Unfair Dismissal Outcomes in NSW – What Can Be Sought?

Question of the Month

BY BRYDENS LAWYERS | Feb 09, 2026

If you have been dismissed from employment and believe that it was unfair, it is important to understand what outcomes can be sought if you wish to pursue an Unfair Dismissal claim in NSW. The Fair Work Commission has the power to order specific remedies, depending on the circumstances of the dismissal and the employee’s eligibility to bring a claim.

What is an Unfair Dismissal Claim?

An unfair dismissal claim is a claim made under the Fair Work Act 2009 where an employee alleges that their dismissal was harsh, unjust or unreasonable. The Fair Work Commission can order different types of Unfair Dismissal remedies. It is important to note that the criteria for same is strict and that time limits apply. The options generally offered to a successful litigant will be compensation, reinstatement or other negotiated settlement outcome. It is highly recommended to seek out an employment lawyer for an Unfair Dismissal claim in NSW.

What outcomes can be sought in an Unfair Dismissal claim?

Many employees, following termination of their employment, will seek legal advice as to whether there is any recourse available to them when they believe that the termination of their employment has been unfair. The two main outcomes that can be sought by a dismissed employee in an Unfair Dismissal application include reinstatement and compensation.

An unfair dismissal claim in NSW is determined by the Fair Work Commission, which will assess whether the dismissal was harsh, unjust or unreasonable and, if so, what remedy is appropriate.

Unfair Dismissal claim eligibibilty in NSW

To make an unfair dismissal claim in NSW, an employee must generally satisfy eligibility requirements relating to minimum employment period, coverage by the national workplace relations system, and income thresholds. Applications must usually be lodged with the Fair Work Commission within 21 days of dismissal.

Possible outcomes at the Fair Work Commission

The Fair Work Commission has limited but important powers when determining unfair dismissal remedies. The primary remedies available are reinstatement and compensation.

Reinstatement

An order for reinstatement in an Unfair Dismissal claim in NSW means that the employer must either:

  1. Reappoint the person to the same position; or

  2. Appoint the person to another position within the company with terms and conditions that are no less favourable than those on which the person was employed prior to the dismissal.

Reinstatement is considered the primary remedy in unfair dismissal claims and will be considered before compensation. The Fair Work Commission must assess whether reinstatement is appropriate in the circumstances of the dismissal.

When reinstatement may not be ordered

The primary remedy is generally reinstatement and is considered before compensation. Reinstatement can, however, be an inappropriate remedy in some circumstances including where:

  • The position that was previously occupied by the employee is no longer available;

  • The employer has lost trust and confidence in the employee; and

  • The employee can no longer work due to an illness or injury.

Compensation

An order for compensation is designed to compensate an unfairly dismissed employee for losses reasonably attributable to the unfair dismissal. Compensation is usually ordered where reinstatement is not appropriate. In determining unfair dismissal compensation in NSW, the Commission will assess a range of statutory factors. The Fair Work Commission will consider the following circumstances in determining the amount of compensation:

  • The length of the employee’s employment;

  • The wages that the employee would likely have received if he/she was not dismissed; and

  • Any efforts by the employee to mitigate his/her losses such as applying for a new job.

In such circumstances the Commission would prefer to make an order for compensation which will be determined by having regard to various factors vis a vis the nature and circumstances surrounding the dismissal.

How is Unfair Dismissal compensation calculated?

Unfair Dismissal compensation in NSW varies depending on several factors, but the maximum compensation that can be awarded by the Commission is 26 weeks’ pay in addition to your statutory leave and other entitlements.

This statutory unfair dismissal compensation cap applies regardless of the employee’s length of service and is subject to further adjustments based on mitigation, contributory conduct, and other relevant considerations.

Other negotiated settlement options

In some unfair dismissal claims, outcomes may also be resolved by agreement between the parties, including negotiated settlements reached through conciliation at the Fair Work Commission. These may involve compensation, statements of service, or other agreed terms.

How Brydens Lawyers can help you analyse your options

Brydens Lawyers are experts in the prosecution of unfair dismissal claims on behalf of employees. If you, or someone you know, has been terminated by their employer, and you believe it to be unfair, contact Brydens Lawyers now for an employment law review of your dismissal case. Alternatively, call 1800 848 848.

Strict time limits apply when making an Unfair Dismissal claim, so do not delay. At Brydens Lawyers-#WEDO unfair dismissal claims.

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