For an individual to be eligible to work in Australia, they must be an Australian citizen, Australian permanent resident or a non-citizen with a valid working visa. Under the Migration Act 1958 (Cth), employers face serious penalties if they employ a non-citizen who doesn't have the right to work in Australia.

In Muza v Costco Wholesale Australia Pty Ltd (2025), an employee lodged an unfair dismissal claim after his employment was terminated because he did not have a legal right to work in Australia.

The employer employs a number of workers on employment visas and, to ensure compliance, regularly monitors the status of its employees’ visas to identify any that are soon to expire. When the employer notified the employee that their visa was due to expire in a week’s time, the employee responded that he expected to receive a new visa “this week”. However, at the Fair Work Commission (FWC) hearing, it was found he only applied for the new visa after being notified by the employer that his current visa was expiring.

The employee’s visa expired before he received a new one, and he knowingly worked for 2 days without a valid visa. When the employer requested a copy of the new visa, the employee again stated that he did not have it yet and was unsure why it did not automatically renew.

After the employee failed on multiple occasions to provide a new visa and demonstrate that he had the right to work in Australia, the employer issued the employee with a show cause notice, informing him that it had made a preliminary decision to terminate his employment as he did not have the right to work in Australia.

Five days later, the employee notified the employer that his visa had been renewed; however, the employer refused to reverse its decision.

The FWC observed it was the employee’s actions that caused the delay in his visa renewal, as he only applied for the renewal after being informed by his employer that his current visa was expiring. The FWC also noted that if the employer had continued to employ the employee beyond the expiry of his visa, it is likely that it would have been in breach of the Migration Act 1958 (Cth), which could have exposed the employer to sanctions.

The decision provides support for employers to summarily dismiss employees whose visas have expired and, therefore, do not have the legal right to work in Australia. These employees have no capacity to work, and the Migration Act 1958 (Cth) would be contravened by keeping the employment contract on foot even if the employee was not rostered to work. In any event, if the employer had not terminated the employment, the absence of working rights would arguably bring the employment contract to an end automatically by virtue of frustration.