Small Business Fair Dismissal Code

Small businesses have different rules for dismissal which are set out in the Small Business Fair Dismissal Code (the Code). A small business is any business with fewer than 15 employees calculated on a simple headcount of all employees who are employed on a regular and systematic basis. This includes any casuals employed on a regular and systematic basis.

The Small Business Fair Dismissal Code provides protection for small business employers against unfair dismissal claims, where an employer follows the Code.

In general, and after the employee has become eligible through 12 months continuous service,:

  • 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.
  • 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.
  • 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.

The Fair Work Commission will deem a dismissal to be fair if the employer follows the Code and can provide evidence of this.

Visit the Fair Work Commission for more information and a copy of the Code

Important note: There is a misconception amongst employers that casual employees can simply be terminated without any claim for unfair dismissal. This is a myth and as a very brief introduction to why, where a casual can demonstrate at least the following, there may be the basis for a claim for unfair dismissal:

  • meeting eligibility criteria under the Fair Work Act 2009 [take a safe dive into the Act for yourself here – Section 382 and the related Section 384(2)(a)]
  • has a reasonable expectation of ongoing employment
  • and their employment is on a ‘regular and systematic’ basis

As always, seek advice if you have any doubts or contact RAW HR for a free chat.

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