An employee is caught taking cash from the till. Another turns up to a shift clearly drunk. A third shoves a colleague in the car park. Your first instinct may be to say “you’re done, go home” and mean it.
That’s what a summary dismissal looks like, ending someone’s employment immediately, without notice, because of serious misconduct. It’s the most serious step an employer can take, and it’s also one of the easiest to get wrong. In our experience, most summary dismissals that fall over at the Fair Work Commission don’t fail because the misconduct didn’t happen. They fail because the employer skipped a step.
This guide by our employment law lawyers, explains, in plain English, when summary dismissal is likely to stand up, the process to follow, and what recent cases tell us about where employers go wrong.
The quick version
- What it is: Ending employment immediately, without notice or payment in lieu of notice, because of serious misconduct.
- When it may be justified: Conduct such as theft, fraud, assault, sexual harassment, being intoxicated at work, refusing a lawful and reasonable instruction, or conduct that creates a serious and imminent safety risk.
- The catch: Even where the misconduct is real, you generally still need to investigate, put the allegations to the employee and listen to their side before you decide.
- The biggest risk: An unfair dismissal claim. A flawed process is one of the most common reasons employers lose.
- The alternative: A final warning or a negotiated exit may be the lower-risk option, even where you’d be entitled to dismiss.
What counts as "serious misconduct"?
The Fair Work Regulations 2009 (regulation 1.07) describe serious misconduct as either:
- Deliberate conduct: conduct that is wilful or deliberate and inconsistent with the employment continuing, or
- Serious risk: conduct that causes a serious and imminent risk to someone’s health or safety, or to the reputation, viability or profitability of the business.
The Regulations also give some examples:
- Dishonesty or violence: theft, fraud or assault in the course of employment.
- Sexual harassment: in the course of employment.
- Intoxication: being drunk or affected by drugs at work.
- Refusing a lawful instruction: refusing to carry out a lawful and reasonable instruction that is consistent with the employment contract (often called insubordination).
The bar is deliberately high. A bad attitude, a heated disagreement or poor performance is unlikely to be serious misconduct on its own. And even conduct that appears on the list may not justify instant dismissal once the full context is considered. That might include the employee’s role, their record, whether anyone was actually put at risk, and how similar conduct has been handled in the past.
For a broader overview of employer obligations, see The Fair Work Act: A Guide for Employers.
Three real cases that show how this plays out
When summary dismissal was upheld
In a 2017 Fair Work Commission matter, a worker who had been drinking tried to board a tanker vessel to sleep it off. When security refused him entry, he became aggressive and knocked the glasses off a guard’s face. He was summarily dismissed under the company’s zero-tolerance alcohol policy.
He argued it happened after hours and that he never actually got on board. The Commission wasn’t persuaded. In a high-risk industry, safety rules may apply even when an employee is off duty, and the employer’s loss of trust wasn’t undone just because security stopped him in time. The dismissal stood.
When the reason was valid but the process wasn't
In a recent 2026 matter, a ceiling fixer made derogatory comments about Chinese workers at a toolbox meeting attended by more than 20 staff, including Chinese colleagues. The Commission agreed this was a valid reason for dismissal.
But the employer had decided to sack him before telling him why or giving him a chance to respond. That made the dismissal harsh, and compensation was ordered. The business’s small size and lack of HR support didn’t excuse the missing step.
When nobody checked the facts
In another 2026 decision, a financial controller was dismissed for serious misconduct over an alleged unauthorised $100,000 payment. It turned out the payment didn’t exist. The only duplicate payment had been made earlier, spotted by the employee herself, and already refunded. They had written the dates incorrectly on the letter to the employee, and the CEO admitted he hadn’t read the allegation letters before signing them. This meant the basis for the termination was not based on proper facts. The dismissal was found to be unfair, and the employer was ordered to pay more than $50,000 plus superannuation.
The lesson from all three: the strength of the misconduct matters, but so does how you handle it. A strong case may still be lost if the process is rushed.
What can go wrong?
If summary dismissal is mishandled, your business may face:
- Unfair dismissal claims: the most common risk, with possible compensation or reinstatement.
- General protections claims: where the employee alleges the real reason was a complaint, illness, leave or another protected reason.
- Discrimination claims: for example, where the conduct is linked to a disability or health condition.
- Breach of contract claims: particularly where your own policies weren’t followed.
If you’re already facing a claim, our guide to Defending Unfair Dismissal explains the key steps. For more on handling complaints before they escalate, see Handling Workplace Complaints: Employer Guide.
A fair process, step by step
Even when the facts look clear, a fair process gives your decision the best chance of surviving a challenge.
- Step 1: Make the workplace safe: If needed, stand the employee down while you investigate. This should generally be on full pay, unless the contract, award or enterprise agreement allows otherwise.
- Step 2: Investigate promptly: Gather witness statements, emails, system logs, CCTV footage and any safety reports. Don’t rely on second-hand summaries.
- Step 3: Put the allegations in writing: Explain what the employee is alleged to have done, which policies may have been breached, and that dismissal is a possible outcome.
- Step 4: Hold a meeting and listen: Let the employee respond, and don’t unreasonably refuse a request for a support person.
- Step 5: Consider everything before deciding: Weigh their response, their history, any mitigating factors and how you’ve treated similar conduct before. The person making the decision should read the evidence themselves.
- Step 6: Confirm the outcome in writing: The termination letter should set out the reason, the date employment ends, final pay and the return of company property.
One more thing: check your own policies. In a 2024 Fair Work Commission matter, an employee was dismissed for serious misconduct without the employer following its own disciplinary procedure. He developed a serious psychiatric injury, and the High Court upheld damages of around $1.44 million. If your contract or policies promise a process, that process may be legally binding.
Suspension and investigations: what’s actually required?
When something serious happens at work, two questions usually come up straight away. Should we send them home? And do we really need a full investigation if we already know what happened? The answers matter, because this is the stage where many summary dismissals are won or lost.
Do you have to suspend the employee?
No. Suspension is not a legal requirement, and it should not be used for punishment. It is a practical tool to protect people and the investigation while you work out what happened. It may be appropriate where:
- Safety is at risk: for example, after an alleged assault, threats or serious intoxication.
- Evidence could be affected: the employee has access to records, systems or money that relate to the allegations.
- Witnesses could be influenced: the employee works closely with the people you need to interview.
- The allegation is very serious: for example, theft, fraud or sexual harassment, where it would be unreasonable to expect colleagues to keep working alongside them.
For lower-level allegations, keeping the employee at work (or temporarily changing their duties or location) may be enough.
Paid or unpaid?
Suspension should generally be on full pay. Unless the employment contract, award or enterprise agreement clearly allows unpaid suspension, sending someone home without pay may be a breach of contract or an underpayment, and it may also suggest you have already decided the outcome.
It is also worth knowing that the “stand down” provisions in the Fair Work Act are a different thing. They cover situations like industrial action or equipment breakdown, not suspected misconduct, so they generally cannot be used to stop paying an employee during an investigation.
How to suspend fairly
If you do suspend, confirm it in writing and keep it simple:
- Explain why: say that serious allegations have been raised, without going into detail or making findings.
- Make it clear it is not a finding: the suspension is to allow a fair investigation, and no decision has been made.
- Set expectations: for example, not contacting witnesses about the matter, and returning access cards or devices if needed.
- Give a timeframe: even an estimate, and keep the employee updated if it changes.
- Offer support: provide EAP details if you have them, and a contact person for questions.
Keep the suspension as short as reasonably possible. A suspension that drags on for weeks with no updates can itself become a psychosocial hazard, and it may weaken your position later.
Don't wait too long either
Speed matters in both directions. If an employer becomes aware of serious misconduct but lets the employee keep working normally for weeks before acting, it may be harder to argue that the conduct was so serious that the employment couldn’t continue. As a rough guide, aim to resolve most investigations within days or a few weeks, not months, and record the reasons for any delay.
For example, a warehouse supervisor is reported for driving a forklift after drinking at lunch. The manager sends him home on full pay that afternoon and confirms it by email, explaining that a serious safety allegation is being investigated and no decision has been made. The next day, the manager collects statements from two witnesses and the CCTV footage, then sends the supervisor a letter setting out the allegation and inviting him to a meeting with a support person. He attends and admits he had two beers but says he felt fine. After considering his response, his safety-critical role and the company’s alcohol policy, the business decides to dismiss him for serious misconduct and confirms the decision in writing.
The whole process takes three working days, and the business is in a much stronger position than if it had dismissed him in the car park.
Need to act quickly on a serious incident? Prosper Law can help you suspend fairly, run a prompt investigation and reach a decision you can defend, often within days.
Small business? There's a little more flexibility
If you have fewer than 15 employees, the Small Business Fair Dismissal Code says it is fair to dismiss without notice or warning where you believe, on reasonable grounds, that the conduct is serious enough to justify immediate dismissal. Examples include theft, fraud, violence and serious safety breaches.
The key words are “reasonable grounds”. You still need a sound basis for your belief, so checking the facts first (and, where relevant, reporting the matter to police) remains the safer path.
We recently advised a small business owner after a long-serving employee used a racial slur towards a colleague at work. The comment was made in front of other staff, and the affected employee raised a formal complaint.
On paper, this may have looked like a clear case for summary dismissal. But the business relied heavily on the employee’s expertise and knowledge of the business, and the employee had no previous warnings. As the Jones case shows, even where there is a valid reason, a rushed dismissal may still be found harsh. The business also had to think about its obligations to the colleague who was targeted, including providing a safe workplace and making sure the complaint was taken seriously.
We advised the business on the lowest-risk way to deal with the situation. The business investigated the complaint, put the allegation to the employee and supported the affected colleague throughout. The employee acknowledged the comment. The parties then agreed to a mutual separation, supported by a modest ex gratia payment in exchange for a deed of release. The business got certainty that no claims would follow, the affected employee saw that the complaint led to real action, and the matter was resolved quickly.
Facing a serious misconduct issue? Prosper Law can help you investigate, put the allegations to the employee and work out the right outcome, whether that’s summary dismissal, a warning or a negotiated exit. Book a consultation with our employment team.
Frequently Asked Questions (FAQs)
Can I dismiss an employee on the spot in Australia?
Not safely. You may remove them from the workplace for safety reasons, but you must investigate and give them an opportunity to respond before dismissing.
Can I dismiss someone for a social media post?
To understand when an employee’s online behaviour may justify termination, see Social Media Posts as Grounds for Dismissal.
Do I need to pay notice if it’s summary dismissal?
No. Australian law allows termination without notice for serious misconduct. Accrued annual leave still needs to be paid.
Can you summarily dismiss someone during their probation period?
Yes, however – probation does not remove the employer’s obligation to follow a fair and reasonable process, including notifying the employee of the allegations and giving them an opportunity to respond.
An employee on probation can still be summarily dismissed if they engage in serious misconduct.
For more guidance on managing new employees and contractual rights, see our article on Probationary Periods and Employment Contracts.
What if the employee denies the misconduct?
You must fairly consider their response. Automatically dismissing an employee without weighing the evidence creates unfair dismissal risk.
Does poor performance count as serious misconduct?
Generally, no. Poor performance is not serious misconduct under the Fair Work Act and should be managed through warnings and performance management.
See our article on minor misconduct for more information.
Should I seek legal advice before summarily dismissing someone?
Yes. Summary dismissal is one of the highest-risk actions under employment law, and legal guidance helps ensure compliance with the Fair Work Act and your internal policies.
Prosper Law assists Australian businesses, HR professionals and managers with misconduct investigations, disciplinary action, and termination decisions – reach out today to learn more.
Last updated: October 2026.
About the Author
Farrah Motley
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