The Small Business Fair Dismissal Code [Fair Work Act 2009 (Cth) s 388] is available to small business employers (those with fewer than 15 employees) who are considering dismissing an employee. Until 31 December 2010, the threshold used to define a small business for the purpose of applying the unfair dismissal arrangements will be fewer than 15 full-time equivalent employees.

From 1 January 2011, the threshold will be based on a simple headcount of employees.

It is not a compulsory Code – the employer does not have to follow the Small Business Fair Dismissal Code, but if the dismissal was consistent with the Code, then the dismissal will be considered fair and the other factors relating to unfair dismissal do not need to be considered (see s 396). If the Small Business Fair Dismissal Code is not followed, the claim will be treated the same as any other unfair dismissal claim and may be found to be fair or unfair depending on the circumstances.

How does the Small Business Fair Dismissal Code work?

The Small Business Fair Dismissal Code allows for a dismissal without notice or warning in cases of serious misconduct such as theft, fraud or violence.

For underperformance, the Small Business Fair Dismissal Code requires that the employee be given a valid reason why they are at risk of being dismissed and a reasonable opportunity to rectify the problem.

Voluntary Checklist

A checklist to assist with complying with the Small Business Fair Dismissal Code has been developed for small business employers to complete at the time of dismissal and to keep in case an unfair dismissal claim is made. However, it is not a requirement for compliance with the Small Business Fair Dismissal Code that the checklist be completed.

The checklist covers off information such as if: