Last Updated on 19/09/2025 by Damin Murdock
Unfair dismissal claims are common in hospitality because of the industry’s reliance on a large, casualised workforce, high turnover rates, and the intense demands placed on staff. It is not unusual for tensions to arise between employees and managers, leading to dismissals that may later be challenged at the Fair Work Commission. To assess whether a dismissal is unfair, the Commission applies the test of whether the dismissal was harsh, unjust, or unreasonable under section 387 of the Fair Work Act 2009 (Cth) (the Act). Understanding these terms and how they are applied in practice is critical for hospitality employers who wish to minimise their legal risks.
Unreasonable and Harsh Dismissal
A dismissal may be harsh if the consequences for the employee are disproportionate to the misconduct or poor performance. For example, dismissing a long-serving bartender for a single instance of minor rudeness to a customer may be seen as overly severe.
A dismissal is unjust if the employee was not guilty of the conduct or performance failures alleged by the employer. If a chef is dismissed for allegedly failing to follow food safety standards but later evidence shows they complied with the relevant policies, the dismissal could be deemed unjust.
A dismissal is unreasonable if it was based on conclusions that no reasonable employer could reach. For instance, dismissing an employee for theft without sufficient evidence or investigation could be found unreasonable.
Procedural Factors to Consider
The Commission considers a range of procedural factors when applying this test. These include whether there was a valid reason related to capacity or conduct, whether the employee was notified of the reason, whether they were given an opportunity to respond, whether the employer allowed the presence of a support person at meetings, whether the employee had previously been warned about performance concerns, and the size and resources of the business.
Hospitality employers with limited HR expertise may be given some leeway on procedural deficiencies, but they are still expected to demonstrate fairness in the process. Case law illustrates that dismissals can be harsh because of their consequences, unjust because the employee is not guilty, or unreasonable because the decision is based on untenable conclusions. Further, the Commission has held that a dismissal is unfair because the employee was not given an opportunity to improve performance. Conversely, dismissals have been upheld where employers issued repeated warnings, provided training, and documented clear performance concerns.
For hospitality employers, the risks of failing to meet these standards are significant. The Commission may order reinstatement, compensation, or both, and employers may also suffer reputational damage.
Practical Steps
- ensuring dismissals are based on valid and well-documented reasons,
- issuing written warnings, allowing opportunities for improvement,
- offering a support person at disciplinary meetings, and
- documenting all steps taken.
Employers should also seek advice before dismissing long-serving employees or those with mitigating personal circumstances, as the Commission will consider the human impact of dismissal.
Bottom line
To avoid unfair dismissal claims, hospitality employers must focus not only on whether there is a valid reason to dismiss but also on whether the process and outcome are fair, proportionate, and reasonable.
Feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube , LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favourable Google Review.
DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article and if you require specific legal advice, please contact us.
Damin Murdock (J.D | LL.M | BACS - Finance) is a seasoned commercial lawyer with over 17 years of experience, recognised as a trusted legal advisor and courtroom advocate who has built a formidable reputation for delivering strategic legal solutions across corporate, commercial, construction, and technology law. He has held senior leadership positions, including director of a national Australian law firm, principal lawyer of MurdockCheng Legal Practice, and Chief Legal Officer of Lawpath, Australia's largest legal technology platform. Throughout his career, Damin has personally advised more than 2,000 startups and SMEs, earning over 300 five-star reviews from satisfied clients who value his clear communication, commercial pragmatism, and in-depth legal knowledge. As an established legal thought leader, he has hosted over 100 webinars and legal videos that have attracted tens of thousands of views, reinforcing his trusted authority in both legal and business communities."
