What compensation could look like, and why reinstatement comes first
The Fair Work Commission treats reinstatement as the primary remedy. Compensation, when it is ordered, is capped at the lesser of 26 weeks' pay or half the high income threshold, and no figure here predicts what any individual would receive.
Reinstatement, not a payout, is the Fair Work Commission's starting point. Its own guidance states it directly: "Reinstatement is the primary remedy in unfair dismissal cases. When a Commission Member decides a dismissal is unfair they will see if reinstating the employee is appropriate. When reinstatement is not appropriate, other remedies will be looked at. This includes compensation." A reader searching for what a claim pays should know that the Commission's own framework does not start from a dollar figure.
The compensation cap, and what it is not
Where compensation is ordered, section 392 of the Fair Work Act sets a ceiling: the compensation cap is the lesser of 26 weeks' remuneration (what the person actually received, or was entitled to receive, in the 26 weeks before the dismissal) or half the high income threshold at the time of the dismissal. For a dismissal on or after 1 July 2026, that ceiling is $95,050, according to the Fair Work Commission, up from $91,550 the year before. The cap is a ceiling on what an order can award, not an entitlement and not a typical outcome. The Commission's own published figure for what most people actually receive sits well below this ceiling: a median of 5 to 7 weeks' pay, with fewer than 0.4% of applicants ever receiving the cap itself. No page on this site converts that median into a dollar figure, because the Commission calculates every award from the individual's own proven loss and publishes the median only as a range of weeks' pay.
What actually goes into the calculation
The Commission's own guidance breaks the formula into four inputs: the employee's likely remuneration had the dismissal not happened, based on how long they worked there and their work and performance history; deductions for any wages or income earned since the dismissal, including workers' compensation payments; the employee's own efforts to reduce their loss, which need to be reasonable given the circumstances; and the legal cap described above. The Commission is explicit about what it excludes: it cannot order compensation for reasons such as pain and suffering, shock, distress, hurt or humiliation. This is a calculation of economic loss, not a payment for the experience of being dismissed.
Where this came from
- Fair Work Commission: Compensation cap.
- Fair Work Commission: The formula to calculate compensation.
- Fair Work Commission: Compensation for unfair dismissal.
- Fair Work Commission: Reinstatement after unfair dismissal.