There are certain restrictions in Australia on the types of people that may be lawfully employed by an employer. Specifically, a person can only work in Australia if they are an Australian citizen, permanent resident or they have a valid visa with work rights.
In the recent decision of Muza v Costco Wholesale Australia Pty Ltd [2025] FWC 252, the Fair Work Commission (FWC) dismissed an unfair dismissal application by an employee who was dismissed from his employment with Costco Wholesale Australia Pty Ltd (the Employer) following the expiration of his visa.
At the time that the employee was dismissed, the employment relationship was subject to an employment contract which contained the following relevant provisions:
On 6 August 2024, the Employer emailed the employee to enquire about the employee’s visa, which was due to expire on 14 August 2024. The employee applied to renew his visa the following day.
On 14 August 2024, the employee did not inform the Employer that their visa had expired and that the recent visa application made by the employee had not yet been accepted.
The employee worked on 15 and 16 of August 2024 without a valid visa.
On 19 August 2024, the Employer enquired about the employee’s expired visa and requested the employee send a copy of his new visa details, to which the employee responded that the application was still being processed.
The Employer issued the employee with a show cause letter in relation to his visa expiration and his resultant inability to lawfully work in Australia. Ultimately, the employee was dismissed on the basis that he did not have the legal right to work in Australia.
In his unfair dismissal application, the employee submitted that the dismissal was harsh, unjust or unreasonable on the basis that:
In contrast, the Employer argued that the dismissal was not harsh, unjust or unreasonable because:
The Employer also submitted that in the 12 months leading up to the employee’s termination, the Employer had dismissed two other employees within nine days of the expiration of their visas.
The FWC considered the submissions of both parties and found that there was a valid reason to dismiss the employee because he did not have the legal capacity to work in Australia. Further, the FWC took into account that the employee had a statutory and contractual obligation to maintain his right to work in Australia.
Commenting on the employee’s submission that the Employer rushed to terminate his employment, the FWC stated that “whatever delay the Applicant suffered was caused by his own inaction”. The FWC also noted that at the time of dismissal the employee had been without a valid visa for 16 days and had no legal capacity to work until he produced a valid visa.
The FWC commented that it was an “unfortunate case” where, had the employee acted sufficiently early, his employment would likely have continued.
In any event, the FWC considered that the fact that the employee did not have a valid visa would have ended the employment contract automatically by virtue of frustration, regardless of whether or not the Employer took steps to terminate the employment.
The FWC therefore dismissed the application, finding that the Employer had a valid reason for dismissal, and it was not harsh, unjust or unreasonable in all of the circumstances.
This case serves as a reminder to employers of the importance of checking an employee’s legal capacity to work or be employed in Australia and also the importance of having safeguards and processes in place to regularly ensure compliance.
Where an employee is unable to produce evidence of a legal right to work in Australia, this will generally provide a valid reason for termination of employment.
