Show Cause Letter AU: A Fair Process Before Any Dismissal

In Australian workplace practice, a show cause letter (also called a notice to show cause) is issued once an employer has gathered enough material to form a preliminary view that misconduct may have occurred. It is not a finding. The letter puts the allegations, summarises the evidence, states that the employer is considering termination or another disciplinary outcome, and asks the employee to explain why that outcome should not follow. Its legal function is narrow but decisive: it is the vehicle through which the employer discharges the notification and response limbs of s.387(b) and (c) of the Fair Work Act.

It sits between two other documents and should not be confused with either. A written warning or performance improvement plan for underperforming staff deals with capacity or minor conduct and anticipates the relationship continuing. A termination letter setting out notice and final entitlements records a decision already made. The show cause letter comes before that decision, and its wording must keep the outcome genuinely open.

For national system employees, the unfair dismissal regime in Part 3-2 of the Fair Work Act 2009 (Cth) is the starting point. Under s.385, a dismissal is unfair if it was harsh, unjust or unreasonable, was not consistent with the Small Business Fair Dismissal Code, and was not a case of genuine redundancy. On the first question, the Commission must weigh the matters in s.387, which include whether there was a valid reason related to capacity or conduct, whether the employee was notified of that reason, whether they had an opportunity to respond, and whether the employer unreasonably refused a support person, among other matters. Protection applies once the employee has completed the minimum employment period in s.383 (six months, or twelve months for an employer with fewer than 15 employees) and either earns below the high income threshold or is covered by an award or enterprise agreement. A dismissed employee then has 21 days from the dismissal taking effect to apply under s.394.

Regulation 1.07 of the Fair Work Regulations 2009 defines serious misconduct as wilful or deliberate conduct inconsistent with continuing the contract, or conduct causing serious and imminent risk to a person's health or safety or to the reputation, viability or profitability of the business. Its examples include theft, fraud, assault, sexual harassment, intoxication at work and refusing a lawful and reasonable instruction. Where it is established, s.123(1)(b) removes the NES notice entitlement. The opportunity to respond must precede the decision, as the AIRC Full Bench held in Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137. Just as important, under King v Freshmore (Vic) Pty Ltd (AIRC Full Bench, 2000) the Commission decides for itself, on the evidence, whether the misconduct occurred; the employer's belief is not enough. The Fair Work Commission Unfair Dismissals Benchbook, which summarises the case law on notification and the opportunity to respond, is the reference practitioners use.

The most common trigger is the close of a workplace investigation into conduct that, if proven, would justify dismissal: theft of stock, falsified timesheets, misuse of a company card. The employer then has a preliminary view but no decision, which is exactly where a show cause letter belongs. Harassment and bullying complaints form the next large category. Since the positive duty in s.47C of the Sex Discrimination Act 1984 (Cth) commenced, employers are expected to act on substantiated complaints, and a fair process toward the respondent is part of meeting it.

Safety breaches are a third group, where a positive drug or alcohol test, a bypassed isolation or a near miss caused by ignoring procedure can amount to serious misconduct even without injury. Out-of-hours conduct can also qualify where it has a genuine connection to the employment, the principle drawn from Rose v Telstra Corporation Ltd [1998] AIRC 1592.

Two edge cases deserve care. An employee charged with a criminal offence connected to work does not need to be convicted before the employer acts, but the letter should rely on the employer's own evidence rather than the charge. And before any letter issues, confirm the person really is an employee: a worker engaged under an independent contractor agreement drafted to s.15AA of the Fair Work Act has no unfair dismissal rights, although a sham arrangement will be treated as employment.

• The heading and confidentiality marker identify the document as a show cause letter concerning allegations only. The opening paragraph states expressly that no findings or decision on outcome have been made, which is the sentence most often missing from letters the Commission criticises.
• The particularised allegations are numbered, each stating what is alleged to have happened, on what date, where, and which policy or obligation it engages. Cross-references to the code of conduct and to the duties in an Australian employment contract built on the National Employment Standards show the employee exactly which standard they are said to have breached.
• The summary of evidence lists the material relied on, such as witness statements, CCTV stills, system logs and the investigation report. Full documents are not always required, and complainant details can be protected, but the employee must receive the substance of every adverse fact the decision maker will rely on.
• The proposed outcome describes the range of actions under consideration, from a final written warning to termination with or without notice. "The company is considering" replaces "the company will", keeping the decision open.
• The response mechanism sets a deadline in business days, allows a written or in-person response or both, and invites any request for an extension.
• The support person and interim arrangements clause offers a support person at any meeting, confirms whether the employee is directed not to attend work on full pay, and gives a reasonable direction not to contact witnesses.

National system employers cover most of the country. The Fair Work Act reaches incorporated businesses everywhere and, through state referrals of power, nearly all private employers outside Western Australia. Businesses with fewer than 15 employees can rely on the Small Business Fair Dismissal Code, which permits summary dismissal where the employer believes on reasonable grounds that the conduct was serious enough. Under Pinawin v Domingo [2012] FWAFB 1359, the Commission asks whether that belief was genuinely held and reasonably formed, and a show cause process is the clearest evidence that it was.

Western Australia is the main exception. Sole traders, unincorporated partnerships and some trusts remain in the state system under the Industrial Relations Act 1979 (WA), as does the WA public sector. The test under s.29 is whether the dismissal was harsh, oppressive or unfair, there is no minimum employment period, and the claim window is 28 days after the dismissal. Employees outside an award or agreement earning above the prescribed amount in s.29AA are excluded. With no equivalent of the Small Business Code, the show cause letter carries the whole procedural burden.

New South Wales public sector agencies operate under the Government Sector Employment Act 2013 (NSW) and the Industrial Relations Act 1996 (NSW), which also covers local councils. Misconduct action under s.69 of the GSE Act must follow the procedural requirements of the GSE Rules 2014, and unfair dismissal applications go to the Industrial Relations Commission of New South Wales within 21 days.

Queensland state and local government employers sit under the Industrial Relations Act 2016 (Qld), with reinstatement applications heard by the Queensland Industrial Relations Commission within 21 days. Public service discipline follows the Public Sector Act 2022 (Qld) and the Discipline directive, which uses a formal show cause notice at both the allegation stage and the proposed penalty stage.

You start by choosing the system that applies: national, Western Australian state system or a state public sector employer. That answer sets the statutory references, the tribunal and the claim window throughout the document. Next you enter the employer's legal name and ABN, the employee's details and position, and the name of the decision maker, ideally someone who was not involved in the investigation. The form then takes you through each allegation separately, asking for the date, location, conduct alleged, evidence relied on and policy engaged. Once the allegations are complete, you select the outcomes under consideration and the response period. After a final review, your show cause letter is generated ready to sign, and you keep a note of how and when it was handed over.

The error that loses most cases is prejudgment. Letters stating that the employee "has breached" the policy, or that arrive alongside a termination letter already signed, tell the Commission the response never mattered. A close second is vague allegations: "inappropriate behaviour towards colleagues" without names, dates or words used gives the employee nothing concrete to answer, and s.387(b) is not satisfied by a label. Employers also rely on matters the letter never mentioned, such as earlier warnings or a second incident discovered later. If it will influence the outcome, it must be put to the employee first.

A 24-hour window for allegations that could end a career is rarely a genuine opportunity, and a decision issued before the deadline expires will weigh heavily against the employer. Unreasonably refusing the employee's chosen support person hands them an express s.387(d) argument. Issuing a show cause letter days after an employee lodged a complaint, raised a safety concern or returned from sick leave invites a general protections claim, where the reverse onus in s.361 requires the employer to prove the real reason. Record the reasons for the timing on file before the show cause letter goes out.