The new fairness test for dismissals: What the 2026 legislative changes mean for process
Under the old rules, a procedural error during a dismissal process could be enough to make the dismissal unjustified, even if the reason for dismissal was completely sound. The 2026 amendments change that. Here is what you need to know.
What Was the Old Approach?
Previously, the test of justification put significant weight on procedural compliance. An employer could have a solid, well-founded reason to dismiss someone but still fail to meet the test due to failure to meet proper process. This created a situation where the outcome of a case could turn on a technicality rather than substance.
What Has Changed?
The 2026 amendments introduce confirmation that a dismissal cannot be found unjustified solely because of a procedural defect, unless that defect actually resulted in the employee being treated unfairly. The focus has shifted to assessing overall fairness of the situation rather than simply whether process was followed.
What About Employee Behaviour During the Process?
The new law also allows the Employment Relations Authority and Courts to take into account whether an employee obstructed the employer from following a proper process. If an employee made things unnecessarily difficult, this can now be factored in when assessing whether the outcome was fair.
Does This Mean Process Does Not Matter Anymore?
Not at all. A fair, documented process remains the best protection an employer can have. This change simply means a minor error that had no real impact on the employee or the outcome is less likely to unravel an otherwise justified dismissal. The standard to aim for is still genuine fairness at every step.
Good faith obligations, including those related to provision of information and an opportunity to comment, still apply.
Practical Implications for Employers
A minor procedural error is no longer so critical, provided the employee was not actually treated unfairly as a result.
Do not use this as a reason to cut corners. A thorough, fair, and well-documented process is still your best protection.
Review your disciplinary and dismissal procedures to make sure they focus on genuine fairness, not just following a checklist.
If an employee obstructs the process, document this carefully as it can now be taken into account.
Practical Implications for Employees
A procedural error by your employer does not automatically mean you will succeed with a personal grievance. What matters is whether you were treated fairly overall.
If the overall process was genuinely unfair and caused real harm, you may still succeed in a personal grievance.
Obstructing your employer's process could now be held against you when remedies are considered.
Get advice early if you believe you have been dismissed unfairly, as the assessment is now more nuanced than before.
Please note: This article is intended as general information only and is not a substitute for legal advice. If you have questions about how these changes affect you or your business, contact the team at McLuskie Dalziel Lawyers.
