Costco fires worker after expiration, FWC explores legal issues
The Fair Work Commission (FWC) recently dealt with a case involving a worker who was dismissed due to visa-related work restrictions. The case raised key legal questions about an employer’s obligations when an employee’s work rights are in question and whether the termination was lawful under the Fair Work Act 2009 (Cth).
The worker argued that the dismissal was unfair and unnecessarily rushed. According to the worker, he had taken all reasonable steps to renew his visa and had informed the employer that processing delays were beyond his control. He contended that the employer should have granted him more time rather than terminating his employment.
The worker also raised concerns about the manner in which the dismissal was carried out. He claimed that he was not given adequate notice and that the decision was communicated to him in a way that lacked fairness and consideration.
The worker had been with Costco Wholesale Australia Pty Ltd since 2021 and held several positions over time. Under the terms of the employment contract, all employees were required to provide evidence of his right to work in Australia. One clause specifically stated that failure to meet this requirement could lead to immediate termination.
The employer had a process for checking visa statuses. The administrative team regularly conducted Visa Entitlement Verification Online checks to confirm the work eligibility of employees on visas. According to the employer, the process included notifying managers when an employee’s visa was set to expire.
On 6 August 2024, the employer contacted the worker to remind him that his visa was expiring on 14 August 2024 and requested an updated copy. The worker replied the same day, stating, “Noted with thanks. I should get it this week and will forward it to you as soon as I receive it.” However, the worker did not submit an updated visa before the expiry date.
On 14 August 2024, the worker’s visa expired. Despite this, he worked on 15 and 16 August 2024 without a valid visa. The employer maintained that this was a critical issue, as Australian law prohibits employing someone who does not have work rights.
The worker initially stated that he did not know on 15 August that his visa had expired. However, when questioned about his knowledge of the visa renewal process—which he had gone through multiple times before—he acknowledged he was aware his work rights had ended. In response to the employer’s inquiry on 19 August, the worker provided a copy of his visa application rather than a renewed visa.
On 20 August 2024, the employer issued a show cause letter, informing the worker that a preliminary decision had been made to terminate his employment and asking him to provide reasons why the termination should not proceed. The letter stated:
“[The employer] is aware that your bridging visa expired on 14 August 2024 and as such, you currently are unable to lawfully work in Australia. In light of this, I write to inform you that [the employer] has made a preliminary decision to terminate your employment and to ask you to show cause why [the employer] ought not to terminate your employment.”
In his response, the worker stated that his visa renewal was being handled by a government department and that he had been advised the processing was ongoing. He requested that the employer delay its decision or transfer him to a different role within the company’s international branches. He also mentioned that he had escalated the issue to the Ombudsman and the Department of Home Affairs.
On 29 August 2024, the employer held a meeting with the worker to discuss his response. During the meeting, the worker stated that he had contacted the immigration department multiple times but had not been given a clear timeframe for his visa approval. He also reiterated that he had lodged complaints with the Ombudsman and were waiting for an update.
After considering the response, the employer proceeded with the termination, sending a letter on 30 August 2024, stating:
“[The employer] has considered your response, your comments in our meeting yesterday, and all relevant information and has made the decision to terminate your employment.”
The letter also confirmed that no payment in lieu of notice would be made because the employment contract stated that immediate termination was possible if work rights were not maintained.
Following the dismissal, the worker lodged an unfair dismissal claim with the FWC, arguing that the employer’s actions were harsh, unjust, and unreasonable. He stated that he had taken all necessary steps to renew his visa and that the employer could have waited a few more days, as his new visa was approved shortly after his termination.
The employer argued that the dismissal was lawful and necessary, as employing someone without work rights would have been illegal. He also stated that the worker had not informed him in advance that his visa was still being processed and had worked unlawfully for two days.
The Commission found that the employer had a valid reason for dismissal because the worker did not have a legal right to work after 14 August 2024. It also found that the employer had followed due process by issuing a show cause letter and giving the worker an opportunity to respond.
In its decision, the Commission stated:
“[The worker] was aware that his continued employment was, expressly under the contract, conditional upon having a visa. [The employer] did not act with undue haste in terminating [the worker].”
The employer in this case had previously terminated other employees under similar circumstances, demonstrating that it had a standard policy in place.
The Commission noted that while the worker had taken steps to address his visa situation, he was ultimately without legal work rights for 16 days before his termination.
The ruling emphasised that continued employment was conditional on having a valid visa, and the employer could not lawfully employ someone who did not meet this requirement.
The Commission also considered whether the employer had acted with undue haste, concluding that the employer had engaged with the worker on multiple occasions and had provided an opportunity for him to respond before finalising the decision.
