Small Business Fair Dismissal Code

In the second of our 2-part series on termination of employment, we check out a resource available to employers with fewer than 15 employees: the Small Business Fair Dismissal Code.

One of the most significant risks to an employer when terminating the employment of a worker is the individual making an application for unfair dismissal through the Fair Work Commission (FWC). Unfair dismissal is when the FWC determines an employee has been dismissed from their job in a harsh, unjust or unreasonable manner.

Small businesses (those with fewer than 15 employees) have different rules for dismissal than their larger counterparts. The Small Business Fair Dismissal Code (“the Code”) provides protection against unfair dismissal claims, where an employer follows the Code. The Fair Work Commission will deem a dismissal to be fair if the employer follows the Code and can provide evidence of this.

The Small Business Fair Dismissal Code is accompanied by the Small Business Fair Dismissal Code Checklist. The Checklist is a tool to help small business employers comply with the Small Business Fair Dismissal Code. Completing the Checklist does not mean that the Code has been complied with, nor is it a requirement of the Code that the Checklist be completed. However, completing the Checklist will help small business employers assess and record their reasons for dismissing an employee.

The Small Business Fair Dismissal Code Checklist comprises ten questions on the circumstances of the dismissal, including:

• How many employees are employed in the business?
• 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?
• 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?

It is in the interests of the employer to complete the Checklist checklist at the time of dismissal and to retain the document as a reference source in case of a future unfair dismissal claim.

Managing employee underperformance can be challenging, particularly when it gets to the stage where dismissal is considered. Few business owners and managers enjoy what they perceive will be conflict and oftentimes, elect to ignore poor performance or employee misconduct in the hope it will simply go away. The truth? It rarely does. But there are simple ways to address employee underperformance in a fair, transparent and emotion-free manner so you have fewer times when you need to go down the dismissal path. Like to know more? Give Bare Bones Consulting a call.