Small Business Fair Dismissal Code – How To Dismiss An Employee


Are you a small business seeking to dismiss an employee? Before you do, you may want to examine the Small Business Fair Dismissal Code. This provides guidance for small business employers to prevent claims filed against them for unfair dismissals.

Make sure you know your rights as an employer. It may be important to seek advice from an employment lawyer. Our network of lawyers includes experienced employment lawyers that operate on a fixed-fee basis.

What is unfair dismissal?

Unfair dismissal occurs when an employee is dismissed from employment in a harsh, unjust or unreasonable manner. The Fair Work Commission decides on whether a dismissal has been unfair.

Some Reasons for Dismissing An Employee

Dismissal of an employee is justified in the event of serious misconduct such as:

  • Theft;
  • Fraud;
  • Violence; or
  • Breaches of Occupational Health & Safety standards.

It is important that an employer have reasonable grounds or evidence of these situations in order for the dismissal to be given effect.

Small Business Fair Dismissal Code – How to Dismiss an Employee

1. Situations Where Employees Cannot Make A Claim

“New” Employees

Employees who are dismissed within the first 12 months of their work are prevented from bringing an action against an employer for unfair dismissal.

Business Downturn

Dismissal of employees during a proven time of difficulty or hardship for your business is justified.

Genuine Redundancy

An employee can be dismissed if it is proven that their position is no longer required. An employer cannot replace the fired employee with a new employee. For more information check out our guide on genuine redundancy.

2. How Dismissal Can Be Effected

Summary dismissal

This means dismissal without notice or warning. Summary dismissal can be justified when employees engage in serious misconduct. Instances of serious misconduct, such as theft, fraud or violence do not necessarily have to be reported to the police.

Verbal/Written Warning

If employees have not engaged in any misconduct, they can be issued with a warning that they risk termination of their employment contract unless they show improvement in their performance.

Third Party Assistance

Where applicable, a third party can assist an employee in the dismissal process. The third party cannot be a lawyer acting in their professional capacity.

3. What Happens If You Do Not Comply?

In the event that the Fair Work Commission finds that a dismissal has been unfair, an order may be made to:

  • Strike out the unfair dismissal application;
  • Require the employer to pay compensation to the wronged employee;
  • Require reinstatement for the wronged employee; or
  • Require both reinstatement and compensation to be paid.

If you are still unsure of how to comply with fair dismissal guidelines from this Code, LawPath can connect you with an employment lawyer.

Are you considering dismissing an employee? Contact a LawPath consultant on 1800LAWPATH to learn more about customising employment contracts, obtaining a fixed-price quote from one our network of 600+ expert lawyers or any other legal needs.

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