When does a dismissal take effect?


The Fair Work Commission has a strict 21-day limit for an application to be lodged after a dismissal takes effect, with only exceptional circumstances warranting an extension. For this reason, it is important to know when your termination of employment has taken effect to ensure you lodge your application within the 21-day limit.


How do you know when a dismissal has taken effect? 

For a dismissal to take effect, an employer must communicate it to the impacted employee. Notice should, in most circumstances, be provided in writing and cannot take effect before the day the notice is given to the employee. For example, if an employee is notified of their dismissal on 16 February, the effective date cannot be 14 February. Employers can subject an employee’s termination to conditions such as a future date, provided the conditions are expressed clearly to the employee within the notice provided.

The date a dismissal takes effect will depend on whether the employee works out their notice period or receives payment in lieu of notice. When an employee receives notice of their termination and works out the notice period, the dismissal will generally take effect on the last day of that notice period. By contrast, if an employee receives payment in lieu of working out the notice period, the dismissal will usually take immediate effect. Terms of an employee’s contract may also affect when termination of employment can take effect.


Ayub v NSW Trains 

In November 2015, Mr Ayub received notification from NSW Trains (his employer) of a preliminary decision to terminate his employment. He was informed that he had a right to seek a review of this decision within 14 days, which he requested. In the letter, NSW Trains notified Mr Ayub the dismissal would be effective from 7 December 2015 or from the date of the review outcome letter, whichever one was the latter date.

NSW Trains conducted the review, deciding on 13 January 2016 to uphold the termination decision effective 14 January 2016. NSW Trains alleged they made various attempts between 14-18 January to inform Mr Ayub of his dismissal, which Mr Ayub did not see until 19 January 2016. Once aware of his termination, Mr Ayub filed an unfair dismissal application on 8 February 2016.

At first instance, the Fair Work Commission was satisfied that the date of termination was 14 January 2016, so the application was lodged outside of the 21-day period. Mr Ayub appealed on the basis that his application was not out of time as a dismissal only takes effect when communicated to the employee, which occurred on 19 January 2016 when Mr Ayub opened and read the email containing his dismissal letter. NSW Trains submitted that its November letter constituted notice of the dismissal.

The Full Bench held that the dismissal could not take effect, therefore the 21-day period could not begin before an employee became aware that they had been dismissed or at least had a reasonable opportunity to become aware of this. While NSW Trains had indicated to Mr Ayub in the November letter that his dismissal could be effective at a future date, the second date was not clearly expressed within the notice as is required. As a result, NSW Trains’ email to Mr Ayub on 18 January 2016 was the earliest the dismissal could take effect, and the unfair dismissal application was lodged within 21 days.


Disclaimer: This article should not be construed as legal advice and is not intended as such. If readers wish to obtain advice about anything contained in this article, they should speak with a lawyer and discuss their individual circumstances.