Small Business Fair Dismissal Code

What does the Small Business Fair Dismissal Code mean for you?

The Small Business Fair Dismissal Code (the Code) provides a framework for small businesses that affords employees procedural fairness whilst offering a degree of protection to the employer from unfair dismissal claims.

Do you qualify?

Under the Code, a small business qualifies if they employee less than 15 staff, including casual staff employed on a regular and systematic basis as well as employees of any associated entities.

How does the Code operate?

It is important to note that small business employees cannot make a claim for unfair dismissal within the first 12 months of their employment.

Summary Dismissal

The Code states that it is fair for a small business employer to dismiss an employee without notice if the employer has reasonable grounds to conclude that the employee’s behaviour is severe enough to justify immediate termination.

The behaviour must constitute wilful misconduct that could cause serious and imminent risk to the reputation or profits of the business, the health and safety of another person or deliberate behaviour that is inconsistent with the continuation of employment.

Other Dismissal

In circumstances that a small business employee partakes in conduct that is unacceptable but not severe enough to justify immediate dismissal, it is the employer’s responsibility to manage their conduct or underperformance in a fair, reasonable and defensible manner.

Initially, the employer should provide a verbal or written warning to the employee stating that their conduct is placing them at-risk of dismissal should they not improve. Allow the employee to respond and discuss a plan with them to improve.

After issuing the first warning and investing (if necessary) additional support and training, permit the employee a reasonable time to improve their performance.

Business Downturn and Redundancy

The Coronavirus crisis is one of many instances which are beyond an employer’s control. Employee dismissals may reach a record peak due to a downturn in business or position elimination.

Permitting the redundancy is genuine pursuant to section 389 of the Fair Work Act 2009 (Cth), the employer is unable to transfer them to a different role, consultation requirements are met and the correct period of notice is provided, the dismissal will not be deemed as unfair.

Dismissal Procedure

On the occasion that a reasonable amount of time has surpassed and the employee’s conduct or performance has not yet improved, you may have reasonable grounds to provide notice of their dismissal.

When providing notice, the employee is permitted for a support person to be present so long as it is not a legal representative. The employer must ensure that consultation requirements are met, the correct documentation is executed and that employees are paid all unpaid wages and entitlements in full.

Next Steps

If you are faced with questions or concerns regarding the application of the Small Business Fair Dismissal Code to your business and staff, contact the employment team at Antunes Lawyers on 02 9964 0499 for compliance review to ensure that you are meeting your obligations under the Code.

The articles on this website comprise legal general information and not legal advice. The general information presented here must not be relied upon without legal advice being sought. In the event that you wish to obtain legal advice on the contents of this general information you may do so by contacting our office or your existing solicitor.