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When you’re running a business and managing employees, you want every step – from hiring to parting ways – to be straightforward and legally secure. But in reality, employee terminations aren’t always simple, and knowing the difference between unfair dismissal and general protections claims is crucial for avoiding costly mistakes. As an employer in Australia, it’s your responsibility to understand where these legal risks overlap and where they diverge, so you can protect your business and treat your workers fairly.
It’s normal to feel uncertain, especially if you’ve never navigated a termination or had a claim brought against your company. But the good news? With clear knowledge and proactive measures, you can confidently tackle these challenges and foster a better workplace for everyone involved. In this guide, we’ll break down unfair dismissal vs general protections, answer your pressing questions, and outline practical steps every Australian employer should take. Whether you’re a small business owner or growing startup, this is your must-read roadmap to staying on the right side of employment law.
What Is Unfair Dismissal?
Let’s start with the basics: unfair dismissal is when an employee is dismissed from their job in a manner that the Fair Work Commission (FWC) deems “harsh, unjust, or unreasonable.” In other words, it’s about whether the process and reasons for ending someone’s employment were fair.
Common examples of unfair dismissal include cases where:
- The real reason for dismissal isn’t valid (for instance, slightly underperforming without prior warnings or not meeting impossible targets).
- The process wasn’t followed correctly (such as not giving the employee a chance to respond to allegations).
- The employer failed to consider factors like the employee’s length of service or personal circumstances.
For an employee to qualify to make an unfair dismissal claim, certain thresholds must be met. Usually, they must:
- Have worked for your business for at least 6 months (or 12 months for small businesses with fewer than 15 employees).
- Be covered by a modern award or enterprise agreement, or earn under the high-income threshold set by the Fair Work Act 2009 (which changes yearly).
Keep in mind, there are some exemptions (for instance, genuine redundancies handled correctly usually aren’t considered unfair dismissals).
What Are General Protections?
General protections are a set of broad legal rights under the Fair Work Act that protect employees, prospective employees, independent contractors, and even some business owners from adverse actions (such as dismissal, demotion, or discrimination) because of their workplace rights, industrial activities, or certain personal attributes.
Some examples where general protections apply include:
- Dismissing an employee because they made a complaint about their working conditions (called exercising a “workplace right”).
- Retaliating against a worker for taking sick or parental leave, or for union involvement.
- Discriminating against someone for protected reasons, such as sex, age, race, disability, religion, or political opinion.
General protections claims can arise whether or not a person has been dismissed. For example, they also apply to negative actions taken while someone is still employed or even before they’ve started (such as during recruitment).
Unfair Dismissal vs General Protections: What’s the Difference?
It’s easy to get these two legal concepts mixed up because both are meant to protect employees from unfair treatment. However, there are key differences every employer should know:
- Unfair dismissal mainly focuses on whether the termination itself was fair, reasonable, and properly executed. It is a process-driven claim mapped specifically to the circumstances of the dismissal.
- General protections claims are about prohibiting ‘adverse actions’ – including dismissal – that are taken for prohibited reasons, such as retaliation, discrimination, or because someone exercised a workplace right. These claims are motive-driven and can cover a broader range of situations, including actions short of dismissal.
- Remedies and damages can be substantially higher for general protections claims compared to unfair dismissal (for example, there’s technically no cap on the amount that can be awarded for general protections, whereas there is a cap for unfair dismissal).
- Not every employee is eligible to bring both types of claims – for instance, general protections cover a wider range of workers, while unfair dismissal (as above) has specific eligibility requirements.
Understanding this distinction is vital. A dismissal could be fair in process, but still breach general protections if, for example, it was done because the employee raised a health and safety issue (a protected right).
Who Can Make an Unfair Dismissal or General Protections Claim?
Unfair Dismissal Claims
Employees generally need to have completed a minimum period of service, and not earn over the high-income threshold. The claim must be lodged within 21 days of their dismissal. Contractors and some other categories (like volunteers and business owners) are excluded.
General Protections Claims
These are open to a much wider range of people, including employees (regardless of time served or income), some contractors, prospective employees, and others covered by the Fair Work Act. There’s also a tight 21-day filing deadline, but crucially, there is no “minimum period” or earnings cap to be eligible.
For a practical example, let’s say you terminate an employee on the day they return from unpaid parental leave. Regardless of their length of service or salary, they may bring a general protections claim if they believe the real reason for termination was their leave (a protected attribute), not their performance.
What Is ‘Adverse Action’ Under General Protections?
Adverse action isn’t just about firing someone. Under the general protections regime, it covers any action that disadvantages an employee or contractor. This could mean:
- Termination of employment
- Demotion or reduction in pay or hours
- Altering a person’s position to their detriment
- Refusing to hire, or injuring someone in their employment
The critical point is motive: if an adverse action is taken for a prohibited reason (such as because the employee filed a complaint, took leave, or was involved in a union), it’s likely to be unlawful even if, on the surface, there were ‘good business reasons’ for the dismissal. The onus generally falls on the employer to prove the action was not taken for a prohibited reason.
What Legal Steps Should Employers Take to Avoid Problems?
Staying compliant with Australian employment law is easier when you have a clear structure for handling terminations and workplace issues. Here’s what we recommend:
- Document everything: Keep thorough written records of performance issues, warnings, discussions, and the reasons for termination. This evidence is crucial if you ever need to defend a claim.
- Follow a fair process: Use a proper procedure for performance management and dismissal, such as formal warnings, opportunities to improve, and providing a chance for the employee to respond. Our guide to performance management has practical tips.
- Be objective and consistent: Make sure the reasons for disciplining or terminating staff are consistent across your workforce, and don’t single out individuals based on protected attributes or workplace rights.
- Consult workplace policies: Review your own staff handbook, anti-discrimination, and workplace policies to make sure they’re up-to-date. This helps guide both you and your team.
- Get legal advice early: If you’re ever unsure whether a termination might trigger risks under unfair dismissal or general protections, it’s a wise move to consult an employment lawyer before taking action.
Managing performance and ending employment isn’t just about ticking boxes – it’s about treating staff fairly and having solid, legally-sound processes that stand up to scrutiny.
How Do Claims Work – And What Are the Risks?
Unfair Dismissal Process
Unfair dismissal claims are made to the Fair Work Commission. If a claim is accepted, the FWC usually encourages a conciliation first, where both sides try to resolve the matter informally. If unresolved, it can move to a formal hearing. If the employer is found in the wrong, possible outcomes include reinstatement or compensation (capped by law at 26 weeks’ pay).
General Protections Process
General protections claims also begin with the FWC, but the stakes can be much higher. If not resolved by conciliation, matters can escalate to the Federal Circuit and Family Court or Federal Court. Here, penalties and compensation are uncapped and can cover not only lost wages but also distress, hurt, and (in rare but serious cases) punitive damages. There are also substantial civil penalties for the employer, and in some cases, for individuals involved in the decision-making.
In both cases, poor documentation and unclear processes dramatically increase the risk for your business. If you’re facing a claim, having clear records and evidence showing a fair and lawful process is your strongest defence.
What Are the Legal Documents and Policies Employers Should Have?
The best way to minimise risk is by having the right documentation in place well before a dispute arises. Some of the most important include:
- Employment Agreement: A clear contract with each staff member outlining their role, responsibilities, and termination conditions. Learn more about employment contract requirements.
- Workplace Policies & Handbook: Comprehensive documents that set out performance expectations, complaints procedures, anti-bullying, discrimination, and harassment policies. A staff handbook is a valuable resource for all businesses.
- Performance Management Procedures: Having a written process for how you’ll handle underperformance is invaluable if you ever need to defend a dismissal. See our guide to performance reviews.
- Termination Letter Templates: Use correct, compliant documentation to confirm terminations. This adds clarity and creates a record.
- Records of All Warnings, Meetings, and Decisions: Evidence matters – keeping a paper trail can make or break your case if a claim is filed.
Having these documents tailored to your business’s operations and risks is always a good investment. If you’re missing any of these, our legal team can help you get set up quickly.
Practical Tips: Proactively Reduce Your Legal Risk
You can’t always avoid employee disputes, but you can make yourself less vulnerable with a few key practices:
- Train your managers: Managers and supervisors should understand the basics of unfair dismissal and general protections, so they don’t inadvertently expose your business to risk.
- Treat staff respectfully: Fair processes and open communication build goodwill and help resolve problems before they escalate into claims.
- Don’t ignore complaints: If a staff member raises a workplace issue, take it seriously, investigate promptly, and document the steps taken.
- Consult with a lawyer when unsure: Don’t wait until a claim hits your desk. Getting advice early in a potential termination or dispute is always better – and generally cheaper – than trying to fix an issue after the fact.
- Review your contracts and policies annually: Employment law is constantly evolving. Make sure your documentation keeps pace with legal changes and your business needs.
Establishing strong foundations now will not only protect your business, but will also contribute to a more positive, compliant, and productive workplace culture.
Common FAQs on Unfair Dismissal and General Protections
Can An Employee Bring Both an Unfair Dismissal and a General Protections Claim?
Generally, employees must choose which claim to pursue in relation to a dismissal. They can file both initially, but usually must opt for one before the case progresses. Some exceptions exist – if you’re unsure, get advice from an employment lawyer.
Are Casual Employees Covered?
Regular and systematic casuals (with a reasonable expectation of ongoing work) may be eligible for both types of claims, but there are nuances. Review your arrangements carefully and ensure compliance with casual conversion rules.
How Long Do Employees Have to Make a Claim?
In most cases, employees have 21 days from the date of the adverse action or dismissal to file a claim. Extensions are rare and only granted in exceptional circumstances.
Do Contractors Have General Protections?
Yes, some contractors (including independent contractors) are protected under the general protections provisions. However, they cannot bring an unfair dismissal claim.
Do I Need a Lawyer to Respond to a Claim?
While not legally required, strong legal representation is always recommended. Employment law is complex, and a misstep can have serious consequences for your business.
Key Takeaways
- Unfair dismissal and general protections are two distinct legal claims employees can bring if they feel they have been treated unlawfully at work.
- Unfair dismissal is mostly about fair process during terminations, while general protections are about adverse action for prohibited reasons, including discrimination and retaliation.
- Documenting your employment decisions and processes, and following a fair, transparent pathway is your best risk management tool.
- Having up-to-date contracts, clear workplace policies, and training for managers helps prevent legal headaches and builds a better workplace.
- Consulting with a legal expert early is the smartest step you can take if you’re unsure – prevention really is better than cure.
- Handling dismissals or employee disputes the right way protects your business, reduces risk, and helps maintain a positive reputation in the long run.
If you’d like a consultation on unfair dismissal vs general protections or need help reviewing your current policies, contracts, or a pending workplace issue, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat. We’re here to help you navigate employment law with confidence and clarity.
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