No visa, no job – visa expiry is a valid reason for dismissal, but fair process still essential

A recent Fair Work Commission (Commission) case has shown that, even if an employee's work visa has expired and they have no right to work, the employer still needs to ensure their dismissal is fair.

In Misheck Muza v Costco Wholesale Australia Pty Ltd, the Commission held that the dismissal was not unfair because:

• it was a valid reason for dismissal that the employee had no legal right to work;
• the employer followed a fair process; and
• the decision to dismiss was not harsh or unreasonable, as the employee's own delay in renewing his visa caused the fundamental problem.

Background

Mr Muza had been employed at Costco for around three years. His employment contract required (in accordance with immigration law) that he maintain a valid visa allowing him to work in Australia. His visa expired on 14 August 2024. Despite this, Mr Muza continued to work two further shifts and also took paid personal leave for two others. When Costco requested evidence of his visa status, Mr Muza disclosed that his visa renewal application was pending.

Costco issued a show cause letter, invited him to a meeting, and ultimately dismissed Mr Muza by email on 30 August 2024, citing lack of legal capacity to work. Mr Muza lodged an unfair dismissal application with the Commission.

The employee’s case

Mr Muza argued that the dismissal was harsh, unjust or unreasonable under section 387 of the Fair Work Act 2009 (Cth) because:

• his visa was under active review by the Department of Home Affairs, and shortly after his dismissal a new visa was granted;
• Costco could have exercised patience, as the matter was only days from being resolved;
• dismissal by email was unnecessarily harsh, as Commission guidance encourages termination to be conveyed face-to-face;
• he was not given adequate opportunity to have a support person present; and
• the consequences for his financial and personal situation were severe, particularly given his otherwise satisfactory employment record.

Mr Muza also contended that any delay in securing the visa was outside his control and that Costco's quick action reflected a desire to remove him because he had raised concerns about workplace practices.

The employer’s case

Costco submitted that termination was justified on both capacity and conduct grounds:

• at the time of dismissal, Mr Muza had no legal capacity to work in Australia;
• he was contractually and statutorily obliged to notify Costco of his visa status, yet failed to disclose the expiry until questioned;
• he knowingly worked shifts while ineligible, which was a breach of his employment contract, the relevant enterprise agreement, and the Migration Act; and
• his was serious misconduct, entitling Costco to terminate without notice.

Costco also noted that it had given Mr Muza both written and oral opportunities to respond, and that the dismissal letter clearly set out the reasons for termination.

The Commission’s decision

The Commission dismissed the unfair dismissal application, finding:

• valid reason: the absence of a visa meant that Mr Muza had a clear and fundamental incapacity to perform the role. The Commission emphasised that employing someone without work rights can itself expose an employer to liability under the Migration Act;
• notification and response: Mr Muza was advised of the concerns, received a show cause letter, responded in writing, and attended a meeting before termination;
• support person: there was no refusal to allow a support person; Mr Muza had been expressly told he could bring one; and
• harshness: while the loss of employment was significant, the primary cause was the employee’s own inaction in applying for a visa renewal late, leaving only a short processing window.

The Commission concluded that the dismissal was not unfair. The fact that a new visa was granted the following week did not alter the position at the time of termination, when Mr Muza had no legal right to work.

Key lessons for employers

This decision is a reminder that:

• work rights are a fundamental requirement: an employee without a valid visa lacks the legal capacity to perform work. Termination on this basis will generally constitute a valid reason;
• fair process still matters: even if dismissal seems inevitable, employers should issue a clear show cause letter, provide an opportunity to respond, and allow for support or representation. A flawed process can still expose an employer to an unfair dismissal finding;
• acting promptly is appropriate: employers cannot be expected to assume when or if a visa will be reinstated. However, decisions should only be made after giving the employee a genuine chance to explain their circumstances; and
• method of communication should be considered: while dismissal by email was upheld in this case, face-to-face communication is generally preferred. Employers should ensure they are sensitive when they convey employment decisions.

Contact our Employment, Workplace Relations and Safety team if you need assistance with migration and compliance issues.

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