Alex is Sprintlaw’s co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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Sometimes, serious conduct issues demand immediate action. If you’re facing theft, assault, severe breaches of safety, or other serious misconduct in your workplace, you may be considering instant dismissal (also called summary dismissal).
Instant dismissal is lawful in Australia - but only in narrow circumstances and only when you follow a fair, defensible process. Getting it wrong can expose your business to unfair dismissal or general protections claims, even if the conduct seems obvious.
In this guide, we’ll explain when immediate termination is allowed, the process you should follow to stay compliant, what you need to pay on exit, and practical steps to manage risk.
What Is Instant Dismissal?
Instant (or summary) dismissal is when you terminate an employee’s employment without notice because of serious misconduct. Under Australian law, serious misconduct generally includes behaviour that makes it unreasonable for you to keep employing someone, even for the notice period.
Examples often include:
- Theft, fraud or dishonesty
- Assault, threats or serious harassment
- Gross breaches of work health and safety (WHS) obligations
- Serious insubordination or refusal to follow a lawful and reasonable direction
- Intoxication at work (where it creates serious risk) or unlawful drug use
- Serious breaches of confidentiality or conflict of interest
Whether conduct is “serious” will depend on the facts, the role, your policies, and the risks involved. Context matters. One-off poor performance or minor misconduct generally won’t justify summary dismissal.
It’s also important to remember that even if the conduct is serious, you still need a procedurally fair process. Substantive reasons alone won’t save a flawed procedure.
When Can You Terminate Immediately?
In Australia, you can dismiss immediately if you have a sound, defensible reason related to serious misconduct and you’ve followed a fair process (more on that below). If you’re unsure whether something reaches this threshold, treat it as an allegation and investigate before deciding.
Consider these questions before moving to instant termination:
- Is there a clear, documented allegation of serious misconduct?
- Do we have reliable evidence (e.g. witness statements, CCTV, system logs)?
- Have we put the allegation to the employee and given them a genuine chance to respond?
- Have we considered their response and any mitigating factors (e.g. training gaps, context, prior record)?
- Is there a less severe outcome that is more appropriate (e.g. final warning, transfer, training)?
The Fair Work Commission (FWC) looks at both the reason and the process. The statutory fairness factors are set out in section 387 of the Fair Work Act, including whether the employee was notified of the reason and had an opportunity to respond, and whether a support person was reasonably allowed.
Small businesses (fewer than 15 employees) also need to consider the Small Business Fair Dismissal Code. If you reasonably believe on reasonable grounds that serious misconduct occurred, the Code may support genuine summary dismissal - but process still matters.
Follow A Fair Process (Even For Summary Dismissal)
Even where an issue seems clear-cut, a fair and reasonable process protects your business and strengthens your position if the dismissal is challenged.
1) Move Quickly, But Investigate
Act promptly to secure evidence and manage risks. Where needed, consider suspending an employee pending investigation on full pay to maintain workplace safety and integrity of evidence while you investigate.
2) Put The Allegation To The Employee
Provide a concise summary of the allegation(s), relevant dates, and key evidence. Invite a written and/or meeting response, allow a reasonable time to reply, and offer a support person.
Often, you’ll use a formal letter to set this out. A structured process and the right templates (such as a show cause letter) help ensure you tick the boxes.
3) Consider The Response
Genuinely consider what the employee says. If new issues arise, follow up. If the evidence supports serious misconduct, you can proceed to dismissal. If it doesn’t, consider alternatives (warning, training, or a performance plan).
4) Decide And Communicate In Writing
Set out the reason for dismissal, the effective date, what will be paid, and post-employment obligations (confidentiality, restraints). Where serious misconduct is confirmed, termination is usually effective immediately and without notice, but you must still finalise outstanding entitlements (see below).
5) Secure Systems And Property
Promptly remove system access, collect keys and equipment, and remind the employee of ongoing confidentiality obligations. Maintain a respectful, discreet approach to minimise workplace disruption.
Tip: Your Employment Contract and policies should clearly define serious misconduct, set out disciplinary processes, and confirm post-employment obligations. Clear documentation reduces disputes about fairness and expectations.
What Do You Need To Pay On Termination?
If an employee is dismissed for serious misconduct, you generally don’t need to provide notice or pay in lieu of notice. However, you must still pay:
- Wages up to the last day worked
- Accrued but untaken annual leave (and leave loading if applicable)
- Any outstanding allowances, commissions or entitlements earned
- Superannuation on ordinary time earnings (OTE) up to the last day worked
If the conduct doesn’t meet the serious misconduct threshold, notice (or payment in lieu of notice) will be required under the Fair Work Act, any applicable award/enterprise agreement, or the employment contract.
In some cases, you may place an employee on garden leave during the notice period (they remain employed and paid, but don’t attend work). Garden leave isn’t a substitute for summary dismissal - it’s relevant when you’re providing notice rather than terminating immediately.
Common Risks And How To Avoid Them
Instant dismissal carries legal risk if you misjudge the conduct or skip procedural fairness. Here are common pitfalls and how to manage them.
Unfair Dismissal Risk
Employees who have completed the minimum employment period (usually 6 months, or 12 months for small businesses) can bring unfair dismissal claims. The FWC will assess whether there was a valid reason and whether the process was fair under the section 387 factors. Keep thorough records of your investigation, evidence, and decision-making.
General Protections (Adverse Action)
Even if someone hasn’t met the minimum period for unfair dismissal, they can still bring a general protections claim if the dismissal was for a prohibited reason (e.g. exercising a workplace right, discrimination, or temporary absence due to illness). Separate the alleged misconduct from any protected attributes or activities, and document your reasoning.
Inconsistent Treatment
If similar conduct in the past was met with only a warning, sudden summary dismissal can look inconsistent (and unfair). Ensure your approach aligns with policies and past practice, or clearly record why the case is different (e.g. higher risk, more serious consequences).
Skipping Procedural Steps
Not giving the employee a chance to respond - even in serious cases - is a frequent reason dismissals are found unfair. Build a simple, repeatable disciplinary process, supported by an up-to-date Staff Handbook and disciplinary policy. If you need to remove someone from the workplace immediately for safety or integrity reasons, use suspension while you follow due process.
Using Probation As A Shortcut
Probationary periods don’t override your legal obligations. While unfair dismissal access might not apply until after the minimum employment period, other claims can still arise during probation. If you’re considering termination in this context, apply a fair process and be mindful of your obligations. For clear policies and documents, many employers rely on an Employee Termination Documents Suite to manage risk consistently.
What Should Be In Your Policies And Contracts?
The best protection against disputes is setting clear expectations from day one. Written terms make it easier to act quickly and fairly if something goes wrong.
- Employment Contract: Define serious misconduct, set out notice provisions, confirm lawful and reasonable directions, confidentiality, IP ownership and post-employment restraints. A well-drafted Employment Contract gives you firmer ground in a disciplinary process.
- Code of Conduct & Disciplinary Policy: Spell out unacceptable behaviour (e.g. violence, harassment, theft), investigation steps, and potential outcomes (warnings, demotion, summary dismissal).
- WHS Policy: Clarify safety obligations for everyone. Serious WHS breaches often underpin instant dismissal - clear rules help demonstrate reasonableness.
- IT & Email/Communications Policy: Cover acceptable use, security, privacy and monitoring, so misuse or data breaches can be addressed decisively.
- Confidentiality & Conflict of Interest: Reinforce duties to protect information and disclose conflicts, and set consequences for breaches.
- Investigation & Show Cause Templates: Use clear, compliant letters and checklists to maintain fairness (for example, a structured show cause process and suspension letters).
Where allegations are serious but not yet proven, consider interim measures like suspension pending investigation to preserve a fair process and workplace safety. You can learn more about this option in our guide on suspending an employee pending investigation.
Practical Steps: From Allegation To Decision
Use this simple flow to guide your decision-making:
- Secure the situation: If there’s an immediate risk, remove the employee from duties (consider paid suspension). Secure systems, evidence and witnesses.
- Gather facts: Collect documents, CCTV, logs, and statements. Be objective and keep notes.
- Notify the employee: Provide the allegation in writing, attach or reference key evidence, and invite a response. Allow a support person.
- Assess the response: Consider explanations and mitigating factors. If needed, investigate further.
- Decide outcome: If serious misconduct is established, confirm summary dismissal; otherwise, consider notice, payment in lieu, garden leave, or a warning.
- Communicate and close out: Issue the termination letter, pay final entitlements, recover property, and remind the employee of ongoing obligations (confidentiality, restraints).
If you need to preserve a relationship (for example, when conduct doesn’t justify summary dismissal), garden leave can help manage risk during the notice period - see our overview of garden leave.
Key Takeaways
- Instant dismissal is lawful only for serious misconduct and when you follow a fair, defensible process.
- Always investigate, put allegations to the employee, allow a response, and document your reasoning before deciding.
- For serious misconduct, notice is not required - but you must still pay wages to the last day worked and accrued entitlements.
- Unfair dismissal and general protections risks are real; the FWC will look at your reason and the fairness of your process under section 387.
- Strong foundations - a clear Employment Contract, policies, and investigation templates - make urgent decisions faster and safer.
- When in doubt, consider suspension pending investigation, or provide notice or payment in lieu rather than rushing to summary dismissal.
If you’d like a consultation on managing instant dismissal or setting up your termination process, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
