What is it? Does it apply to me? How do I comply?
What is the Small Business Fair Dismissal Code? Does it Apply to me?

The Small Business Fair Dismissal Code (the Code) contains the rules applicable to National System Employers who are deemed to be a “Small Business Employer” for the purposes of the Fair Work Act 2009 (Cth) (FW Act) in the dismissal of their employees.

Section 23 of the FW Act defines a “Small Business Employer” as any business with fewer than 15 people. Reference to individual employees, not the equivalent full time number. Included in this figure are casuals working on a “regular or systematic basis”, the person(s) who has been dismissed and any employee of an associated entity.

The number of employees is determined at the time the employee is informed of their termination or when the employee is given notice of their termination (whichever is earlier).

Section 388 of the FW Act requires a Small Business Employer to comply with the Code when terminating an employee. If the dismissed employee commences unfair dismissal proceedings which go to a hearing, a Small Business Employer will need to provide evidence that it followed the Code.

What is in the Small Business Fair Dismissal Code? How do to comply?

The dismissal of an employee will be considered to be consistent with the Code if:

  1. immediately before the time of the dismissal or at the time the employee was given notice of the dismissal (whichever happened first), the employer was a small business employer; and
  2. the employer complied with the Code in relation to the dismissal.

An employer may terminate an employee’s employer without notice or warning only if the employee has engaged in serious misconduct. Such action is permitted by the FW Act and the Code.

Where the employee’s actions do not meet the definition of serious misconduct, to comply with the Code, an employer must have warned the employee that they are at risk of dismissal and provide the employee with the reason(s) for this. Such reason(s) must concern:

  1. the employee’s behaviour or conduct; and/or
  2. the employee’s ability or capacity to perform their role/job.

It is important that the employee understands what the problem is and what is expected of them moving forward. In this regard, once this notice is given, an employee must be afforded a reasonable opportunity to address the concerns by fixing the problem with their behaviour or conduct and/or improving their capacity to perform their job.

The Fair Work Commission Website includes a helpful checklist/guide for employers to ensure they comply with the Code.

Why is compliance with the Code important?

It is imperative that Small Business Employers comply with the Code. In doing so, they are demonstrating to their employee’s that they have engaged in a fair and reasonable process which can reduce the likely hood of a claim being made.

Where an unfair dismissal case is filed, compliance with the Code must be demonstrated and, where it can be, the employer is protecting themselves as much as possible from any adverse outcome at an unfair dismissal hearing.

If you require assistance in fairly dismissing your employees, an unfair dismissal claim has been made against you or believe you have been unfairly dismissed, Adams & Partners Employment Law Team can help you. Contact us on (02) 4721 6200.

Written by Amelia Hatton.

Scroll to Top