Small Business Fair Dismissal Code
Under the new national workplace system, there are new unfair dismissal laws for small businesses and their employees. Small businesses are defined as those with fewer than 15 full-time equivalent employees.
Special arrangements
There are special unfair dismissal arrangements that apply to small businesses.
These arrangements simplify the dismissal process for small businesses.
They recognise that small businesses usually:
- Do not have big human resource departments to help them
- Cannot afford lost time
- Cannot find other positions for employees.
Small business employers will benefit from:
- A minimum employment period of 12 months instead of six months (employees cannot make an unfair dismissal claim in this 12 month period)
- A simple Fair Dismissal Code which has been developed to help employers ensure dismissals are not unfair
- A specialist service for small and medium sized businesses from the Fair Work Ombudsman.
The Fair Dismissal Code addresses summary dismissals, other dismissals and procedural matters. The code is as follows:
Summary dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.
Other dismissal
In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.
The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.
Procedural matters
In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal).
Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.
The Small Business Fair Dismissal Code also includes a helpful checklist that small business employers can follow to ensure the dismissal is not deemed unfair.
If you require some specific HR advice in relation to the Fair Work Act then please contact us.