Unfair dismissal in the NSW state system.

What unfair dismissal means.

A dismissal is unfair, in the state system, if it was harsh, unreasonable or unjust. That is a judgment about both the reason for the dismissal and the way it was carried out. A sacking can be unfair because there was no good reason for it, or because a good reason was acted on unfairly, without warning or a chance to respond. The focus is on fairness, not just on whether the employer was technically entitled to dismiss.

This is general information, not advice on your matter, and it is about the state system. If you are in the national Fair Work system, the tests and the tribunal differ, and our guide on which system covers you explains how to tell. Whichever system applies, the time limit is short, so act quickly.

What makes a dismissal harsh, unreasonable or unjust?

The Commission looks at whether there was a valid reason for the dismissal connected to the person's conduct or capacity, and at whether the process was fair. A dismissal can be unjust if the reason was not made out, unreasonable if the decision did not follow from the facts, and harsh if the punishment was disproportionate to what the employee did or its effect on them was severe. A dismissal can be unfair for any of these reasons.

Process matters as much as reason. Even where an employer had a genuine concern, a dismissal can be unfair if the employee was not told of the problem, not given a chance to respond, or not warned that their job was at risk. Procedural fairness, a warning, an explanation, a real opportunity to answer, is often what separates a fair dismissal from an unfair one on the same facts.

Who can bring an unfair dismissal claim?

You have to be an employee in the state system who was dismissed, and there are limits. Very short-term employees, some casuals, and people above certain thresholds may be excluded, and the rules on qualifying periods and coverage apply. A genuine redundancy, where the job itself is no longer needed and the process was proper, is generally not an unfair dismissal, though a sham redundancy used to remove a particular person can be.

Whether you were dismissed at all can be an issue. A resignation is not a dismissal, but a forced resignation, where the employer made staying untenable, can be treated as a dismissal, sometimes called constructive dismissal. If you were pushed out rather than choosing to leave, that is worth advice, because it affects whether you can claim at all.

What is the time limit?

The time limit for an unfair dismissal claim is short, measured in weeks from the dismissal, and it is strict. A claim lodged out of time can be refused unless there are exceptional circumstances that explain the delay, and the Commission does not extend the time lightly. This is the single most important practical point in any unfair dismissal matter.

The lesson is to act at once. Do not wait to see if the employer will change their mind, and do not spend the time gathering every document before you lodge. Lodge within time and build the case afterwards. Our guide on the unfair dismissal application and time limits sets out the process and the deadlines in more detail.

What can the Commission order?

The primary remedy for unfair dismissal is reinstatement, getting the job back, sometimes with an order to make up lost pay. Reinstatement is the main remedy the law prefers, on the view that the fairest fix for a wrongful sacking is to undo it. Where reinstatement is not practical, because the relationship has broken down, the Commission can order compensation instead, subject to limits.

Compensation is meant to reflect lost earnings, not to punish the employer, and it is capped. It takes account of what the employee would have earned but for the dismissal, what they have earned or could earn since, and their efforts to find new work. The remedy is about putting the employee back in the position they would have been in, so far as money or reinstatement can, rather than awarding damages for hurt feelings.

How does an unfair dismissal claim run?

After you lodge, the matter usually goes to conciliation, where a member of the Commission helps the parties try to settle. Many unfair dismissal claims resolve here, often for a payment or an agreed reference, without a contested hearing. Conciliation is confidential and quicker and cheaper than a full hearing, and it gives both sides a chance to resolve the matter on their own terms.

If conciliation fails, the matter proceeds to arbitration, where the Commission hears evidence and decides whether the dismissal was harsh, unreasonable or unjust, and what remedy should follow. The employer has to justify the dismissal, and the employee presents their account. Preparing the evidence, the timeline, the warnings or lack of them, the reason given, is what wins or loses the case at that stage.

Primary sources: unfair dismissal in the state system is governed by Part 6 of the Industrial Relations Act 1996 (NSW), which sets the harsh, unreasonable or unjust test and the remedies of reinstatement and compensation. The national equivalent is Part 3-2 of the Fair Work Act 2009 (Cth). NSW IRC unfair dismissal decisions are searchable on JADE.

Common questions

What is unfair dismissal in the NSW state system?

A dismissal is unfair if it is harsh, unreasonable or unjust. That covers both the reason for the dismissal and the way it was carried out. A sacking can be unfair because there was no good reason, or because a good reason was acted on unfairly, without warning or a chance to respond. The Industrial Relations Commission decides these claims.

What makes a dismissal harsh, unreasonable or unjust?

The Commission looks at whether there was a valid reason connected to conduct or capacity and whether the process was fair. A dismissal can be unjust if the reason was not made out, unreasonable if it did not follow from the facts, and harsh if the punishment was disproportionate or its effect severe. Lack of warning or a chance to respond often makes a dismissal unfair.

What is the time limit for an unfair dismissal claim?

It is short, measured in weeks from the dismissal, and strict. A claim lodged out of time can be refused unless there are exceptional circumstances. The practical advice is to lodge within time and build the case afterwards, rather than waiting or gathering every document first.

What can the IRC order for an unfair dismissal?

The main remedy is reinstatement, getting the job back, sometimes with lost pay. Where reinstatement is not practical because the relationship has broken down, the Commission can order compensation instead, which reflects lost earnings and is capped. Compensation is about restoring the employee's position, not punishing the employer.

Is a redundancy an unfair dismissal?

A genuine redundancy, where the job is no longer needed and the process was proper, is generally not an unfair dismissal. But a sham redundancy used to remove a particular person can be unfair. A forced resignation, where the employer made staying untenable, can also be treated as a dismissal and claimed.

To speak to a workplace lawyer, call Aaron Kernaghan on 0421 717 019.

This article is written by Aaron Kernaghan, Special Counsel at Good Legal Lawyers, as at 30 August 2026. It is general information and reflects the personal opinion of the author only. It is not legal advice, it is not a substitute for advice on your own matter, and it does not purport to be accurate or complete. The law changes and procedure varies from case to case. For advice on a specific matter, contact Aaron Kernaghan on 0421 717 019 or contact the firm.

More commentary by Aaron Kernaghan.

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