Defence Against Unfair Dismissal & Adverse Action Claims for Employers

1 July 2025

Managing employee terminations and workplace disputes is one of the highest-risk areas for employers. A misstep in process, documentation, or timing can quickly lead to an unfair dismissal or adverse action claim—both of which can be costly, time-consuming, and damaging to your business.

Under the Fair Work Act 2009, employees have strong legal protections, and employers must ensure that all decisions relating to dismissal or disciplinary action are fair, lawful, and properly documented.

This guide outlines the key differences between unfair dismissal and adverse action claims, how they arise, and how employers can effectively defend them.

What Is an Unfair Dismissal Claim?

An unfair dismissal claim occurs when an employee alleges their termination was harsh, unjust, or unreasonable.

These claims are heard by the Fair Work Commission, which assesses both the reason for dismissal and the process followed.

From an employer’s perspective, the Commission will consider:

  • Whether there was a valid reason for dismissal (e.g. misconduct, poor performance, or redundancy)
  • Whether the employee was notified of the concerns
  • Whether they were given a genuine opportunity to respond
  • Whether appropriate warnings or procedural steps were followed
  • Whether the outcome was proportionate

Importantly, even if there is a valid reason, a dismissal can still be found to be unfair if the process lacks procedural fairness. This is where many employers become exposed.

What Is an Adverse Action (General Protections) Claim?

An adverse action claim occurs when an employee alleges they were treated unfavourably because of a protected reason under the Fair Work Act 2009.

Adverse action can include:

  • Termination of employment
  • Demotion or changes to duties
  • Disciplinary action
  • Reduction in hours or pay
  • Any conduct that disadvantages an employee

These claims are commonly triggered when:

  • An employee raises a complaint or grievance
  • A workplace issue escalates (e.g. bullying or safety concerns)
  • An employer takes action shortly after an employee exercises a workplace right

For employers, the key challenge is demonstrating—with clear evidence—that your decision was based on legitimate business reasons, not a prohibited motive.

What Is the Difference Between Unfair Dismissal and Adverse Action?

While both claims arise from workplace disputes, they operate differently and carry very different risks.

Unfair Dismissal

Unfair dismissal claims focus on whether the termination itself was fair. They apply only to eligible employees (based on service length and income thresholds), and compensation is capped.

Adverse Action (General Protections)

Adverse action claims fall under the general protections provisions of the Fair Work Act 2009 and are significantly broader.

They arise when an employer takes action against an employee because of a protected workplace right or attribute, such as:

  • Making a complaint or raising a workplace concern
  • Taking leave (e.g. personal, parental, or annual leave)
  • Exercising workplace rights or entitlements
  • Discrimination based on protected characteristics

Key differences for employers:

  • Claims can arise without dismissal
  • There are no caps on compensation
  • The burden of proof shifts to the employer, requiring you to prove your decision was not for a prohibited reason

This reverse onus makes adverse action claims more complex and often higher risk.

How Hentys Lawyers Can Help

Our employment law team is experienced in managing and defending claims brought under the Fair Work Act 2009, including:

Strong Legal Defence Against Adverse Action and Unfair Dismissal Claims

We provide a proactive and strategic defence to ensure your business is protected from false or unjust accusations. Whether you’re responding to an unfair dismissal application or defending an adverse action claim, we:

  • Prepare comprehensive responses and evidence on your behalf
  • Represent you during conciliation, mediation, and hearings
  • Manage communication with the Fair Work Commission or courts
  • Negotiate settlements where appropriate to limit cost and disruption
  • Work to preserve your business’s reputation and minimise internal impact

Our approach is grounded in legal expertise and practical insight into how decisions are made in the workplace.

Legal Guidance Before Claims Arise

The best defence starts before any claim is made. We assist employers with compliance and procedural fairness to minimise the risk of disputes arising in the first place. Our services include:

  • Advice on how to manage terminations lawfully and ethically
  • Ensuring compliance with Fair Work Act obligations, Modern Awards, and National Employment Standards (NES)
  • Drafting or reviewing termination letters, performance management documents, and internal policies
  • Guidance on employee warnings, investigations, and documentation
  • Advising on risk factors associated with protected workplace rights or discriminatory conduct

We help employers make informed decisions that withstand legal scrutiny and avoid unnecessary conflict.

Understanding Unfair Dismissal vs Adverse Action

Employers need to understand the legal difference between these claims:

  • Unfair Dismissal claims arise when an employee alleges their termination was harsh, unjust, or unreasonable.
  • Adverse Action claims typically involve allegations that an employee was treated unfavourably (including dismissal) because of a protected workplace right, such as making a complaint, taking leave, or joining a union.

Adverse action matters often carry higher legal risk, as the burden of proof shifts to the employer. That’s why early legal advice is critical.

Why Choose Hentys Lawyers?

At Hentys, we represent employers only, which means we have a focused understanding of the commercial and legal risks you face. We’re known for our:

  • Expertise in employment law and Fair Work litigation
  • Proactive strategies to minimise exposure and prevent disputes
  • Strong courtroom advocacy and proven negotiation results
  • Responsive, employer-focused support

Whether you’re responding to a claim or trying to prevent one, Hentys Lawyers is the legal partner you can rely on.

Protect Your Business Today

If your business is facing an unfair dismissal or adverse action claim—or you want to reduce the risk of one—speak to our team at Hentys Lawyers today. We’ll provide expert advice and a clear action plan to protect your workplace.

Contact Hentys Lawyers today for expert legal advice and tailored solutions at (03) 8615 4200.