Unfair Dismissal: The Negative Effects and How to Combat Them

It is no secret that being unfairly dismissed from a job can have a profound and lasting impact on a person’s life. In addition to the obvious financial implications, there can also be a significant emotional toll.

Previous employers can have a big impact on an employee’s ability to secure home and car loans in the future. While HR consulting can help employers understand how their policies and procedures may be affecting employees’ future, the lasting effects are hardly mitigated. 

The following are ways in which an unfair dismissal can negatively affect a person’s life:

Anxiety and insecurity often looms

Losing a job can be a very stressful experience, especially if you feel that you have been unfairly dismissed. The process of seeking new employment can be anxiety-inducing, and the sense of insecurity that comes with being out of work can take a toll on your mental health.

In addition to the financial stress of being unemployed, the loss of structure and routine can be disruptive to your life. Not only are you suddenly out of work, but you may also feel that your skills and experience are not valued. This can lead to feelings of hopelessness. It may also lead to finding difficulty trusting others or taking risks, which can further damage your career prospects.

Isolation and loneliness follow

Termination of employment can have a significant impact on an individual’s well-being. Not only does it impact your finances, but it can also lead to feelings of inadequacy and isolation. For many people, their job is more than just a source of income; it’s a source of social interaction and self-esteem.

“When you lose your job, you not only lose your income, but you also lose your sense of purpose and connection to the outside world. This can be especially difficult if you’re dismissed from your job unfairly. An unjust dismissal can leave you feeling angry, humiliated, and alone. It can be hard to find the energy to look for another job when you’re feeling so low.” a human resource expert from Moonee Pond remarked.

According to a study conducted by the University of Manchester, individuals who have been dismissed from their job are more likely to experience symptoms of depression and anxiety and are also more likely to report feeling lonely and isolated. The study found that these effects were particularly pronounced in individuals who had been employed for a long time or who had strong attachments to their job.

It is important to seek support from family and friends and to speak to a human resource advisor about your options if you’re ever in trying times like this.

A blow to self-esteem and sense of self-worth

To be unfairly dismissed from a job can have several negative consequences, both practical and emotional. On a practical level, losing a job can lead to financial instability and difficulty paying bills. It can also make it difficult to find new employment, as potential employers may view the dismissal as a sign of poor character or work ethic.

However, the most damaging effects of unfair dismissal are often psychological. The loss of a job can cause feelings of shame, failure, and worthlessness. It can damage one’s self-esteem and sense of identity.

“For many people, a job is more than just a source of income; it is a fundamental part of who they are. When that is taken away, it can leave them feeling lost and adrift. While the practical effects of unfair dismissal are significant, it is the emotional impact that is often the most lasting.” an industry-leading psychologist in Sydney adds.

Even seeking financial help is affected

Being dismissed from your job can be a very stressful and difficult experience. Not only are you faced with the prospect of finding a new job, but you may also have to deal with the financial fallout of being without an income for a while. One area that can be particularly affected by such dismissal is your ability to secure home loans and other forms of mortgage financing.

When you are applying for a loan, the lender will often ask for your employment history. They want to see that you have a stable job and will be able to repay the loan. However, if you have been unfairly dismissed from your previous job, this can limit your options when it comes to securing a loan.

Many lenders will not consider applications from people who have been dismissed, as they view them as high-risk. This can make it difficult to get the money you need, whether you’re trying to buy a house or just cover some unexpected expenses. It’s important to understand how this can impact your ability to get a loan before you start applying for credit. Otherwise, you may find yourself facing rejection after rejection.

While this can be frustrating, it’s important to remember that there are still options available to you. Many lenders are willing to work with borrowers who have experienced an unfair dismissal, and many government-backed home loan programs can help you get back on track. Additionally, some financial advisors can steer you on the right track and get back on your feet in no time. 

But you can fight back

Fortunately, there are ways to combat the negative effects of unfair dismissal. Should workplace meditation fail to help people to find stillness and clarity amidst the chaos of workplace drama, many options are still available.

There are consulting companies specializing in discrimination that can provide support and guidance for those seeking legal recourse. Another option is alternative dispute resolution, which involves mediation or arbitration between you and your former employer. This can be a good option if you want to avoid going to court, and it can often result in a faster and more amicable resolution.

Another option is to file a claim with the Fair Work Commission, which is the Australian government’s workplace relations tribunal. This process can be more complex and time-consuming, but it offers the potential for greater compensation – in some cases, up to 26 weeks’ worth of salary. Whatever route you decide to take, remember that you have the right to contest your dismissal and fight for fair treatment.


An unfair dismissal can have a profound emotional impact on individuals. This is due to the loss of not just a job, but also a sense of identity and purpose. It can also limit your options when it comes to securing home loans and other forms of mortgage financing. However, there are many ways to combat its negative effects. By taking action, individuals who have been unfairly dismissed can start to rebuild their sense of self-worth and confidence.

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