Valid reason
Before anything else, the Commission asks whether there was a valid reason for the dismissal. If the answer is no, the employer usually loses, however good the process was.
What you’ll be able to do
- Explain the legal test in one sentence.
- Tell the difference between “we believe it happened” and “we can prove it happened”.
- Spot the failure patterns that most often sink a valid reason at the Fair Work Commission.
The legal test
A valid reason is one that is sound, defensible or well founded, and not capricious, fanciful, spiteful or prejudiced [2026] FWC 218 at [28]. The reason must relate to the employee’s capacity (their ability to do the job) or their conduct (how they behaved).
The working principles
From the Full Bench in Sydney Trains v Hilder [2020] FWCFB 1373, as quoted in [2023] FWC 65 at [36] at [36]. Hilder is not in this corpus as a direct record — check the quoted principles against the original before relying on them.
- A valid reason is one that is sound, defensible and well-founded, and not capricious, fanciful, spiteful or prejudiced.
- Where the reason is misconduct, the Commission decides for itself whether the conduct happened and what it involved.
- A reason is valid only if the conduct happened and it justified termination. A trivial misdemeanour that happened is still not a valid reason.
- The conduct doesn’t need to be serious enough for summary dismissal to be a valid reason.
- Whether the employer had a contractual right to terminate is irrelevant to whether there was a valid reason.
- Mitigating factors, like long service or personal circumstances, aren’t weighed here. They come in later under s.387(h), as part of whether dismissal was proportionate.
Proving the facts isn’t enough. Dismissal must be a justifiable response. A reason not of sufficient gravity to justify dismissal is not valid [2026] FWC 218 at [30].
The Commission doesn’t stand in the employer’s shoes. It won’t ask what it would have done. It asks whether the reason holds up on an objective look at the facts [2026] FWC 218 at [31].
Proving the conduct
In a conduct case, the Commission decides on the evidence in front of it whether the conduct actually happened, on the balance of probabilities. An employer’s honest and reasonable belief after a proper investigation isn’t enough [2021] FWC 13 at [88].
- Serious allegations need care. Where the finding turns on disputed conduct like dishonesty or violence, the Commission is careful before making a finding — in one matter this meant weighing “Briginshaw considerations” alongside the employee’s own concessions [2023] FWC 961 at [42]-[45].
- An investigation report isn’t proof by itself. In Hijazi, the employer relied on an external report and called none of the alleged participants as witnesses. The Commission found a valid reason only because of the employee’s own concessions, “combined with limited reliance” on the report [2021] FWC 13 at [92].
- Your file has to stand up later. Witness statements, contemporaneous notes, CCTV, system logs and admissions win cases. Opinions and summaries don’t.
Policy breaches and directions
A substantial and wilful breach of policy will often be a valid reason. But a clear breach doesn’t automatically make dismissal fair: every case turns on its circumstances — a Full Bench majority said so in B, C and D v Australian Postal Corporation, as quoted in [2021] FWC 5677 at [12]. B, C and D is not independently located as a direct record in this corpus pass — check the quote against the original.
When an employee refuses a direction based on a policy, the Commission focuses on whether the direction was lawful and reasonable, not on whether it would have chosen the same policy [2021] FWC 5677 at [13].
Performance and capacity
Capacity covers poor performance, physical capacity, loss of a licence or qualification the job needs, and inability to perform the inherent requirements of the role [2021] FWC 3122 at [74].
Glading v Advizer shows what a well-built performance case looks like. A broker missed sales targets in 14 of 18 months. The employer:
- set out the role’s inherent requirements, which the employee accepted [2025] FWC 3137 at [63];
- produced the numbers month by month [2025] FWC 3137 at [61];
- answered his “bad leads” argument by showing that colleagues with similar experience received comparable leads;
- gave tailored training, a new manager and two improvement plans.
The Commission found a valid reason related to capacity [2025] FWC 3137 at [84]. A performance reason is only as strong as the measurement behind it.
Out-of-hours conduct
Conduct outside work counts only where it has a real connection to the employment. Under Rose v Telstra (a 1998 AIRC decision, not in this corpus — check the quote against the original), conduct viewed objectively must be likely to seriously damage the employment relationship or be incompatible with the employee’s duty. The test is applied in [2022] FWC 326 at [54]-[55].
The question for advisers: what is the link to work? Write that link into the show cause letter.
How valid reasons fail
These patterns recur in the decisions. Two are from cases where the employee won; the third is a case where the employer’s reasoning was undermined by stale information.
The reason isn’t about the employee
Dismissed because her parents’ employment ended, under an arrangement she never agreed to. [2022] FWC 2368 at [53]-[56]
Ask: what did this employee do, or fail to be able to do?
The allegation is pitched too high
Alleged he knowingly lodged false ATO reports; he genuinely believed they were correct. [2023] FWC 3367 at [58]-[60]
Frame the allegation at the level you can prove. “Knowingly” must be proved too.
Stale or incomplete information
Dismissed under a site-access policy after rules had eased, without checking which sites still required it. [2023] FWC 2758 at [99]-[101]
Re-check the facts on the day you decide.
A report, not first-hand evidence
No alleged participant gave evidence. The employer survived on the employee’s own concessions. [2021] FWC 13 at [92]
Keep witnesses available and statements signed.
Adviser checklist
Work through this before recommending termination. If any item can’t be ticked, escalate before going further.
- The reason
- Evidence
- Type of reason
- Before deciding
Practice scenario: the pre-start checklist
Fictional scenario. Write your answers, then reveal the model answer.
Jordan is a maintenance technician with six years’ service and no prior warnings, at a logistics depot. Site rules require a pre-start inspection of each light vehicle before use, recorded on an electronic checklist.
The supervisor wants Jordan dismissed for “deliberately falsifying safety records”. An internal investigator interviewed the supervisor and reviewed the telematics. Jordan wasn’t interviewed. Informally, Jordan says the crew routinely completes the checklist in the crib room before walking to the vehicles, and the supervisor has seen it.
- Not yet. The checklist was submitted before the inspection could have happened. But “deliberate falsification” goes to intent, and nothing has tested that yet — that’s the same trap as the ATO case above.
- Missing: Jordan’s account; whether the crib-room practice is widespread and known to supervisors; whether the inspection was done at 06:40; how other crew members’ checklists compare; and any past discipline for the same thing.
- Framing: “You submitted the LV-14 pre-start checklist at 6:02 am, before the vehicle was accessed at 6:40 am, contrary to the pre-start procedure.” Add dishonesty only if the evidence supports it.
Where it could land, depending on what the further inquiries show:
Decisions cited
Check each paragraph reference against the published decision on the FWC website before relying on it. Hilder, B, C and D and Rose v Telstra are cited as quoted in later decisions and still need checking in the original. Rows marked “partial” confirm the proposition pinpoint only — this decision’s own final finding was not independently read in this pass.
| Decision | Outcome (confirmed from the text) |
|---|---|
| [2026] FWC 218 Potter v Cement Australia Holdings | partialOnly the valid-reason test recitation at [28], [30], [31] was read and confirmed. This decision's own finding on Mr Potter's case was not read in this pass — not asserted here. [28] |
| [2025] FWC 3137 Glading v Advizer | Valid reason found related to capacity (sustained underperformance against measured targets, despite training and two improvement plans) — confirmed at [84]. [84] |
| [2023] FWC 961 Edward v Life Without Barriers | Application dismissed — not unfair. Conduct (a slap) found proven on the balance of probabilities, with Briginshaw considerations applied at [42]-[45]; final order at [58]. [58] |
| [2023] FWC 65 25 employees v DP World Sydney & Brisbane | Cited here only for its restatement of the Sydney Trains v Hilder principles at [36]; this case's own outcome is not relied on and not asserted. [36] |
| [2023] FWC 3367 Vetiyatil v Agripower | No valid reason found — confirmed at [60]. The allegation that Mr Vetiyatil knowingly lodged false ATO reports was not made out; he genuinely believed the reports were correct — confirmed at [58]-[59]. [60] |
| [2023] FWC 2758 Stace v Complete Office Staffing | partialConfirmed at [99]-[100]: the employer did not check that the information behind its site-access policy was still current, undermining the direction's reasonableness. This decision's final finding on valid reason was not read in this pass — not asserted here. [99] |
| [2022] FWC 326 Ronchi v Johns Lyng Services | partialOnly the out-of-hours-conduct test (Rose v Telstra, as applied) was read and confirmed at [54]-[55]. This decision's own finding on Mr Ronchi's case was not read in this pass — not asserted here. [54] |
| [2022] FWC 2368 Elliott v Care for Kids Group | No valid reason found — confirmed at [56]. The dismissal was based on an arrangement about her parents' employment, not anything the employee did — confirmed at [53]-[55]. Compensation was subsequently calculated (paragraphs beyond [99], not independently re-read here). [56] |
| [2021] FWC 5677 Desmond v Lyndons | partialOnly the policy-breach principle (quoting B, C and D v Australian Postal Corporation) and the lawful-and-reasonable-direction test were read and confirmed at [12]-[13]. This decision's own finding on Ms Desmond's case was not read in this pass — not asserted here. [12] |
| [2021] FWC 3122 Eskander v Visy Board | Cited only for the meaning of "capacity" under s.387(a), confirmed at [74]. This case's own outcome is not relied on and not asserted. [74] |
| [2021] FWC 13 Hijazi v Calvary Health Care ACT | Valid reason found related to conduct — confirmed at [91]. The finding relied on the employee's own concessions, with limited reliance on the investigation report — confirmed at [92]. [91] |
- Sydney Trains v Hilder [2020] FWCFB 1373 — quoted in [2023] FWC 65 at [36]. Check against the original before relying on it.
- Rose v Telstra Corporation Ltd, Print Q9292 (AIRC, Ross VP, 4 December 1998) — quoted in [2022] FWC 326 at [54]. Check against the original before relying on it.
- B, C and D v Australian Postal Corporation — quoted in [2021] FWC 5677 at [12]. Check against the original before relying on it.
- R v The Darling Island Stevedoring and Lighterage Company Limited; Ex parte Halliday and Sullivan (1938) 60 CLR 601 — quoted in [2021] FWC 5677 at [18]. Check against the original before relying on it.
- Briggs v AWH Pty Ltd — quoted in [2021] FWC 5677 at [15]. Check against the original before relying on it.