A Word of Warning to Small Business Employers… Be Wary When Dismissing Employees, Having Less Than 15 Employees Does Not Prevent Repurcussions.
Be Wary When Dismissing Employees, Having Less Than 15 Employees Does Not Prevent Repurcussions.
If you are an employer covered under the Fair Work Act with a total workforce of less than 15 don’t be fooled into thinking that the unfair dismissal laws don’t apply and that you can dismiss an employee without fear of repercussions.
Small Business Employers are obliged to comply with the Small Business Fair Dismissal Code which, to summarise, requires:
- The provision of a valid reason why the employee risks losing their job;
- At least one warning, preferably in writing, that failure to improve may result in the employee’s employment being terminated;
- An opportunity for the employee to respond; and,
- A reasonable chance to improve having regard to that response.
Providing the employee with a reasonable chance to address the issue and to rectify it may require the employer to clearly communicate its expectations and the provision of additional training.
Failure to comply can result in an employer being involved in dealing with an application before Fair Work Australia brought by its former employee. These are time consuming and attract direct and indirect (e.g. lost time) costs which, as a general rule, cannot be recovered from an employee even if the application is successfully opposed.
Even if the dismissal is not harsh, unjust or unreasonable and the Code has been faithfully complied with, employers also need to be aware of the relevant periods of notice that apply.
If there is an agreement or award that applies then the notice period will be found in that agreement or award. Otherwise reference to the National Employment Standards is well-advised. Many awards incorporate these standards. The National Employment Standards provide, among other things, that employees employed for:
- less than 1 year are entitled to 1 week’s notice;
- more than 1 year but less than 3 are entitled to 2 weeks’ notice;
- more than 3 weeks but less than 5 are entitled to 3 weeks’ notice; and
- more than 5 years are entitled to 4 weeks’ notice.
In addition, an employee over the age of 45 who has worked for an employer for not less than 2 years continuously is entitled to an additional week’s notice.
Dismissed employees are also entitled to all accrued statutory entitlements such as unused annual leave and long service leave (if any).