually)

For performance issues and minor misconduct, the FWC expects a progression: informal chat → formal warning → final written warning → dismissal.

For serious misconduct (assault, theft, gross safety breach), you can dismiss without prior warnings — but you still need a fair investigation and response opportunity.

Best practice:

• For performance: provide a 30-60 day performance improvement plan with clear targets, support, and review dates
• For minor misconduct: issue a written warning that specifies the conduct, policy breached, and consequences of repetition
• Document every step — every chat, every warning letter, every performance discussion
• Keep warnings in the employee’s file for the life of their employment (for context in future dismissal decisions)

Jumping straight to dismissal for a first-time minor breach is a red flag to the FWC.

4. Fair Documentation & Decision-Making

You must document the decision and the reasoning behind it. This record becomes critical if the dismissal is later challenged.

Best practice:

• Maintain a dated file of all incidents, conversations, and decisions — handwritten notes are fine as long as they’re dated and legible
• Write a formal dismissal letter that sets out: the reason, the process followed, the date of termination, and final pay details
• Include reference to the policy breached (if applicable)
• Consider having HR or a manager separate from the one directly involved review the decision
• For redundancy, document commercial reasons and the selection criteria used (not just “they had to go”)

Common Procedural Fairness Failures (and Why They Cost Employers)

Failure 1: No investigation
You hear gossip that an employee is stealing, so you fire them on the spot. The FWC will ask: did you actually investigate? Did you review CCTV, speak to witnesses, or give the employee a chance to explain? Without investigation, dismissal is harsh.

Failure 2: Inconsistent enforcement
You dismiss one employee for a social media post about the company, but let another employee’s similar post slide. The FWC will find this unfair — you must apply rules consistently or have a genuine reason for the difference (e.g., one was confidential company info, the other wasn’t).

Failure 3: No proper warning
An employee has been underperforming for months. You document it, but never sit down and tell them they’re at risk of dismissal. Then you fire them. The FWC will often say you should have given a final written warning first.

Failure 4: Dismissing before the process is finished
You tell an employee they’re being investigated for misconduct, then three days later you dismiss them by email without ever following up. This lacks procedural fairness — the process felt rushed and incomplete.

Failure 5: Not considering alternatives
An employee is struggling in their role. Instead of offering retraining, moving them to a different position, or a performance plan, you immediately dismiss. The FWC may find this harsh if other options existed.

Procedural Fairness for Different Dismissal Reasons

Misconduct (Breach of Policy)

• Step 1: Investigate — collect evidence, interview witnesses, review policies
• Step 2: Notify — in writing, specify the alleged breach and invite response
• Step 3: Meet — hear their side, take notes, consider their explanation
• Step 4: Decide — apply the policy fairly; for minor breaches, consider warnings first
• Step 5: Document — dismissal letter setting out the finding and reasoning

Performance (Capability)

• Step 1: Discuss — what’s the gap? What support do they need?
• Step 2: Plan — agree on 30–60-day improvement plan with targets and support
• Step 3: Review — meet at agreed intervals, document progress
• Step 4: Final warning — if no improvement, issue final written warning
• Step 5: Dismiss — if still no improvement, terminate with clear written reasoning

Redundancy

• Step 1: Communicate — explain why the role/position is redundant
• Step 2: Consult — discuss with the employee, invite suggestions on alternatives
• Step 3: Apply criteria — if multiple people in the same role, explain selection criteria (not just gut feel)
• Step 4: Offer redeployment — genuinely explore whether they could do another role
• Step 5: Calculate entitlements — redundancy pay + notice period + leave

Key Timings & Deadlines

An employee has 21 days from dismissal to lodge an unfair dismissal claim with the FWC. For you, that means:

• Don’t assume you’re in the clear after 21 days — the FWC can extend this in some circumstances
• Keep all documentation (warnings, meetings, investigations) for at least 3–5 years
• For any dismissal you think might be challenged, preserve all electronic communications (emails, chat, CCTV)

Procedural Fairness & the Modern Awards

Some modern awards include additional procedural safeguards. For example:

• The Manufacturing, Printing & Kindred Industries Award requires consultation before dismissal
• The Fast Food Industry Award has specific disciplinary procedures

Always check whether the employee’s modern award adds extra steps. Failing to follow them strengthens an unfair dismissal claim.

Can You Dismiss Immediately Without a Process?

Yes — but only in rare cases of serious misconduct:

• Gross safety breach (working under the influence, ignoring lockout procedures)
• Violence or assault on a colleague or customer
• Theft of company property
• Gross insubordination (refusing a lawful direction in a way that undermines authority)

Even then, you must have conducted a genuine investigation, given the employee a chance to explain (even if briefly), and reasonably believed the allegation.

Firing someone “for cause” without any process is almost never defensible — the FWC will require you to prove the misconduct was so serious that summary dismissal was justified.

The FWC Perspective on Procedural Fairness

The Fair Work Commission consistently emphasizes that procedural fairness is not just a box-ticking exercise — it’s a genuine protection for both employer and employee:

• For employers: If you follow a fair process, you’ll almost always win the claim, even if the dismissal was harsh on paper
• For employees: If you didn’t get a fair process, you have a strong claim regardless of whether the reason was valid

The Commission’s message is clear: take the process seriously, or pay the price.

Your Procedural Fairness Checklist

• □ Is there a clear, documented reason for dismissal?
• □ Has the employee been made aware of the problem (via meeting, formal notice, or investigation)?
• □ Has the employee had a genuine chance to respond?
• □ Were prior warnings issued (where appropriate)?
• □ Have I applied this policy consistently across the team?
• □ Is the dismissal proportionate to the conduct/performance issue?
• □ Have I considered alternatives (retraining, redeployment, performance plan)?
• □ Is everything documented in writing?
• □ Would I be comfortable explaining this dismissal to the FWC?

If you can’t tick every box, you’re at risk (See our complete unfair dismissal defence guide for step-by-step protection.) — and dismissal claims are expensive, time-consuming, and damaging to your business’s reputation.