Unlawful Termination Lawyers in Australia

Ending someone’s employment is one of the toughest calls you’ll make as a business owner. It’s also one of the riskiest if it’s not handled properly.

Beyond unfair dismissal claims, employers can face “unlawful termination” or “general protections” claims under the Fair Work Act 2009. These matters can be high-stakes, time-sensitive and reputation-sensitive-so it’s important to know when to involve unlawful termination lawyers and how to manage risk from day one.

In this guide, we’ll step through what “unlawful termination” means in Australia, how it differs from unfair dismissal, practical steps to reduce your risk, and when it’s smart to get specialist help. Our goal is to help you act lawfully and fairly while protecting your business.

What Is Unlawful Termination In Australia?

Unlawful termination generally refers to ending employment for a prohibited reason under the Fair Work Act. This often overlaps with “general protections” claims (also called “adverse action”), where an employee alleges you took action against them because they exercised a workplace right or due to protected attributes.

Common “Prohibited Reasons” Include:

• Discrimination based on protected attributes (e.g. race, sex, age, disability, pregnancy, family or carer’s responsibilities, religion, etc.).
• Temporary absence from work due to illness or injury, where legally protected.
• Union membership or non-membership, or participation in lawful industrial activity.
• Exercising workplace rights (for example, making a complaint or inquiry about their employment, taking leave, or asking about pay or conditions).
• Parental leave or requesting flexible working arrangements.

Unlike unfair dismissal-which mostly looks at whether the dismissal was “harsh, unjust or unreasonable”-unlawful termination and general protections claims focus on your reasons and motivations. If a prohibited reason was a substantial or operative reason for the dismissal, your business may face significant remedies (compensation, penalties, or reinstatement).

Unlawful Termination Vs Unfair Dismissal: Why The Difference Matters

These two claim types are often confused, but they’re not the same-and your strategy differs for each.

Unfair Dismissal (Process and Reasonableness)

The Fair Work Commission considers whether the dismissal was harsh, unjust or unreasonable. It looks closely at process (e.g. whether there was a valid reason related to capacity or conduct and whether the employee had a chance to respond). If you’re weighing up process questions, the factors in section 387 of the Fair Work Act offer a useful checklist for employers.

Unlawful Termination / General Protections (Prohibited Reasons)

Here, the question is whether a prohibited reason (like discrimination or exercising a workplace right) was a real reason for the dismissal. The burden of proof can effectively shift to the employer to show the action was not taken for a prohibited reason. This flips the risk profile for small businesses.

Key practical takeaway: good process helps in both scenarios, but in general protections claims, you must be able to evidence your reasons clearly and show they were legitimate (e.g. performance, conduct, role genuine redundancy) and not linked to a prohibited reason.

When Should You Engage Unlawful Termination Lawyers?

You don’t need a lawyer for every performance chat. But there are clear moments when getting advice early can reduce risk, save costs and prevent escalation.

High-Risk Triggers

• Protected attributes or circumstances are in play (e.g. pregnancy, disability, recent WHS or pay complaint, union involvement, parental leave or a request for flexibility).
• There’s an allegation of discrimination, bullying or adverse action already on foot.
• You’re considering termination shortly after a complaint, grievance or request about workplace rights or entitlements.
• The employee is on extended sick leave or you are considering termination on medical grounds.
• There’s a serious misconduct allegation that may require standing the employee down pending investigation.

Time-Critical Events

• You’ve received a Fair Work Commission application (unfair dismissal or general protections dismissal). Strict deadlines apply for responses and conciliation.
• You need to draft or issue a show cause letter and want to ensure procedural fairness and clear reasoning.
• You’re negotiating exit terms (for example, a separation agreement and deed of release).

In these situations, unlawful termination lawyers can help you assess risk, document legitimate reasons, frame communications, and manage the process so your business is protected.

How To Reduce Your Risk Before Termination

Most disputes are won or lost long before termination day. The real protection is in your setup, documentation and process.

1) Set Clear Expectations Early

Well-drafted contracts and policies create clarity and protect your business. Start with a tailored Employment Contract that sets role duties, performance expectations, notice, confidentiality and post-employment restrictions (where appropriate). Ensure your policies cover conduct, performance management, leave and complaints.

2) Use A Fair Process (And Record It)

When issues arise, run a fair process. That typically means clear written concerns, a chance to respond, support person options, and reasonable timeframes. Written records-meeting notes, emails, and performance plans-are crucial evidence of legitimate reasons unrelated to any prohibited reason.

3) Investigate First, Decide Second

If there are serious allegations (e.g. harassment, theft, safety breaches), pause and investigate. Consider whether a temporary stand down is warranted while you gather facts, as outlined in standing down an employee pending investigation. At the end of the investigation, issue a show cause letter that sets out the findings and invites a response before any decision.

4) Know The Rules For Special Situations

• Probation: You can still face claims even during probation, so handle termination during probation with care and keep records of legitimate reasons.
• Medical Capacity: Where health impacts capacity, assess medical evidence, consider reasonable adjustments, and follow the rules for medical incapacity terminations.
• Redundancy: Ensure the role is genuinely no longer required, consult as required, consider redeployment, and document your analysis. A sham redundancy invites challenge.

5) Consider Alternatives To Immediate Termination

Sometimes, garden leave, performance improvement plans, or agreed exits (with a deed of release) are safer pathways than immediate termination. If you need to remove access and wind down duties, garden leave can be appropriate where supported by the contract.

Managing The Termination Process Step By Step

Below is a practical framework to help you make defensible decisions. Your exact process will depend on the employment type, any applicable award, and your policies-so tailor as needed.

Step 1: Clarify The Reason

Write down the lawful reason for considering termination (e.g. sustained poor performance, substantiated misconduct, genuine redundancy). Confirm it is not linked to a prohibited reason. If timing overlaps with a complaint or protected leave, seek advice before proceeding.

Step 2: Gather Evidence

Collect performance records, investigation findings, warning letters, and meeting notes. Ensure communications are accurate and professional-if a matter proceeds, this file becomes your evidence that the reason was legitimate and your process was fair.

Step 3: Invite A Response (Show Cause)

Provide a clear show cause letter that sets out the concerns, key evidence, and potential outcomes, and offer a reasonable opportunity to respond. Our guide to show cause letters outlines the essentials.

Step 4: Consider Responses And Decide

Genuinely consider the employee’s response and any new information. If the concerns still warrant dismissal, decide whether notice will be worked, paid out, or whether summary dismissal for serious misconduct applies. If you’re paying notice, check your obligations regarding payment in lieu of notice.

Step 5: Communicate The Outcome

Issue a termination letter that states the reason (if required), effective date, notice/payment details, return of property, and next steps. Keep the language clear and respectful.

Step 6: Finalise The Exit Cleanly

Calculate final pay and entitlements correctly. Be careful about deductions and withholding-there are strict limits, as covered in our guide on withholding pay from employees. Consider offering a deed of release via an employee separation agreement to resolve matters and reduce future dispute risk.

Helpful Tools

If you need practical templates and lawyer support for each stage, our Employee Termination Documents Suite can streamline your process and help ensure compliance.

Responding To A Claim: What To Expect

If a former employee lodges an application, there are strict deadlines-so move fast and stay calm. Early, well-structured responses often lead to better outcomes at conciliation.

Unfair Dismissal Conciliation

You’ll usually attend a phone or online conciliation through the Fair Work Commission. Be prepared with your key documents, timeline of events, and the legitimate reason for dismissal. Understanding the section 387 factors can help you frame your position around valid reason and procedural fairness.

General Protections (Adverse Action)

These claims focus on prohibited reasons. The employer will need to evidence that the decision was made for lawful reasons unrelated to protected attributes or workplace rights. Thorough records of your decision-making process, performance discussions and investigation steps will be critical.

Managing Settlement Discussions

Many matters resolve at or shortly after conciliation. A deed of release is commonly used to finalise terms (such as a settlement sum, statements of service, and non-disparagement). If you anticipate settlement, plan ahead for a clean, enforceable exit via an Employee Separation Agreement.

Avoiding Common Pitfalls

• Rushing to terminate immediately after a complaint-this timing can look like adverse action.
• Not investigating allegations properly before making a decision.
• Using inconsistent or shifting reasons for termination.
• Relying on verbal warnings only-written records are your best defence.
• Asking inappropriate questions during recruitment that later feed a discrimination claim; refresh your team on illegal interview questions to prevent issues upstream.

Special Scenarios Employers Ask About

Can We Terminate During Probation Without Risk?

Probation doesn’t make you immune from claims. You should still follow a fair process and document lawful reasons. Our guide to termination during probation covers what to consider if you need to end employment early.

Is Garden Leave A Safe Option?

Often, yes-if your contract allows it. It can protect your business by removing access to clients or systems while keeping pay flowing. Make sure your garden leave terms are drafted clearly in the contract.

What If The Employee Can’t Perform The Role For Medical Reasons?

Medical incapacity requires a considered, evidence-based approach. Seek medical information, consider reasonable adjustments, and follow a procedurally fair process before deciding on termination. See our guide to termination on medical grounds for a step-by-step overview.

Should We Offer Payment In Lieu Of Notice?

Where permitted, paying out notice can sometimes reduce disruption and risk, but there are rules on how this works and who is eligible. Check your obligations around payment in lieu of notice and your contract terms before deciding.

What Documents And Policies Help Prevent Disputes?

A strong legal foundation reduces risk and gives your managers a clear playbook. Consider the following core documents.

• Employment Contract: Role duties, performance standards, notice, confidentiality, IP ownership and restraints-start with a tailored Employment Contract.
• Workplace Policies: Code of conduct, performance management, leave, grievance/complaints and investigations-kept up to date and applied consistently.
• Performance Management Tools: Warning templates, PIP plans and show cause letters.
• Investigation Framework: Guidance for impartial fact-finding, including when to consider a stand down pending investigation.
• Termination Pack: Letters and checklists covering notice, final pay, property returns, and options like our Employee Termination Documents Suite.
• Exit Agreements: Where appropriate, an Employee Separation Agreement and deed of release to finalise the relationship and reduce future risk.

Not every business needs every document on day one, but most will need a combination of these. The key is tailoring them to your operations and applying them consistently.

Key Takeaways

• Unlawful termination focuses on prohibited reasons (like discrimination or adverse action), which is different from unfair dismissal’s “harsh, unjust or unreasonable” test.
• For employers, the best defence is preparation: clear contracts, fair process, careful investigations and thorough records of legitimate reasons.
• Engage unlawful termination lawyers early when protected attributes, complaints, medical issues or serious misconduct are in play, or when a claim is lodged.
• Follow a step-by-step termination process-show cause, consider responses, decide lawfully, and finalise notice or payout correctly.
• Use tailored documents-Employment Contracts, show cause letters, investigation and termination templates, and separation agreements-to reduce risk and maintain consistency.
• If a claim arises, move fast, prepare your evidence and consider commercial settlement via a deed of release where appropriate.

If you’d like a consultation with unlawful termination lawyers about managing risk or responding to a claim, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.