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You’re Fired! Small business and the FW Dismissal Code

Small businesses already have it tough enough in today’s economic climate without the myriad of industrial and employment statutes that govern employees, corporations, business and trade practices, intellectual property and taxation that add to the complexity of keeping the business afloat. Then you have to deal with human relation issues that arise at work, retention and sometimes that unfortunately includes hiring a person that was either clearly not suited for the role, or who’s attitude and/or performance had eroded over a period of time. This leads us to a common scenario:
So you’re sitting across the table from a “bad” employee, and you think that you have enough “material/evidence” on them to entertain the idea of emulating the ending of an episode from ‘The Apprentice’. In your mind, you’ve mentally gone through the Fair Work checklist:

  • Do you have less than 15 employees? Yes
  • Has the employee been there for longer than 1 year? Yes
  • Does it relate to serious misconduct, misconduct or performance? Yes

You proceed to utter the words “You’re fired!” and you’ve never felt better. Within 21 days, you receive notice of an unfair dismissal application and you begin to wonder, do I have any exposure?

This is not an uncommon scenario. If you are facing this situation (or believe that you may soon to be placed in a similar situation), it may be prudent to obtain a professional opinion as to whether the conduct, behaviour, attitude, or performance in question actually warrants immediate dismissal (for cases reserved for only serious misconduct), or whether another disciplinary process ought to be followed. Having an experienced workplace relations lawyer assess the situation could save you in defending a frivolous law suit in a jurisdiction where costs are not usually recoverable even if you successfully defend the claim.

As a quick guide, the Small Business Fair Dismissal Code (‘Code‘) defines ‘serious misconduct‘ as “theft, fraud, violence and serious breaches of occupational health and safety procedures.” However, what if you had an employment contract in place that widen the definition of serious misconduct. Would you be able to rely on the contractual definition as previously agreed to between the parties, or are you bound by the definition in the Code? Moreover, what if the conduct sits on the line between serious and not serious misconduct? Should you err on the side of caution or would you risk breaching health and safety laws by leaving the person employed? These are all valid considerations when determining the course of action required and each case should be consulted on a case-by-case basis.

If the conduct cannot be deemed serious enough to dismiss the employee on the spot, then what procedures, disciplinary action processes, or policies do you have in place to ensure that procedural fairness and natural justice has been discharged? All employers, even Small Businesses, should be armed and equipped with processes and paper work in place to ensure that the right course of action is followed to minimise the risk of exposure should you face a law suit.

The above article is not legal advice and is not specific to your needs. It is general information and we advise that you seek legal assistance from a lawyer to choose what is right for your personal circumstance. If you would like to talk to an experienced employment lawyer about any of the contents in this article, please feel free to contact us at for call us on 03 5367 3100 to make an appointment.


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