New Fair Dismissal System for Small Business announced.

18 September 2008 - Workforce Guardian

By Adrienne Unkovich, MD of Workforce Guardian – Australia’s number one online employment relations service.

Workplace Minister – Julia Gillard has announced the new process for unfair dismissals which includes special arrangements for small business which require a warning and time for the employee to change their behaviour. The changes are expected to come into effect in July 2009.

 

Under the proposed laws, an employee of a small business (defined as having less than 15 employees) will be able to claim for unfair dismissal after they have been employed for at least 12 months.

 

To dismiss someone fairly after 12 months the employer will have to comply with the new Fair Dismissal Code for Small Business and whilst not mandatory, a checklist has been developed to help small business employers comply with the code.

 

For businesses with more than 15 employees a claim can be made after 6 months of employment.

 

See the Fair Dismissal Checklist

 

Warnings and “chances”

 

 

• The employer must give the employee a valid reason, based on the employee’s conduct or capacity to do the job, why the employee is at risk of being dismissed, except in the case of serious misconduct where no warning is required.  
• Only one warning is required.  While it is not mandatory for it to be in writing that is strongly recommended.
• The employer must give the employee a ‘reasonable chance’ to respond and rectify the problem, which may include additional training and ensuring the employee knows the employer’s expectations.

 

Fair Dismissal Process

 

• Unfair dismissal claims must be lodged with Fair Work Australia within 7 days.
• Fair Work Australia will be able to make initial inquiries and discuss issues directly with the Employer and the Employee and will not allow legal representation unless in exceptional circumstances.

 

A remedy of reinstatement or capped compensation

 

• Reinstatement will be the primary remedy unless it is not in the interests of either party
• Where reinstatement is not feasible compensation may be ordered to a maximum of six months pay.

 

Exemptions:

 

Employees who have been dismissed because of business downturn or because their position is no longer needed cannot bring a claim for unfair dismissal provided there are genuine operational reasons for the redundancy.

 

Summary dismissal

 

A dismissal without notice or warning, often called a ‘summary dismissal’, is also covered in the code. The employees conduct must be sufficiently serious to justify immediate dismissal e.g. sufficiently serious cases of theft, fraud, violence or breaches of occupational health and safety procedures.

 

What should you do?

 

Regardless of the size of your business it’s important that employers you start preparing for the changes now. Ensure you have:

 

• Employment contracts in place for ALL employees that comply with current Australian Employment Law.

 

• Workplace rules and policies describing the behaviour that is expected of your employees and the circumstances that may result in summary dismissal.

 

• A disciplinary procedure which has been clearly communicated to all your employees.

 

 

Want to know more?

 

More information and insight can be obtained from this website or see the Fair Dismissal Code Checklist below. Australia’s most comprehensive inexpensive online employment relations service that helps employers navigate confusing employment law in order to properly hire, manage and exit employees:

 

·         Fully compliant Employment Contracts and Independent Contractor Agreements – easy and quick to create using an interview style format,

·         Step-by-step employment processes and legally compliant document templates such as employee evaluation forms and employee termination forms,

·         Central and secure round the clock storage of sensitive employee information,

·         Expert employment relations advice when needed,

·         Verified by Clayton Utz and available via the web 24/7.

 

  

Small Business Fair Dismissal Code Checklist

It is in the interests of the employer to complete this checklist at the time of dismissal and to keep it in case of a future unfair dismissal claim. However, it is not a requirement of the Fair Dismissal Code that the checklist be completed.

 

1. How many employees are employed in the business? (Include full‑time, part‑time and regular long-term casual employees as well as the dismissed employee and any other employee dismissed at the same time).

 Under 15 employees

 15 employees or more [If under 15 employees, the Fair Dismissal Code applies.]

 

2. Has the employee been employed in this business as a full‑time, part-time or regular casual employee for 12 months or more?

 Yes

 

 No [If no, the employee cannot make an unfair dismissal claim.]

 

3. Did you dismiss the employee because of genuine redundancy as set out in the Code?

 Yes

 No If yes, explain the reason for the redundancy (for example, economic downturn, introduction of new technology therefore requiring less staff, or another such reason)

 

 

4. Do any of the following statements apply?

I dismissed the employee because I believed on reasonable grounds that:	YES	NO
a. The employee was stealing money or goods from the business.		
b. The employee defrauded the business.		
c. The employee threatened me or other employees, or clients, with violence, or actually carried out violence in the workplace.		
d. The employee committed a serious breach of occupational health and safety procedures.		

 

 

5. Did you dismiss the employee for some other form of serious misconduct?

 Yes

 No If Yes, what was the reason?

 

If you answered Yes to any question in parts 3, 4 or 5, you are not required to answer the following

questions.

 

6. Did you dismiss the employee because of the employee’s unsatisfactory conduct, performance or capacity to do the job?

 Yes

 No

 

If Yes,	YES	NO
a. Did you clearly warn the employee (either verbally or in writing) that the employee was not doing the job properly and would have to improve his or her conduct or performance, or otherwise be dismissed?		
b. Did you provide the employee with a reasonable amount of time to improve his or her performance or conduct? If yes, how much time was given?		
c. Did you offer to provide the employee with any training or opportunity to develop his or her skills?		
d. Did the employee subsequently improve his or her performance or conduct?		
e. Before you dismissed the employee, did you tell the employee the reason for the dismissal and give him or her an opportunity to respond?
f. Did you keep any records of warning(s) made to the employee or of discussions on how his or her conduct or performance could be improved? Please attach any supporting documentation.

 

7. Did you dismiss the employee for some other reason?

 Yes

 No

If Yes, what was the reason?

 

8. Did the employee voluntarily resign or abandon his or her employment?

 Yes

 No

If Yes, please provide details