What is the Small Business Fair Dismissal Code?

The Small Business Fair Dismissal Code (“the SBFDC”) came into effect on 1 July 2009. Two of the factors that the Fair Work Commission (“FWC”) will take into account when determining whether an unfair dismissal has occurred are:
- Whether the employee was employed by a small business; and
- If so, whether the small business has complied with the SBFDC?
Definition of Small Business
The SBFDC applies to all small business employees with fewer than 15 employees (including casual employees).
Employees cannot lodge an unfair dismissal application within the first 12 months of their employment. After this period, if an employee is dismissed and the employer has complied with the requirements under the SBFDC, then the dismissal will be considered ‘fair.’
Situations such as a business experiencing a ‘downturn’ or an employee’s position no longer being required will not constitute a claim for unfair dismissal. If redundancy is cited by the employer, the redundancy needs to be genuine under Fair Work legislation.
Types of Dismissal
Subject to the SBFDC, there are 2 types of dismissals:
- A summary dismissal; and
- ‘Other’ dismissals.
Summary Dismissal
If an employee’s conduct is deemed serious enough to justify dismissal, an employer can dismiss an employee without notice or warning. However, an employer will need to have reasonable grounds for doing so. Examples of this type of wrongful and serious conduct are theft, fraud, violence and serious breaches of occupational health and safety standards.
In the cases of theft, fraud or violence, if the employer has reasonable grounds for doing so, he or she must report the incident to the police. This type of dismissal will be considered fair.
Other cases of Dismissal
In all other cases, the employer must provide reasons for the employee’s dismissal. It must be a valid reason based on an employee’s conduct or capacity to do the job. The employee must be warned verbally or in writing of the pending dismissal.
The employee must be provided with the opportunity to rectify the problem, which may include the employer providing additional training, bearing in mind that the employee knows the employer’s job expectations.
Evidence
An employer can provide the following evidence to show that he or she has complied with the SBFDC:
- A warning (not including in the case of a summary dismissal);
- A completed checklist (provided by the SBFDC which helps employers assess and record their reasons for dismissing an employee);
- Copies of written warnings;
- Termination statements; and
- Signed witness statements.
Conclusion
If you require any assistance in relation to the SBFDC, either as an employee or an employer, contact one of our employment lawyers today on 1300 544 755.
Corporate Governance 101: Responsibilities for New Directors
Friday 13 May | 11:00 - 11:45am
Online
How Franchisors Can Avoid Misleading and Deceptive Conduct
Wednesday 18 May | 11:00 - 11:45am
Online
New Kid on the Blockchain: Understanding the Proposed Laws for Crypto, NFT and Blockchain Projects
Wednesday 25 May | 10:00 - 10:45am
Online
How to Expand Your Business Into a Franchise
Thursday 26 May | 11:00 - 11:45am
Online
Day in Court: What Happens When Your Business Goes to Court
Thursday 2 June | 11:00 - 11:45am
Online
How to Manage a Construction Dispute
Thursday 9 June | 11:00 - 11:45am
Online
Startup Financing: Venture Debt 101
Thursday 23 June | 11:00 - 11:45am
Online
Was this article helpful?
We appreciate your feedback – your submission has been successfully received.
About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.
By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.
If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.