See Fair Work Act 2009 s.385(b)
Only after determining that an employee is protected from unfair dismissal, and that the employee has been dismissed, can the Fair Work Commission determine whether the dismissal was unfair within the meaning of the Fair Work Act.
In doing so the Commission must consider whether the dismissal was harsh, unjust or unreasonable. This is also called determining the merits of the unfair dismissal claim.
There are 3 substantive elements of an unfair dismissal (apart from the fact of the dismissal itself) that the Commission must be satisfied of:
The power to grant a remedy cannot be exercised without the Commission being satisfied about these 3 matters.
See Fair Work Act s.387
It may be that the dismissal is:
The concepts of harsh, unjust or unreasonable may overlap.
A dismissal may be:
In considering whether a dismissal was harsh, unjust or unreasonable, the Commission must take into account:
The phrase 'must take into account' means that each of the above criteria are mandatory and must be considered in determining whether a dismissal is harsh, unjust or unreasonable.
The criteria need only be taken into account to the extent that they are relevant.
Failure to take account of each of the criteria is a significant error of law (and may provide a basis for appeal).
Whether a circumstance existed must then be taken into account, considered and given due weight as a fundamental element in determining whether the termination was harsh, unjust or unreasonable.
The Commission has ultimate discretion in weighing each matter carefully in arriving at a decision.
Facts justifying dismissal, which existed at the time of the dismissal, should be considered, even if the employer was unaware of those facts and did not rely on them at the time of dismissal.
Facts which existed at the time of the dismissal, but came to light after the dismissal may:
Ultimately, the Commission is bound to determine whether, on the evidence provided, facts existed at the time of termination that justified the dismissal.
The reason for the termination need not be that which was given by the employer. It can be any reason underpinned by the evidence provided to the Commission. If the employer seeks to rely on a reason for dismissal other than the reason given or relied upon at the time of the dismissal 'they will have to contend with the consequences of not giving the employee an opportunity to respond to such reason'.
 Fair Work Act s.385.
 McKerlie v RateIt Australia Pty Ltd t/a RateIt  FWCFB 5131 (Hatcher VP, Anderson DP, Johns C, 24 September 2020) at para. 57.
 ibid. See also Australia Meat Holdings Pty Ltd v McLauchlan, Print Q1625 (AIRCFB, Ross VP, Polites SDP, Hoffman C, 5 June 1998), [(1998) 84 IR 1 at p. 10].
 Fair Work Act s.387.
 Chubb Security Australia Pty Ltd v Thomas, Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) at paras 38‒41. See also King v Freshmore (Vic) Pty Ltd, Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000) at para. 19; Tenix Defence Systems Pty Ltd v Fearnley, Print S6238 (AIRCFB, Ross VP, Polites SDP, Smith C, 22 May 2000) at para. 83; Annetta v Ansett Australia Ltd, Print S6824 (AIRCFB, Giudice J, Williams SDP, Cribb C, 7 June 2000) at para. 15, [(2000) 98 IR 233].
 ALH Group Pty Ltd trading as the Royal Exchange Hotel v Mulhall, PR919205 (AIRCFB, Ross VP, O'Callaghan SDP, Redmond C, 21 June 2002) at para. 51, [(2002) 117 IR 357]. See also Smith and others v Moore Paragon Australia Ltd, PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002) at para. 92; Edwards v Justice Giudice  FCA 1836 (23 December 1999) at paras 6–7, [(1999) 94 FCR 561].
 R v Hunt; Ex parte Sean Investments Pty Ltd  HCA 32 (19 July 1979) at para. 6 (Murphy J), [(1979) 180 CLR 322]; cited in Chubb Security Australia Pty Ltd v Thomas, Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000) at para. 37.
 Shepherd v Felt & Textiles of Australia Ltd  HCA 21 (4 June 1931), [(1931) 45 CLR 359 at pp. 373, 377‒378].
 Australia Meat Holdings Pty Ltd v McLauchlan, Print Q1625 (AIRCFB, Ross VP, Polites SDP, Hoffman C, 5 June 1998), [(1998) 84 IR 1 at p. 14]. See also Dundovich v P & O Ports, PR923358 (AIRCFB, Ross VP, Hamilton DP, Eames C, 8 October 2002) at para. 79.
 Lane v Arrowcrest (1990) 27 FCR 427, 456; cited with approval in Byrne v Australian Airlines Ltd  HCA 24 (11 October 1995) at paras 131, 136 (McHugh and Gummow JJ), [(1995) 185 CLR 410 at pp. 467, 468].
 MM Cables (A Division of Metal Manufacturers Limited) v Zammit, Print S8106 (AIRCFB, Ross VP, Drake SDP, Lawson C, 17 July 2000) at para. 42. See also Fenton v Swan Hill Aboriginal Co-operative Ltd  FCA 1613 (4 September 1998).
 Fair Work Act ss.387(b) and 387(c). See also APS Group (Placements) Pty Ltd v O'Loughlin  FWAFB 5230 (Lawler VP, O'Callaghan SDP, Roberts C, 8 August 2011) at para. 51, [(2011) 209 IR 351].