Small Business Fair Dismissal Code. What Is It, And Does It Apply To Me?

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When the Fair Work Act 2009 (cwth) come into operation on 01 July 2009, it brought with it s388(1) the Small Business Fair Dismissal Code.

The Code gives small businesses some extra ‘protections’ from unfair dismissal applications when terminating an employee.

Though what is it exactly, and does it apply to your business?

Based On Number Of Employees

If your business is lucky enough to have less than 15 employees, per headcount, then you are classified as a small business, and the Small Business Fair Dismissal Code applies to you.

This means that any new employee needs to serve a minimum qualifying period of being employed for 12 months before they can access the unfair dismissal provisions of the Fair Work Act.

Unfortunately, this also means that if your business has 15 or more employees, then you aren’t classed as a small business. For those businesses, it means that employees only need to serve a qualifying period of six months before they can access the unfair dismissal provisions of the Fair Work Act.

Following The Code

As small businesses don’t have their own HR Departments, nor are they likely to access specialist advice, the Small Business Fair Dismissal Code was created to give small businesses a checklist that they can follow to ensure that the termination of an employee is legal and fair.

The theory is, that if a business follows The Code, they will be protected from a successful unfair dismissal application.

To do this, the business owner/manager answers the questions on the checklist, providing additional information where required.

The checklist is then added to the personnel file of the employee to be used/referred to if an unfair dismissal application is lodged.

The Small Business Fair Dismissal Code

The questions asked are reproduced below.

  1. How many employees are employed in the business? (Include the dismissed employee and any other employee dismissed at the same time).
    Under 15 employees
    15 employees or more
    [If under 15 employees, the Fair Dismissal Code applies.]
  2. Has the employee been employed in this business as a full time, part-time or regular casual employee for 12 months or more?
    Yes / No
    [If No, the employee cannot make an unfair dismissal claim.]

  3. Did you dismiss the employee because you didn’t require the person’s job to be done by anyone because of changes in the operational requirements of the business?
    Yes / No
    If Yes
    a. Did you comply with any requirements to consult about the redundancy in the modern award, enterprise agreement or other industrial instrument that applied to the employment? Y/N
    b. Did you consider if the employee could have been redeployed in your business or the business of an associated entity? Y / N

  4. Do any of the following statements apply?
    I dismissed the employee because I believed on reasonable grounds that:
    a. The employee was stealing money or goods from the business. Y/N
    b. The employee defrauded the business. Y/N
    c. The employee threatened me or other employees, or clients, with violence, or actually carried out violence in the workplace. Y/N
    d. The employee committed a serious breach of occupational health and safety procedures. Y/N

  5. Did you dismiss the employee for some other form of serious misconduct?
    If Yes, what was the reason?

    If you answered Yes to any question in parts 3, 4 or 5, you are not required to answer the following questions.

  6. In any discussion with the employee where dismissal was possible, did the employee request to have a support person present, who was not a lawyer acting in a professional capacity?
    Yes / No

  7. If Yes, did you agree to that request?

  8. Did you dismiss the employee because of the employee’s unsatisfactory conduct, performance or capacity to do the job?
    Yes / No
    If Yes
    a. Did you clearly warn the employee (either verbally or in writing) that the employee was not doing the job properly and would have to improve his or her conduct or performance, or otherwise be dismissed? Y/N
    b. Did you provide the employee with a reasonable amount of time to improve his or her performance or conduct? If yes, how much time was given? Y/N
    c. Did you offer to provide the employee with any training or opportunity to develop his or her skills? Y/N
    d. Did the employee subsequently improve his or her performance or conduct? Y/N
    e. Before you dismissed the employee, did you tell the employee the reason for the dismissal and give him or her an opportunity to respond? Y/N
    f. Did you keep any records of warning(s) made to the employee or of discussions on how his or her conduct or performance could be improved? Y/N
    Please attach any supporting documentation.

  9. Did you dismiss the employee for some other reason?
    Yes / No
    If Yes, what was the reason?

  10. Did the employee voluntarily resign or abandon his or her employment?
    Yes / No
    If Yes, please provide details

Always Be Cautious

Even if a small business follows the checklist when terminating an employee, they may still face an unfair dismissal application from a former employee.

This is why it pays to always seek advice/assistance when terminating an employee.

IR Simplified has a number of options available to the small business owner/manager to assist with termination, ranging from training courses to guides to consultation/outsourcing.

Don’t hesitate to contact us to see how we can help you with your industrial relations challenges.

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