Unfair dismissal compensation and remedies

If the Fair Work Commission finds that your dismissal was unfair, it can order reinstatement (your job back), compensation (payment for lost income), or both under sections 390–392. Reinstatement is the remedy the Act expects the Commission to consider first. In practice, many resolved matters end in compensation rather than returning to the same workplace.

Reinstatement means returning you to the job you lost, with continuity of employment where appropriate. The Commission must consider reinstatement before compensation, but it is not common in every workplace or relationship.

Factors such as trust breakdown, the size of the employer, and whether working together is practical can all affect whether reinstatement is realistic. Even when reinstatement is not ordered, compensation may still be available if the dismissal is found to be unfair.

Compensation is intended to compensate for lost income caused by the dismissal — not to punish the employer. The Commission looks at what you would have earned if you had not been dismissed, then may reduce the amount for reasons such as your efforts to find other work or your conduct — see section 392.

There is a statutory cap: the lesser of 26 weeks' pay or $91,550 (half the high income threshold for FY2025-26). Very few applicants receive the maximum cap in practice.

Published Fair Work Commission and research figures suggest most unfair dismissal matters settle at conciliation. Median compensation agreed at conciliation is often cited around $8,704, with median amounts ordered after a formal decision often lower still (around $7,797).

Decision examples commonly fall in a range of about $5,770 to $20,000, often equivalent to roughly 5–7 weeks' pay. Your situation may differ. These figures are general information only, not a prediction of your outcome.

• Your pay level and how long you were likely to remain employed
• Whether you mitigated your loss by looking for other work
• Your conduct before dismissal and during the process
• Whether reinstatement is feasible
• Strength of evidence about why the dismissal happened
• What each side offers or accepts at conciliation

Settlements are not limited to a dollar figure. Parties sometimes agree on a payment, a written reference, a statement of service, confidentiality terms, or other conditions. Anything you agree to at conciliation should be understood before you accept it. Consider getting advice if you are unsure.