Quick Summary
- Serious misconduct allows an employer to terminate employment without notice under the Fair Work Act 2009
- It must be wilful or deliberate behaviour inconsistent with the continuation of employment
- The conduct must cause serious and imminent risk to health, safety, reputation, or viability
- Employers must still follow procedural fairness — a valid reason alone is not enough
- An unfair dismissal claim can still be lodged within 21 days of termination
Serious misconduct is one of the few circumstances where an Australian employer can dismiss an employee summarily — that is, without giving notice. But the bar is high, and getting the process wrong can expose your business to an unfair dismissal claim at the Fair Work Commission within 21 days. This guide explains what qualifies, what does not, and the steps employers must follow.
What is serious misconduct under the Fair Work Act?
Under Regulation 1.07 of the Fair Work Regulations 2009, serious misconduct has a two-part test. The behaviour must be:
- Wilful or deliberate — the employee knew what they were doing and chose to do it; and
- Inconsistent with the continuation of the contract of employment — the conduct is so fundamental a breach that the employment relationship cannot continue.
Additionally, the conduct must cause serious and imminent risk to the health or safety of a person, or to the reputation, viability, or profitability of the employer’s business. Mere underperformance or minor policy breaches do not meet this threshold.
The Regulations also deem three specific categories as serious misconduct:
- Theft, fraud, or assault in the course of employment
- Being intoxicated at work
- Refusing to carry out a lawful and reasonable instruction consistent with the employment contract
Five examples of serious misconduct
| Conduct | Why it qualifies |
|---|---|
| Theft from employer | Deliberate taking of property, inconsistent with employment, causes financial risk |
| Workplace assault | Creates serious and imminent risk to health and safety of other employees |
| Falsifying timesheets | Fraud — deliberate deception causing financial harm to the business |
| Drug or alcohol intoxication | Deemed serious misconduct — imminent risk to safety in most workplaces |
| Refusing a lawful instruction | Deemed serious misconduct if the instruction is lawful, reasonable, and consistent with the contract |
What is not serious misconduct?
Employers frequently mistake performance issues or minor misconduct for serious misconduct. The following generally do not qualify:
- Consistently poor performance — this requires a performance management process
- A single minor policy breach (e.g. being 10 minutes late once)
- Personality conflicts or disagreements with management
- Genuine mistakes or errors in judgement without wilful intent
- Refusing an instruction that is unlawful or unreasonable
If the conduct does not meet the serious misconduct test, the employer must provide the appropriate notice period under the National Employment Standards or the applicable Modern Award.
The summary dismissal process for employers
Even where serious misconduct is clear, an employer must still afford the employee procedural fairness. A valid reason without a fair process will still result in an unfair dismissal finding. Follow these steps:
- Suspend the employee on full pay pending investigation — escort them from the premises if there is a safety or risk concern.
- Arrange a meeting — advise the employee they may bring a support person. Have your own witness present.
- Present all evidence — share witness statements, documents, or other evidence supporting the allegations.
- Allow the employee to respond — either verbally at the meeting or in writing within a reasonable timeframe (1–3 business days).
- Consider the response — do not pre-judge. Weigh the employee’s explanation against the evidence.
- Make a decision — if serious misconduct is established, terminate in writing with clear reasons.
Facing an unfair dismissal claim after a summary dismissal?
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Common employer mistakes
| Mistake | Consequence |
|---|---|
| Terminating before hearing the employee’s response | Procedural unfairness — unfair dismissal finding likely |
| Labelling poor performance as serious misconduct | Does not meet the legal test — claim will fail at the Commission |
| No witness at the termination meeting | Disputed facts become one person’s word against another |
| Not providing written reasons for termination | Makes it harder to defend the decision at conciliation |
| Rushing the decision in under 24 hours | Appears pre-determined — undermines procedural fairness |
Key takeaways for employers
- Serious misconduct must be wilful, deliberate, and inconsistent with continuing the employment relationship
- The two-part test (wilful/deliberate + serious and imminent risk) must be satisfied — not just one part
- Even with valid serious misconduct, procedural fairness is mandatory
- An employee can still lodge an unfair dismissal claim within 21 days — the summary dismissal is not the end of the risk
- Maximum unfair dismissal compensation is $95,050 (half the $190,100 high income threshold from 1 July 2026)
Frequently Asked Questions
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Disclaimer: Fair Work Centre is an independent private organisation providing advisory services to employers only. It is not associated with or authorised by the Fair Work Ombudsman, the Fair Work Commission, or any government authority. This article contains general information only and does not constitute legal advice. For advice specific to your circumstances, speak to one of our employment lawyers.
