Ending Employment, Unfair Dismissal and Workplace Disputes

What every member needs to know before ending an employment relationship

Category:  Business operational advice — People and HR

Audience:  Member retailers as employers: newsagents, gift shops and garden centres

Last reviewed:  August 2026

Sources:  Fair Work Ombudsman and Fair Work Commission (listed at the end of this article)

Important: always check current advice. Workplace laws, thresholds, notice tables and time limits change regularly. Before acting on anything in this article, confirm the current position at fairwork.gov.au and fwc.gov.au, and obtain professional advice for your specific situation. This article is general information, not legal advice.

Why this matters for members

Ending someone's employment is the highest-risk HR decision a small retailer makes. A dismissal handled badly can lead to an unfair dismissal claim in the Fair Work Commission, with conciliation, hearings, and outcomes that can include compensation or reinstatement. Handled properly, with the right process and paperwork, the risk is manageable. Most member businesses employ fewer than 15 people, which brings both special protections and specific rules covered below.

1. Ending employment properly

Notice of termination

An employer must give written notice of the day of termination. The minimum notice period under the National Employment Standards depends on the employee's length of continuous service, and an employee can either work out the notice or be paid in lieu of it.

Add one extra week if the employee is over 45 years old and has at least two years of continuous service. Casual employees are generally not entitled to notice, and notice is not required in cases of serious misconduct. Confirm the current table and exceptions on the Fair Work Ombudsman's "Notice of termination and redundancy pay" pages before relying on it, and check your award, as it can impose additional requirements.

Final pay

On termination, an employee must receive any outstanding wages, payment in lieu of notice where applicable, accrued annual leave and long service leave, any accrued time off in lieu of overtime, and redundancy pay if it applies. Leave taken in advance but not yet accrued may be deducted from final pay.

Redundancy

Redundancy pay under the National Employment Standards applies to eligible employees with 12 or more months of continuous service, scaling with service up to a maximum of 16 weeks' pay. Critically for members: businesses with fewer than 15 employeesare generally exempt from redundancy pay, though notice and final pay obligations still apply, and some awards vary this. A redundancy must also be genuine: the job must no longer be required, and consultation and redeployment obligations must be met, or the dismissal may be challenged as unfair.

2. Unfair dismissal

A dismissal is unfair when the Fair Work Commission finds it was harsh, unjust or unreasonable, or was not a genuine redundancy. The Commission looks at whether there was a valid reason related to capacity or conduct, whether the employee was told the reason and given a chance to respond, and whether the dismissal was a proportionate response.

Who can claim

• An employee must have completed a minimum employment period: 6 months, or 12 months where the employer is a small business (fewer than 15 employees).
• They must be covered by the national workplace relations system and by an award or agreement, or earn below the high income threshold (this threshold changes each July; check the current figure).
• Applications must be lodged with the Commission within 21 days of the dismissal taking effect.

The Small Business Fair Dismissal Code

This is the most important protection available to members. An employer with fewer than 15 employees that dismisses an employee in compliance with the Small Business Fair Dismissal Code can have the dismissal deemed fair. In practical terms, that means:

• Document informal performance discussions as they happen, even briefly.
• Give formal warnings, in writing where possible, stating the problem and the risk of dismissal, with evidence kept.
• Give the employee a genuine opportunity to respond and to improve.
• Keep a copy of the Code and its checklist, complete the checklist at the time of any dismissal, and retain it with your records.

Summary dismissal without notice is only defensible for serious misconduct (for example theft, violence or serious safety breaches), and even then the belief must be reasonable and grounded, ideally with a report to police where relevant.

3. Unlawful termination

Separate from unfair dismissal, it is unlawful to dismiss an employee for reasons including: a protected attribute (race, sex, age, disability, pregnancy, religion and others); temporary absence due to illness or injury with a medical certificate; union membership or activity; acting as an employee representative; taking parental leave; voluntary emergency management activity; or making a complaint or starting proceedings against the employer. These claims also carry a 21-day application window and can proceed regardless of business size or length of service. No dismissal should ever be connected, in substance or appearance, to any of these grounds.

4. Workplace disputes and the Fair Work Commission

The Fair Work Commission is the national workplace tribunal. Beyond unfair dismissal, it deals with disputes members may encounter as employers, including: general protections claims (dismissal and non-dismissal); bullying, where it can make stop-bullying orders; sexual harassment disputes; disputes under an award or agreement's dispute resolution procedure; flexible working arrangement and unpaid parental leave disputes; casual conversion, fixed-term contract and right-to-disconnect disputes. Most matters begin with conciliation, an informal facilitated discussion where most claims settle, before any formal hearing or arbitration. If a member receives a Commission notice, the two immediate steps are: diarise every deadline in it, and get advice before responding.

Practical checklist before any dismissal

• Count your employees. Under 15 means the small business rules and the Fair Dismissal Code apply to you.
• Check the current rules at fairwork.gov.au before acting, and check your award.
• Make sure there is a valid, documented reason related to conduct, capacity or genuine redundancy.
• Warn, explain and give the employee a real chance to respond and improve, with records kept.
• Follow the Small Business Fair Dismissal Code and complete its checklist at the time.
• Give correct written notice and pay every final entitlement promptly.
• If in any doubt, get professional advice before dismissing, not after a claim arrives. The 21-day claim window means problems surface quickly.

Key takeaway: for a shop with fewer than 15 staff, the Small Business Fair Dismissal Code is your protection, and paperwork is how you prove you followed it. Warn in writing, give a chance to respond, keep records, pay final entitlements correctly, and always check current advice before acting.

Sources

• Fair Work Ombudsman — Unfair dismissal: fairwork.gov.au/ending-employment/help-with-termination/unfair-dismissal
• Fair Work Commission — Workplace disputes: fwc.gov.au/workplace-disputes
• Fair Work Ombudsman — Ending employment fact sheet: fairwork.gov.au/tools-and-resources/fact-sheets/minimum-workplace-entitlements/ending-employment

Pages accessed August 2026. These agencies update their guidance regularly; the online versions are always the authority over this article.

Disclaimer

This article is general information prepared for newsXpress members and is not legal advice. Employment law changes and individual circumstances differ. Always check the current advice at fairwork.gov.au and fwc.gov.au, and consult an employment lawyer or workplace relations adviser before ending anyone's employment or responding to a claim.