FWC Rules Employee’s Inaction Justified Dismissal

In Australia, strict employment laws dictate that individuals can only work if they are Australian citizens, permanent residents, or hold a valid visa with work rights. A recent Fair Work Commission (FWC) ruling in Muza v Costco Wholesale Australia Pty Ltd [2025] FWC 252 reinforced the importance of visa compliance, dismissing an unfair dismissal claim by a Costco employee who continued working after his visa expired.

The Case Overview

The employee’s contract clearly stated that maintaining a legal right to work in Australia was a condition of employment, with failure to meet this requirement grounds for immediate termination.

• 6 August 2024: The employer contacted the employee about his visa, set to expire on 14 August.
• 7 August 2024: The employee applied for a visa renewal.
• 14 August 2024: His visa expired, but he did not inform his employer or provide an update on his application status.
• 15–16 August 2024: The employee continued working without a valid visa.
• 19 August 2024: The employer followed up, and the employee admitted his visa was still being processed.
• Following this, Costco issued a show cause letter and ultimately dismissed the employee for lacking the legal right to work.

The Unfair Dismissal Claim

The employee argued that his dismissal was harsh and unreasonable because:

• He had taken all reasonable steps to renew his visa.
• His visa was granted the next business day, and Costco knew it was imminent.
• He had never received a warning or faced visa issues before.

The Employer’s Position

Costco maintained that:

• At the time of dismissal, the employee was not legally entitled to work.
• The Migration Act 1958 (Cth) requires all employees to hold a valid visa.
• The employment contract obligated the employee to provide evidence of his work rights.

The employer also noted that it had dismissed two other employees in similar situations within nine days of their visa expiry.

The FWC’s Findings

The FWC ruled in favor of Costco, determining that:

• The employee’s inaction was the root cause of his dismissal.
• By failing to secure a visa extension before expiry, he was without legal capacity to work for 16 days.
• Even without Costco’s action, the employment contract would have been terminated automatically due to frustration of contract.

While acknowledging the case as unfortunate, the FWC concluded that the dismissal was valid and not unfair.

Key Takeaways for Employers

This case highlights the critical need for businesses to:
✅ Regularly verify employees’ right to work.
✅ Implement processes to monitor visa compliance.
✅ Take immediate action if an employee cannot provide evidence of work rights.

Employers should maintain clear policies and proactive checks to prevent compliance breaches and potential legal risks.

Disclaimer: This blog is for informational purposes only and should not be considered legal advice. Workplace Law is not liable for any loss or damage arising from reliance on this content.