An unfair dismissal occurs when an employer terminates the employment of an employee unfairly which is defined in the national fair work system as being harsh, unjust or unreasonable especially if the dismissal was without a valid reason for it.
The Fair Work Commission may order a remedy to the dismissed employee by reinstatement and financial compensation, although reinstatement is very rare.
All States other than Western Australia (which retains an industrial tribunal which deals with these claims against sole traders) have handed over their legislative powers over fair work laws to the Commonwealth except for State government agencies.
In all jurisdictions unfair dismissal claims are processed first by an attempt to resolve them by agreement (called “conciliation”) and then if necessary by arbitration which is a contested hearing.
Unlike legal proceedings in courts, the fair work tribunals do not order the loser to pay the winner’s costs unless the case has been pursued vexatiously or frivolously.