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Information for Small Business Employers: Unfair Dismissal


Are you a small business owner or thinking about buying a business or starting your own? Are you scared by the prospect of employing people and negotiating their dismissal if that is unfortunately necessary?

The Australian Government Fair Work Ombudsman ‘promotes harmonious, productive and cooperative workplaces’. It helps employees, employers, contractors and the community to understand and comply with Australia’s workplace laws. It is a good thing for Australia to have this however, it should not kill entrepreneurial spirit or discourage people from taking the plunge into the small business sphere.

When setting up these workplace laws it was taken into account that these laws could cripple some small business’s. The Small Business Fair Dismissal Code came into operation on 1 July 2009 to try to assist small business’s in overcoming obstacles so that they may remain viable and continue employing other Australians hence making a meaningful contribution to society both socially and financially.

The Small Business Fair Dismissal Code applies to business’s with 15 or fewer employees and includes the following:

  • Employees of a small business cannot make a claim for unfair dismissal in the first 12 months following their employment.

  • If an employee is dismissed after this period and the employer has followed the Code then the dismissal will be deemed to be fair.

  • Employees may be dismissed because of a down turn in business however this must be a genuine redundancy (i.e. the position can not be re-filled).

  • An employee may be dismissed on the spot for serious misconduct (e.g. fraud, theft, violence etc)

  • Other cases: the Small Business Fair Dismissal Code must be followed. It is a good idea to have a look at this code before you need to use it to ensure you are keeping the correct records and that a dismissal is in fact fair. A checklist for following the code can be found here https://www.fairwork.gov.au/ArticleDocuments/715/Small-Business-Fair-Dismissal-Code-2011.rtf.aspx


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