Australia: New Federal Unfair Dismissal And ‘Adverse Action’ Jurisdictions Begin

Last Updated: 2 July 2009
Article by Andrew Tobin

Various parts of the Fair Work Act come into effect on 1 July 2009. Among them are the provisions enacting the new federal unfair dismissal and 'adverse action' jurisdictions of Fair Work Australia (FWA).

The immediate practical implications for 'national system employers' (most commonly, trading companies and incorporated associations) are these:

Unfair dismissal

  • Many more former employees will have access to the jurisdiction than before. In particular:
  • employers with fewer than 101 employees will become subject to the jurisdiction; and
  • employees dismissed for operational reasons (such as redundancies) will be able to make a claim in certain circumstances.
  • From 1 July 2009, through the 'high income threshold', award-free employees earning more than $108,300 (up from $106,400) will be unable to make an unfair dismissal claim.
  • Employees covered by an award or a related instrument (such as a collective agreement, AWA or ITEA) earning above the threshold will be able to make claims.
  • The high income threshold will generally include the value of both monetary and non-monetary benefits provided to the employee during their former employment. In the absence of any agreed value relating to non-monetary benefits, FWA will be authorised to fix an estimated value in order to apply the threshold. Ideally, non-monetary benefits should be expressly valued in employment contracts and related paper-work, particularly for workers earning the threshold range.
  • Other new limits on the new system include that:
  • former employees of 'small business employers' will, before being able to make a claim, have to complete a 'minimum employment period' of one year; and
  • former employees of other businesses will, before being able to make a claim, have to complete a 'minimum employment period' of six months.

Service before 1 July 2009 will count toward the minimum employment periods.

  • For these purposes a 'small business employer' is one with fewer than 15 full time equivalent employees, to be determined by applying a complex formula spelt out in the legislation.
  • Small business employers will be able to take advantage of the 'Small Business Fair Dismissal Code'. The Code, a simple document with six paragraphs, provides a series of steps which are intended to protect small business employers from unfair dismissal claims, where allegations of poor worker performance or serious misconduct are involved. In theory, a dismissal will not be unfair if the dismissal was consistent with the Code. More information about the Code, a copy of it, and a compliance checklist are available from the new Fair Work Australia website.
  • Whether or not dismissal from a larger employer was unfair will depend on more widely ranging criteria including, for example, considerations of the size of the employer's enterprise and whether or not the employer had access to dedicated human resource management expertise.
  • The time limit for bringing a claim will be reduced from 21 days to 14 days after the dismissal takes effect although, as in the former system, that time limit can be extended in some (quite limited) circumstances.
  • The application fee payable to bring a claim will be $59.50, although FWA will be able to waive the fee in cases of 'serious hardship'.
  • Claims will be determined by FWA in a process that, on paper, interferes more than the previously applicable processes. Among other things, FWA will have greater powers to determine dismissal disputes in the very early stages of the proceedings, and complete control over the course that proceedings will take. For example, FWA, and not the parties, will decide whether or not, in the absence of an early settlement, a claim should proceed to a full hearing.
  • Parties to proceedings will be able to seek permission from FWA to be represented in the proceedings by a lawyer or paid agent. Professional representation will not be available as a right.
  • The available remedies include orders for reinstatement (to the employee's former position), re-employment (to an alternative position) and/or payment of compensation up to six months pay.
  • The general rule is that parties will have to pay their own costs associated with the prosecution or defence of an unfair dismissal claim, regardless of the outcome, although FWA will be able to make costs orders in limited circumstances.

Adverse action

A wide range of other provisions in the legislation also come into effect on 1 July. For example, changes will occur in the rules and procedures for enterprise bargaining, union rights of entry to workplaces and in connection with the regulation and enforcement of the Act. Most of the balance of the legislation will begin from 1 January 2010, most notably in the introduction from that date of the new federal safety net in the National Employment Standards and Modern Awards.

However, buried amongst the provisions beginning on 1 July are a series of rights to protection from a range of conduct bundled together under the heading of 'adverse action'. In general terms, the right to protection from 'adverse action' prevents one person discriminating against or victimising another because the second person has, or seeks to assert (or not assert) any one of several 'workplace rights'.

Protected parties include not only employees, but also people refused employment in certain circumstances ('prospective employees') and contractors and prospective contractors.

'Workplace rights' are very widely defined to include, for example, the right to initiate or participate in proceedings under a 'workplace law'. 'Workplace laws' include all federal and State legislation regulating the relationships between employers and employees including the Fair Work Act itself and the Independent Contractors Act.

State and federal anti-discrimination laws are expressly accommodated by separate provisions, which stop adverse action being taken against employees or prospective employees on a ground that would be unlawful under those laws such as race, sex, age or disability.

Dismissing an employee because the employee is temporarily absent from work because of illness or injury continues to be specifically unlawful.

'Adverse action' includes a very wide range of circumstances including:

  • dismissing an employee or contractor;
  • refusing to engage an employee or contractor; or
  • altering the position of a worker (whether employee or contractor) to their prejudice.

The provisions generally replace those in the former legislation that prevent 'unlawful' termination of employment.

In some cases, dismissals will be litigated under the 'adverse action' provisions rather than under the 'unfair dismissal' provisions. In those cases:

  • An application for relief must be filed with FWA within 60 days after the dismissal took effect (although, as in the unfair dismissal jurisdiction, this period can be extended in certain circumstances).
  • While FWA will attempt to resolve such disputes through an initial conference, unresolved disputes will potentially find their way to one of the Court divisions of FWA in a 'general protections court application'. In most cases, such an application must be made within 14 days after FWA certifies that it has been unable to resolve the dispute. No application can be made until that certificate has been issued.
  • The same restrictions upon representation in unfair dismissal proceedings apply while FWA is seeking to resolve the dispute – in other words, the FWA's permission is required. We doubt that there will be many cases where permission will be refused, because of the inherent complexity likely to be involved in most 'adverse action' applications. However, the parties will be automatically entitled to legal representation in disputes that proceed to a general protections court application.
  • In most cases the onus of proof will be reversed, so that if an application alleges that a person took action for a particular reason or with a particular intent, that reason or intent will be presumed unless the person against whom the allegation is made proves otherwise.
  • Available remedies include injunctive orders to stop or require certain conduct, orders for payment of compensation and interest, reinstatement, and for payment of civil penalties up to $6,600 in the case of individuals and $33,000 in the case of corporate entities.
  • Unlike proceedings in the unfair dismissal jurisdiction, compensation is uncapped, and in many cases, orders can be sought against people other than the employer or prospective employer. For example, orders could be sought in some cases against individuals personally responsible for the relevant 'adverse action'.
  • Again, the prospect for a costs order to be made is limited.

What now?

There is no need to panic. If you're a small business employer, make sure you familiarise yourself with the Small Business Fair Dismissal Code.

For all employers, broader application of the unfair dismissal jurisdiction requires a solid understanding of the requirements for procedural and substantive fairness in effecting dismissals. Similarly, more attention will need to be paid to process in redundancy based dismissals. If you're unsure of your obligations in these areas, or of what to do in any particular circumstance, seek qualified advice from a solicitor or industry association.

In broad terms, the risks for employers in the 'adverse action' provisions are not new. The way in which you should seek to manage those risks in the future will be the same as the way in which they should have been managed in the past. However, the provisions do create additional possibilities for litigation, and it is possible that the new jurisdiction conferred upon FWA will generate more formal dispute activity, particularly in the current economic climate.

Critical to avoiding claims (or liability upon claims) will be a thorough understanding of the industrial environment applicable to your workers (including potential workers). You will need to rigorously implement and apply policies and procedures associated with recruitment, equal opportunity, discrimination (including sexual harassment) and related dispute resolution processes.

© HopgoodGanim Lawyers

Australia's Best Value Professional Services Firm - 2005 and 2006 BRW-St.George Client Choice Awards

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Andrew Tobin
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions