Small Business Fair Dismissal Code

Effective from 1 July 2009, new unfair dismissal laws will allow companies with less than 15 full-time equivalent (FTE) employees to terminate an employee’s employment after giving them one warning and time to improve their behaviour. Furthermore, a small business employer will be able to dismiss an employee with less than 12 months service at any time without consequence. (Organisations with more than 15 FTE employees will need to comply with the full provisions of the Unfair Dismissal provisions.)

To dismiss an employee fairly after 12 months the employer will have to comply with the new Fair Dismissal Code for Small Business and a non-mandatory checklist has been developed to help small business employers comply with the code.

In order to comply with the code, small business employer must:

	give the employee one warning, recommended to be in writing outlining the reason that validly relates to the employee’s conduct or capacity to do the job and
	provide a reasonable opportunity for the employee to improve their performance which may include additional training and ensuring the employee knows the employer’s expectations.

Employers are still able to terminate an employee’s employment without notice for serious misconduct for reasons including theft, fraud, violence and serious breaches of occupational health and safety procedures.

All unfair dismissal disputes will be handled by the new arbitration body Fair Work Australia, Compensation will be capped at six months’ pay, with the full amount only available for the most serious cases.

Published : 18 June 2009